A DECLINE in the number of rural properties being put to the market against a backdrop of sustained strength in the cattle market could significant gains in the rural property market.
Tim Lane, the national director for rural with valuation firm Herron Todd White, said in some areas it would not be surprising to see upwards of 10 per cent movements in the next 12 months based on the continued positive outlook.
The market optimism was also being driven by Australian dollar trading at the US70c level, low oil prices, and strength in some sectors in the cropping industry.
“There appears to be a lot of confidence in the market place and in some areas we continue to see increased local activity and transactions with more competition outside the corporate sector which has dominated the landscape for the past two years,” Mr Lane said.
However, while corporate and international investors including Chinese buyers were still active, it was local buyers who were placing upward pressure on the market, he said.
“The corporates are still actively looking and running the numbers, but it is getting harder to find the right assets to fit the scale and profile they are seeking,” Mr Lane said. “The increased local activity is what we have been looking for in the various markets to support a value shift in the market and take a few sales to now be more like a trend supported by more sales.”
Mr Lane said terms of trade improved in 2015, highlighted by the free trade agreements that were executed and interest rates remaining lower than the long term average.
“We saw and continue to see weak global oil prices which should assist to reduce production costs, especially cropping related activities, an Australian dollar holding at or below US70c and certainly strong outlooks remain for the cattle market.”
Mr Lane said rain in drought affected areas including much of western Queensland, parts of north west NSW, and to a lesser degree north west Victoria could an increased number of properties come to the market.
“Specifically for the Queensland market the time is getting closer to make or break again for the season going forward,” Mr Lane said. “Water, or access to it, will continue to play an important role in the ability to sell some properties.”
