Demand for farmland despite dip
TASMANIAN farmland remains in strong demand despite a downward trend in overall rural property sales.
The Rural Bank’s Australian Farmland Values report shows the number of rural property sales in Tasmania fell by 15 per cent in 2016, a decline for the third consecutive year.
The report details transactions of land 15ha and larger.
Last year also saw a 30 per cent drop in the area of farmland sold to 20,809ha.
Overall the value of the land sold also fell by 28 per cent to $153.9 million.
During the past four years the average median price of farmland in Tasmania has increased by 4.4 per cent and last year was $8673 per hectare.
The report shows the median price has fluctuated significantly year on year since 2009, with changes between 8.8 per cent and 35.9 per cent.
During 2016 the area traded represented about 1.2 per cent of Tasmania’s farmland.
Landmark Harcourts real estate agent John Hewitt said while the number of properties sold last year at 184 was lower than 216 in 2015, the sale values depended heavily on the type of properties being sold.
However, Mr Hewitt said the current rural market in Tasmania was buoyant with very strong demand and increasing prices.
He said interest in larger mixed cropping and livestock enterprises with irrigation had grown significantly over the past couple of years.
Mr Hewitt said high livestock prices had helped to underpin an increase in prices of 10 per cent to 15 per cent.
While fluctuating milk prices have kept a lid on the increase in value of dairy farms, Mr Hewitt said interest from corporate buyers, particularly from the United States and Europe, was significant.
“Dairy prices have been a bit flat because of milk prices but corporates are still looking to buy properties here.
“These companies are definitely looking for larger-scale properties. The dairy prices haven’t moved, but the number of sales has increased.”
The expansion of irrigation also creates demand and Mr Hewitt said cropping properties with the potential for dairy conversion were sought after.
“It’s certainly helping, there is no doubt about it’s creating interest,” he said.
Over 20 years, growth in the median value of larger land parcels has been good, with average annual lift of 7.1 per cent for sales of 80ha to 149ha and 9.3 per cent for 150ha and up.
The national median farmland price increased by 9.3 per cent in 2016 after a 5.3 per cent lift in 2015 and a 6.8 per cent increase in 2014.
Dairy prices have been a bit flat but corporates are still looking to buy here JOHN HEWITT
CHINESE ownership of Australian farmland has increased by 2.6 million hectares in 12 months.
The increase was driven by the sale of pastoral company S Kidman & Co, the nation’s largest cattle property.
Chinese investors now own 25 per cent of foreign-held land or 2.5 per cent of all agricultural land in Australia, according to figures released last week.
However, despite the increase in Chinese ownership, Britain still remains Australia’s largest foreign investor in agricultural land.
British investors own about 27 per cent of agricutural land held by foreigners, or 2.6 per cent of Australia’s total agricultural land.
Investors from the United States were in third place with holdings of 0.7 per cent of agricultural land.
The land register shows foreign investors held just 13.6 per cent of all Australian land in June 2017, down from an adjusted 14.1 per cent the previous year.
Foreign ownership has plummeted by 33 per cent in South Australia and gone down by 11 per cent in Queensland and by 10 per cent in the Northern Territory.
Overseas investors have bought up more land in Western Australia but foreign ownership still represents less than 17 per cent of the state’s agricultural land.
Treasurer Scott Morrison said the Federal Government understood “that trade and foreign investment creates jobs for Australians, and always will” .
He said the Government had taken “consistent and determined action” to ensured foreign investment is not contrary to the national interest.”