Drought not stopping farmers from expanding
Demand for rural properties in some parts of the country remains quite strong despite drought conditions and the poor presentation of land causing farmers to pull back the reins on listing their properties for sale.
“Surprisingly, the interest in rural property hasn’t wavered much in the last little while … it’s just the opportunity to borrow money that was a hiccup,” auctioneer and chief executive of Ray White Rural and Livestock Stephen Nell said.
“Despite the conditions there seems to be a real drive for locals to purchase more land. Most people think it will rain, and that is the gamble people will take – that it will rain and they will capitalise on that when it does,” he added.
Mr Nell auctioned off two NSW central west farms on Friday, each receiving a single bid with both potential buyers still in negotiations when this story went to print.
Brian Mcaneney, of Ray White Rural in Dubbo, said that while a subdued market would be expected given the season they’d just had, “the phones won’t stop ringing”.
One of the properties being sold by Mr Mcaneney is “Emrose” in Baldry, a 1513 hectare grazing and breeding property 90 minutes north west of Orange, which has already received substantial interest from graziers across the NSW Tablelands and further west of Dubbo. Mr Mcaneney expects the property to go for in excess of $4.8 million to $5 million.
“For the area and for the season it’s got a reasonable amount of feed on it and that’s what’s proving popular among potential buyers – it’s largely been destocked for 18 months,” Mr Mcaneney said.
“Interest is coming from all over. The sheep market, and up until recently the wool market, has been very profitable and this is a property that can run substantial [numbers of] sheep.”
However, according to the latest rural property review by valuers Herron Todd White, the pass-in rate at auction for farms in Central and Western NSW increased in August with some vendors wanting bullish prices. Purchasers were showing hesitation, with limited cash flow from their existing holdings and faced with little to no crop or stock feed from any potential purchase.
In New England and North West NSW, the majority of which is affected by drought, listings remained low but Herron Todd White noted an increase in neighbour to neighbour sales.
George Barton, of McCulloch Agencies, who sells properties in the region said with conditions “abominable … the worst in history”, listings were slowing, but they weren’t down dramatically.
“Demand is coming from those interested in those lifestyle, or small blocks where people aren’t making a full income from farming, particularly popular,” Mr Barton said.
“We are also seeing big blocks still selling at reasonably high prices because people aren’t getting decent returns with money just sitting in the bank, they’d rather invest it in agriculture.”
Mr Barton noted several high profile “across the fence handshakes” in the past few weeks had contributed to a lack of on-market listings.
“The trend is locals buying at the moment. The corporates and international buyers have slowed, hence you’re seeing a lot of neighbour to neighbour transfers,” he said.
