Property

Weekly property review – Red hot market a winter warmer

Property editor Linda Rowley, 30/06/2021

The recent auction of the 882ha Knockdon Park at Tenterfield attracted 13 registered bidders and resulted in a sale at $6.25 million.

THERE is nothing cold about this winter property selling season, with industry experts proclaiming that most property values are still red-hot.

In past years, it’s been common for property sales and listings to lighten-off around mid-year, for a variety of reasons.

In contrast, Bruce Birch from Ray White Rural said 2021 was one of the most active winter property markets he has seen.

“Some parts of regional New South Wales essentially hibernate through the winter months. This is normal in areas such as the New England where vendors avoid presenting properties that may be frost-affected,” he said.

While there is evidence that some vendors are electing to wait until the spring before commencing the marketing of their properties, Mr Birch said there had been a number of properties marketed through June, with great success.

A key example was the recent auction of the 882ha Knockdon Park at Tenterfield (pictured above) that attracted 13 registered bidders and resulted in a sale at $6.25 million.

Bruce Birch

Mr Birch said strong fundamentals continued to drive the market.

“It seems to be a combination of stable low interest rates, livestock prices and a continued strong season that are the primary drivers of the enthusiasm.”

“There is also the feeling from many investors that agriculture is a ‘safe harbour’ to moor their investment dollar, combined with the limited amount of highly productive properties on the market that continue to drive the market,” he said.

Mr Birch said he had never experienced buyer inquiry at the level currently being witnessed.

“Different buyers are sourcing properties with different attributes, however much of the QLD-based inquiry craves scale to engage. It would be fair to say that most sectors of the property market have experienced an increase in inquiry over the past 12 months.”

Despite the current market pressure, Mr Birch advises clients that the right time to market their property is ‘when they are ready’.

“Trying to control factors that nobody can control is a dangerous practice, and given the variability of past seasons, and the uncertainty of COVID restrictions we are suggesting that if people are thinking of selling they should consider now to be as good a time as any.”

Mr Birch said there was no evidence that the grazing property market will slow.

“Given the strength of the commodity prices, the property market looks secure in the foreseeable future,” he said.

“If commodity prices remain unchanged, one would consider that property will remain firm, with the opportunity for it to continue to grow provided no external factors interfere.”

Darryl Langton, Nutrien Harcourts Roma (QLD’s Maranoa)

Darryl Langton from Nutrien Harcourts said traditionally, July and August were quiet months in terms of property listings and marketing programs, however, the last three or four years had been much more active over that period.

In fact, it was a busy winter last year and Mr Langton continued to sell property until August – mainly due to the late seasonal start in Queensland, and COVID.

Darryl Langton

“Buyer demand in the rural property market has been solid for a couple of years, but it is now stronger than ever,” he said.

“Property prices are being driven by low market supply together with softer interest rates and strong commodity prices.”

Mr Langton said 2021 would have to be one of the most active winter markets he had seen.

“It started in February. During that time there have been nine rural property transactions in this area, including six or seven auctions, mostly from local producers.”

“The buyers tend to be established industry producers seeking economies of scale or more vertical integration,” he said.

Mr Langton said there was also some outside money coming into agriculture from investors chasing a return.

“Agricultural investors take a longer-term view – the seasons come and the seasons go, and buyer inquiry will be waiting regardless.”

Despite a busy autumn and early winter period, the rural property market now appeared to be slowing down in the Maranoa region, due to a lack of supply.

Mr Langton said while the market will stay strong, the volume of transactions is likely to decline.

“The busy selling period in southern and southwest Queensland appears to be coming to the end. The flush of listings are all but exhausted, with no auctions booked or full-scale marketing programs going forward.”

Mr Langton said the rapid value growth evident in recent years won’t last forever, however it was not showing any signs of slowing down.

“This year, the property market is in a very strong position. Agriculture is a tremendous place to invest,” he said.

Brad Hanson, Hourn & Bishop Qld

Moura-based selling agent Brad Hanson said without a doubt, 2021 was producing one of the most active winter property markets he has seen, driven by low interest rates and confidence in the rural sector.

“There has been high demand for backgrounding and fattening country, with increasing interest in breeder properties,” he said.

Brad Hanson

It was evident there were buyers to suit all properties.

“Most are from Central Queensland and to the north. The northern producers are looking for a fattening block, and the CQ producers are looking to expand their existing holdings,” he said.

Since April, Hourn & Bishop Qld has sold four properties that have achieved record prices. The latest is the 403ha Moura block Marobi, which achieved $6425/ha – paid by a nearby neighbour adding to their existing holdings.

Mr Hanson said potential vendors saw the prices being paid and were confident enough to bring their properties to the market.

“The price spike induced a number of sellers – including a number of people wishing to retire – to the market, and despite the strong prices being paid, there is still plenty of interest in Central Queensland,” he said.

“While some producers have been ruled-out of the market, others who have a belt of better country are actively chasing country for expansion.”

Mr Hanson said traditionally, Queensland producers waited until spring/summer to market properties after rain.

“Today, it doesn’t matter whether a property is well-presented or not. The agency is marketing properties as they become available, with or without green grass.”

The 403ha Moura block Marobi, achieved $6425/ha – paid by a nearby neighbour adding to their existing holdings.

Col Medway, LAWD senior director

LAWD’s Col Medway said there was definitely a higher level of property listings across the country this winter.

“People aren’t holding off until spring. They are quite happy to go to market due to the seasonal conditions. Most properties are inspecting well across most regions of Australia, apart from the western districts of Victoria.”

Col Medway

Mr Medway believes the southwest slopes is probably the hottest market in New South Wales at present, driven by producers chasing expansion.

“Inquiry is strong for mixed farms, especially where there is a strong sheep component.”

However, Mr Medway cautioned that while the property market was strong, it was not as deep as some are suggesting.

“Some assets aren’t attracting strong local or neighbouring interest. In most cases, there are just two or three really serious contenders – not five or six.”

“A price sensitivity appears to be developing, with buyers choosing to wait and watch where the market is headed,” he said.

Mr Medway said LAWD had a reasonably strong pipeline of property listings coming to the spring.

“We are currently preparing campaigns for producers who have made a decision to go to market now – they haven’t been holding off. They have just come to the realisation they want to sell.”

Mr Medway can’t see values retreating any time soon but doesn’t believe they will continue to rise at the same rate.

“I believe prices are very close to plateauing,” he said.

 

 

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