Hot WA market shows switch to year-round transactions

Linda Rowley, May 25, 2023

Cheriton Farms in WA’s eastern wheatbelt recently sold to neighbour John Nicoletti for $10M. Photo: LAWD

THIS WEEK the property lens focuses on what some are describing as the hottest cropping market in Australia.

Traditionally, farmland in Western Australia is brought to the market in the spring for settlement in February and March.

However, LAWD directors Danny Thomas and Perth-based Simon Wilkinson said rural sales specialists are no longer encumbered by the crop cycle.

“Our agents are transacting institutional assets every month of the year, not just during the spring selling season.

“In the background, proactive buyers are actively approaching LAWD seeking guidance on future purchasing strategies.”

Not only does Mr Thomas consider the WA cropping market as his preferred market nationwide, he claims it holds the distinction of being the most dynamic market across Australia.

“WA farmland is undervalued relative to the rest of Australia.

“Comparable assets on the east coast are sometimes achieving double the price per hectare
based on rainfall and soil types.”

Mr Thomas said the affordability of WA is drawing the attention of institutional investors and large family owner-operators.

“Established funds from the east coast, seeking geographic diversity, have the opportunity to acquire substantial scale assets at a considerably lower rate per hectare.”

“The substantial size of landholdings is a significant factor driving numerous purchases, which, when compared on a dollar-for-dollar basis, are between 40 and 60 percent more affordable than those on the east coast,” Mr Thomas explained.

Mr Wilkinson agreed, saying under equal circumstances (including yield, rainfall, soil type, and infrastructure), investors facing economic challenges and desiring favourable returns are shifting their focus towards WA.

Both Mr Wilkinson and Mr Thomas said another drawcard is WA’s proximity to export markets.

Low-rainfall areas in New South Wales are up to nine hours from Sydney, Brisbane or Newcastle, while comparable areas in WA are four hours from major ports.

Mr Thomas said if you were to stick a compass in Perth and draw a 350km arc, most of the WA wheatbelt would be included.

“That is quite different from growing a crop at Hillston in NSW’ western Riverina and trucking it to Geelong Port in Victoria.”

“Investors in search of cropping and livestock assets along the Newell Highway (the primary road connecting south-eastern Queensland and Victoria through central New South Wales) are now turning their attention to the west in order to acquire cost-effective production per hectare,” Mr Thomas said.

Land values by region

In its latest annual Australian Agricultural Land Price Outlook, Rabobank said prices paid for farmland in Western Australia have reached a record high following three consecutive good seasons.

It said the state’s average agricultural land price increased by 22.5pc in 2022, bringing the value to just over $6000/ha.

Mr Thomas shares the view that farmland prices have reached record highs and predicts values are likely to continue rising.

“Following three consecutive favourable seasons and a promising outlook for 2023 (subject to weather conditions), the current state of the WA property market indicates no discernible limit or ceiling in sight.”

Mr Thomas said another record cropping season would continue to buoy confidence and purchasing.

According to Mr Wilkinson, the current land values per arable hectare, and encompassing buildings and operational infrastructure, contingent upon growing seasonal rainfall, rainfall reliability and soil characteristics, are as follows:

  • Eastern Wheatbelt with 300-340mm annual average rainfall: $1125-$1600/ha;
  • Esperance and Great Southern regions with 450-550mm aar: $10,000-$15,000/ha;
  • Central Wheatbelt with 350-450mm aar: $5000-$8000/ha; and,
  • Northern Wheatbelt with 300-500mm aar: $3500-$10,000/ha.

Mr Wilkinson said WA’s proximity to Asian and Middle East markets is also convenient.

“WA is predominantly an exporting state across all commodities and CBH has the ability to ship significant tonnages of grain.”

Coombrae Aggregation at Hyden is listed for sale at $2326/ha. Photo: Elders Narrogin

Mr Wilkinson highlighted the significant progress made by dryland farmers.

“Farmers in regions with low rainfall are shifting away from continuous cropping and implementing alternative practices to optimise their farming operations.”

“These include applying lime to stabilise soil pH at depth, employing soil-blending techniques (deep ripping) to combine clays with lighter sands and using broad hectare spraying to conserve moisture,” he said.

Furthermore, Mr Wilkinson anticipates a shift among producers from sheep to cropping.

“While Western Australia has traditionally relied on the live export of sheep, current market pressures are prompting some producers to transition away from livestock and expand their cropping operations.”

Recent listings

Silverback Farms: 1827ha 10km from Toodyay, 18km from Northam and 55km from Perth in WA’s Avon region. Highly productive dryland cropping portfolio growing barley, wheat, oats and canola, as well as running 200 Angus breeders.

Coombrae Aggregation: 7737ha east of Hyden, 300km south-east of Perth. Large-scale broadacre farm with good quality, medium loamy soils producing wheat, canola, barley and legumes.

Recent sales

Daisy Downs: 22,568ha north of Mullewa, 120km from Geraldton in WA’s mid-west, sold to Energy giant BP’s Low Carbon Australia for a record $23M.

Cheriton Farms: 7329ha at South Yilgarn, halfway between Southern Cross and Hyden in WA’s eastern wheatbelt, sold to neighbour John Nicoletti for $10M.

Beria: 7970ha at North Wialki in WA’s eastern wheatbelt. The 11 contiguous parcels were purchased by a local grower for close to the $6.95M asking price.


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