Weather patterns stalling South Queensland's rural market confidence: HTW
The weather patterns over the past four weeks have been breaking records for all the wrong reasons, according to Herron Todd White’s latest report.
The property valuation firm says that the dry and hot conditions have been felt right across southern Queensland.
In far western Queensland, Thargomindah broke the hottest day record for February at 47 degrees whilst it was also the hottest day and number of consecutive days reaching over 40 degrees on the Border River and Darling Downs areas.
“What the present weather conditions are doing we believe is stalling some of the renewed market confidence,” the report commented.
Growers and cattle producers are very cautious on the current weather outlook especially within the less traditionally secure rainfall areas but also because of the recent extended dry seasonal conditions.
The exceptional heat has dried off pastures, reduced surface water for stock needs and impacted summer crops, especially down grading or loss of mung bean crops.
Every shire west of the Great Divide in southern Queensland is drought declared with many being so since 2013 (fourth year).
Obviously seasons have always been a major deciding factor on profitability for the majority of agriculture enterprises.
Despite dry seasonal conditions being not necessarily uncommon, the extended dry periods and less than ideal long range forecasts may be of concern for producers wanting to expand but budgeting on improvement in the season which hasn’t eventuated.
What is the likelihood of stacking together exceptional cattle prices and wet seasonal conditions anyhow?
If anything, the present dry conditions are giving over anxious purchasers a reality check and possibly softening the aggressive purchasing by some parties as observed.
One of the drivers in the property market for both cropping and grazing country is landholders looking to acquire adjoining or near neighbouring properties.
“We are seeing premiums between 10% and 25% paid where strong competition exists. We have seen this trend occur within the Inner Downs, Goondiwindi, Condamine and Taroom market areas,” the report stated.
Subject to the potential demand for a neighbouring property some landholders are trying to negotiate a deal prior to being listed on the market.
However in markets primarily driven purely by local investors it can be difficult to determine the actual premium for those seeking economies of scale although there is evidence of a disconnect in comparison to other neighbouring areas.
The overall market has been slow for the beginning of 2017, however many properties previously listed for extended periods are now either generating increased buyer interest or are under contract.
For the southern part of Queensland there has been an increase in sale rates that has continued since 2014.
For 2016 the liquidity of the market has levelled despite data-set lagging indicating the decline.
In addition the median sales price has also firmed as evident in the sales graph below.
A 481 hectare cropping land at Lot 46 Tenomby, Goondiwindi (above) has been listed for $980,000.
Similarly the Tolmah Homestead at Condamine has been listed for $750,000.
