Limited spring 2016 rural sales activity in South West Victoria: HTW
There had been limited rural sales activity in South West Victoria, according to Herron Todd White’s December 2016 report.
The property advisory firm says it was against the backdrop of above usual winter rain and the market for cattle and sheep continuing at high prices.
But there had been limited sales activity when spring is traditionally the busy marketing period for farms.
Agents report the stock of property put to the open market is down on previous years for spring.
The farms in a wetter than usual state and therefore considered not appropriate to market and the increased farm income from continued strong prices for beef cattle and sheep have influenced the reluctance to offer farms to the market.
But the valuation firm noted the market's albeit limited activity "indicates values have firmed."
Grazing property was best summarised as seeing a small number of sales matched by the demand from usually corporate buyers.
"Several large name holdings that are well developed including good infrastructure have recently sold after strong competition from prospective purchasers.
"These properties generally comprise an area in the order of 2,000 to 5,000 hectares and usually attract local buyers.
There is limited stock," the report advised.
The valuers inquiry was stronger where the property is a sound, productive, ready to go farm without need for capital works to improve.
"From this local buyer pool a limited number of sales have occurred for grazing farms ranging in area from approximately 40 to 200 hectares.
"The property which is well developed is more readily saleable compared to a property requiring improvement which is slow to sell unless the price reflects the state of the property."
As a broad benchmark, the value of grazing land is in the range of $7,000 to $8,650 per hectare (ex buildings).
HTW detected recent sales for broad acre grazing property through the Hamilton district pointing to a lesser difference in value compared to similar type properties through the Hawkesdale district.
It also advised, "not surprisingly", the dairy farm market has almost gone into hibernation.
It noted the November auction listing of a 400 acre/162 hectare dairy farm at Simpson through Landmark Harcourts Timboon.
It sold for $1,709,000, having been listed on and off over recent years with initial $6300 per acre hopes, then $5000 per acre expectations.
There was also a December offering of a 370 acre dairy farm at Princetown which remains for sale at $4800 per acre.
The district's rainfall was noted as making a big difference in South West Victoria.
"Full reservoirs and flooding to many regions in Echuca saw many worried about water damage to crops rather than turning the mowers into paddocks.
This resulted in significant demand in most districts with the main exception being irrigated properties which were held back mainly by price cuts in the dairy industry and challenges in the horticultural sector.
This has resulted in a significant shift upward in underlying land prices, particularly in the Mallee where modern farming techniques are boosting confidence of producers that a yield is possible even with below average rainfall with good management," HTW advised.
