Records set for rural land sales

Wimmera real estate principals say farmland prices have been historically high and the coming months will set the trends for the year ahead.

Harcourts Horsham director Mark Clyne said there was a reasonable amount of land up for auction this month.

“Prime selling season is February through to April, which will set the benchmark for land prices this year,” he said.

“The best way to find the value of land is to auction it, because it’s the market that sets what people are willing to pay – there’s no set price for a parcel of dirt.”

Gerry Smith and Co managing director Gerry Smith said rural properties were continuing to sell well.

“It’s hard to pick a trend until the selling season ends at the end of March,” he said.

“There have been some high prices and they’re holding high, with demand definitely there.

“When commodity prices are relatively good, as we have seen recently, we see the returns in that farmers have the capacity to spend more.

“The amount of land on the market is not different to most selling seasons.

“It would be concerning if there was lots of land going on the market.” Mr Clyne said multiple records were set during the past 12 months – particularly for smaller land parcels.

“Farmers are paying $3000 to $4000 more on land than it is probably worth, just to get it,” he said.

“In the past two years we have seen the farmers who own some of the larger properties in the area and have access to funds, buy the majority of land that is for sale, particularly neighbouring properties to their own.

“Bigger operations are more capable to pay the bigger prices, however if their farms are now at capacity, they start to move to the sidelines and that’s what we’re starting to see.

“We may now begin to see farmers who have middle-tier size properties have opportunities to buy as they appear to have missed out in recent years.”

Mr Clyne said there was plenty of activity in the buying space with banks reporting farmers were assessing whether or not they had the capacity to purchase more land.

“If the market does hit a hurdle, it’s more to do with prices than selling land because there are always willing buyers – it’s just a matter of how much it would go for,” he said.