WA’s bumper farmland price growth to ease

Daryna ZadvirnaCountryman

Good seasonal conditions will continue to fuel demand for WA agricultural land over the next 18 months, while the drought-affected Eastern States market will experience “more smoke than fire”, according to new industry report.

Rabobank’s annual Australian Agricultural Land Price Outlook report revealed WA and South Australia had experienced record-high land price growth in 2018, with a 28 per cent increase reported in the west.

Report author and agricultural analyst Wes Lefroy said WA’s strong demand for rural property would maintain robust price growth but on a slightly softer trajectory compared to the previous year.

“For WA, 2018 was the latest in a string of high-production years, which, alongside record grain prices, fuelled farmer operating profits and confidence,” Mr Lefroy said.

“This resulted in strong demand for agricultural land and saw a sustained increase in prices.”

The report found WA also had the highest proportion of farmers in the country intending to buy property in the next 12 months.

Mr Lefroy said due to the persistent limited availability of WA’s premium properties, the demand for mid and low-tier properties would, in turn, also increase.

But it was a different story for the rest of Australia, with the long run of steeply rising land prices predicted to end for the Eastern States, Mr Lefroy said.

“Many would-be sellers in these areas have chosen to hold on to land until conditions improve and this has effectively created a ‘liquidity squeeze’,” Mr Lefroysaid.

“But looking ahead, regardless of whether the drought breaks in the next 18 months or not, we expect liquidity in agricultural land will increase, as some farmers will grow tired of waiting out the ongoing drought conditions and begin placing properties on the market.”

The report showed agricultural land prices increased by 14 per cent in both New South Wales and Queensland, while Victoria showed an increase of just 6 per cent.

Tasmania was the only State to record a decline in agricultural land prices, down by 2 per cent in 2018.

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