2734ha St Aubyns Station south of Walcha is one of three NSW New England properties set to test the higher end of the market helping determine where property value levels are now positioned. See references below

AS THE end of the year draws nearer, this week’s property review shines a spotlight on the spring rural property market across the eastern and southern seaboard.

Preston Rowe Paterson Townsville-based partner Roger Hill said the 2024 rural property market has witnessed a stalemate between purchasers and vendors, particularly on many places offered in North Queensland.

“It has been a low sale volume year, but it is not the first time this phase of the market cycle has been endured and it is certainly nothing to be alarmed about,” Mr Hill said.

Roger Hill

“When business parameters fell away in 2022/23, property values could not continue rising. When cattle prices fell, operating costs rose and interest rates went up, removing the fuel for increasing property prices,” he said.

Earlier this year, the property market was ‘stale and hollow’ and there was a gap between vendor expectations and purchaser pricing, Mr Hill said.

“This appears to have slowly changed in recent months. Typically, this time of year is quiet for property transactions, however with cattle prices inching up, people are starting to negotiate again.”

At present, there were around six properties under negotiation in north and north-west Queensland and a few successful deals were starting to occur.

Mr Hill said these deals were achieving similar levels to those seen in 2022 and 2023.

“Recent pricing is similar to the parameters when the cattle market peaked in late 2022 and then tanked-out in 2023. Property values stopped rising when the commodity fell away and now the Eastern States Young Cattle Indicator is up 54 percent compared to 12 months ago.”

Conversely, he said several properties remained on the market and while they were receiving some market interest, vendors had their own reasons for their pricing.

Some will play the sit card because that is what their property is worth to them

“They may not be compelled to sell and perhaps they are confident that business conditions may improve into 2025 and 2026. Some will play the sit card because that is what their property is worth to them.”

“There are phases in the market cycle where marketing periods do extend until either the vendor takes the offers on the table or purchasers come up to meet vendors, or they structure a deal,” Mr Hill said.

He cites the market’s current treatment of Brahman cattle as a possible cause for slow moving property sales in North Queensland.

“Much of the northern forest breeding country is Brahman-based genetics. Up until recently, Brahmans have been difficult for agents to sell, and as a result, that country hasn’t been rushed at.”

“However, the situation is turning around as cattle start to sell in saleyards and boat orders are on the rise. As businesses pick up, the economy will follow suit and so too will the property market,” Mr Hill said.

He said the stalemate in the north was not over, but was washing-out.

“Not everything on the market will sell this year. Some stock will still be on offer next year. The same phase occurred in 2008/09 when a 25-30 percent gap appeared.”

Mr Hill said when the marketing period slows down, it could take years to sell a property.

“When that happens, businesses have typically taken a hit from a negative market impact, such as a live export ban or trade uncertainty. As a result, property prices typically fall, and vendors tend to meet purchasers expectations.”

“On the flip side, if the cattle market rises or interest rates soften (allowing the business to improve), vendors’ expectations are typically met in the long run.”

Mr Hill expects to see more properties sell in 2025.

“Interest rates appear to be towards the top of their cycle and cattle pricing comments are positive, so it is not all doom and gloom for market values.”

Central/Southern Queensland

Mike Barry

Toogoolawah-based Shepherdson & Boyd agent Mike Barry reports rural property in his region of southern Queensland has hit the wall in the past month.

“Some expectations are too high and as a result there is a standoff between some vendors and buyers. The phones have just stopped ringing.”

“In addition, the banks are questioning whether properties can return enough for what the lenders want to borrow.”

Darren Collins

Conversely, LAWD agent Darren Collins is witnessing an uptick in activity.

“Up until recently, the market has been very cautious, apprehensive and slow to move. However, a number of properties sitting on the market have had renewed interest.”

“In fact, I have received more offers in the last two months than in the previous six and around $300 million of cattle-related properties are now under contract or under offer,” Mr Collins said.

He said the strongest inquiry in the last 18 months had been driven by producers wanting to secure additional country before Christmas.

“Good rain in some areas of the state has stimulated interest as well. A-grade assets in Central Queensland are selling very well and properties strongly underpinned by water are under particular focus as well.”

NSW

Angus Ross

Herron Todd White NSW and ACT valuer Angus Ross reports a softening in buyer demand with a number of properties experiencing extended selling periods.

“A number of properties remain on the market from 2023, with some of these relisted with different agents,” he said.

Mr Ross said three New England properties were set to test the higher end of the market and would help determine where value levels are now positioned.

They include:

• 5003ha Wirrabilla, 20km south-west of Walcha (pictured below)
• 2734ha St Aubyns Station, 33km south of Walcha
• 1011ha The Eulabah Aggregation (Eulabah, Balnagowan and Glen View), Niangala, 45km south of Walcha.

According to Mr Ross, there appeared to be buyer caution with more due diligence and extended time frames taken for many rural property acquisitions.

“Sales activity in 2024 has definitely decreased, however value levels have held up reasonably well with no noticeable or significantly decreased values across the grazing regions.”

Mr Ross said sales of higher-end grazing properties would largely be dependent on corporate interest which appears to be subdued at present.

“There continues to be some activity in the local buyer pool, particularly larger family operators looking to expand, which is the backbone of the local market.”

5003ha Wirrabilla, 20km south-west of Walcha

South Australia

South Australia has experienced one of its driest years on record.

Many crops (including oats, barley, wheat and canola) have been cut for hay because they were never going to finish and yet, the state’s spring property guide is showcasing 45 rural properties.

Phil Schell

Veteran rural specialist Phil Schell has recently set up his own independent business, Phil Schell Real Estate, and is hoping to work alongside other agencies.

He said typically during August and September, a rush of listings comes to the market before flattening in the lead up to Christmas and then improving again in the first quarter of the new year.

“It is now mid-November and there is more stock on the spring market than ever before,” Mr Schell said.

“In terms of transactions, cropping properties don’t usually settle until Q1, so there may be properties under contract that we won’t know about until the new year.”

Mr Schell said the South Australian rural property market was currently cautious due to the dry seasonal conditions.

“There are definitely concerns about property sales in Q1 and Q2 next year. Valuers are cautious, banks are cautious and buyers are cautious as they adopt a wait-and-see approach. Good summer rains would be a saviour for industry sentiment, as well as pasture growth and soil moisture for next year’s winter crop.”

Despite the caution, he said standout assets would continue to do what they have always done.

“Premium prices are currently being paid for A-grade assets, both under the hammer and privately, by existing producers seeking expansion.”

“In the meantime, a large gap is evident between A-grade assets and B and C property types across all rural sectors and they could remain on market for the next six months,” Mr Schell said.