Property

WA listings in short supply despite buoyant market

Liz Wells, December 11, 2020

Maybenup in WA’s Great Southern region sold at auction. Photo: Elders

LISTINGS of large-scale cropping properties and mixed farms in Western Australia are in short supply, reflecting buoyant demand from expanding operations within the state.

Based at Kellerberrin in the WA wheatbelt is Nutrien Harcourts agent Rex Luers, who says his listings are at an all-time low.

“I have not got one acre left to sell, and I don’t think that has happened to me before.”

“I’d normally have six or seven places on the books, and at the moment I don’t have anything in my area.

“I’ve got a list of buyers who are keen to look at what comes up.”

One of Mr Luers’ most recent sales was Fullers’, the last holding to be held by the Fuller family of Cunderdin.

Situated 23 kilometres north of the town, the 573-hectare block has 525ha of arable country, a 25,000-litre liquid N storage tank, and connection to scheme water fed to troughs and tanks.

“It sold to an existing landholder from a neighbouring shire to the west, and at very strong price that’s similar to sales in the region.”

Following an increase in values of 10-15 per cent in the past year, Mr Luers said he did not expect the shortage of listings to prompt further price rises.

“I think we’re at the top of it now; mind you, I said that this time last year.”

Mr Luers said the average cropping season now winding up was being offset by strong livestock values.

“Red meat markets have never been better, and cereal prices are still good.”

Mr Luers said most districts he was dealing with had a mixture of straight cropping places and mixed farms, and they were both making the same money on a per-hectare basis.

He said good improvements as well as favourable soil types were rewarding vendors with a premium over less country and developments.

“When there’s good fencing, water and farm buildings, buyers are a bit more astute about paying for that because they see the value in it.

“Soil’s the most important thing, but stock-handling facilities, good sheds and a good home help get a good price too.”

On top of strong commodity prices, Mr Luers said the combination of low interest rates and the attractiveness of agriculture as an investment class have encouraged most people in farming to stay or expand rather than sell.

“You can generate a 4-6pc return on investment per annum, and people that don’t want to farm themselves are buying them and leasing them out.”

Elders WA senior real estate executive rural Simon Cheetham also said listings were limited, and auctions were swinging back into favour.

“We’ve got low interest rates, and a lot of farmers who are in a strong financial position because they’ve built up sizeable businesses, and they’re looking to keep investing.

“Most of the record prices and the demand we’re seeing is coming from local farmers.”

“We’ve had some really successful auctions in 2020, after they fell out of favour for a few years because the market wasn’t as strong.”

Mr Cheetham said Elders had a number of larger, quality farms under contract to settle early next year in a climate where demand was exceeding supply.

“There are still buyers crying out for more properties, and a reduced number of listings.

“It’s a good opportunity for sellers is they’re interested.”

Support from next generation

Mr Cheetham said a considerable number of people aged under 30 were heading back to the farm.

“We’re seeing some big numbers of people coming back to the family farms because the sector is doing well.”

He said farm-sector success was fuelling demand from family operations expand within and beyond their home districts.

“In the northern wheatbelt, they’re at the tail end of harvest, and they’re starting to look at what is available.

“A lot of the inquiry is looking to buy a base in a different rainfall zone.

“It’s a way for them to spread risk.”

Mr Cheetham said while growth in WA rural land values had been considerable in recent times, it had not inflated it beyond its real value.

“If we compare WA to other countries or to other states in Australia, the value still stacks up.”

One of the headline auction results from WA this year was Maybenup, a 1479ha property near Kojunup in the Great Southern region.

Under the hammer of Elders Real Estate auctioneer Don Fry, it sold in October on behalf of vendors Jim and Pam McGregor for $10.7 million, or around $7234/ha, which is believed to be a new district record.

Maybenup was bought by a syndicate of locals comprising Roger Bilney, Kevin Broom and Craig and Shelley Radford.

 

 

 

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