Values of farmland in the district continued their stellar rise in 2018 and have more than doubled in the last two decades.
Despite the drought impacting some sales in Southern NSW and the Federation Council area, recent figures released by the Rural Bank’s annual Australian Farmland Values report show the district continued its stellar growth for the year 2018 with a median price per hectare of $5,435 representing an impressive growth 14.1% from 2017.
In Moira Shire values rose to an all-time median high of $6,906 per hectare in 2018, a growth of 15.1% from 2017.
The Moira region also experienced a large amount of properties turned over with 77 transactions for the year 2018, the third highest area in the state behind South Gippsland (80) and Wellington (89).
Northern Victoria values soared from under $2,000 per hectare in 1997 close to $7,000 per hectare in 2018.
In Southern NSW farmland values also increased dramatically from around $1,000 per hectare to over $5,000 per hectare in the same period.
In Indigo Shire farmland value rose to an all-time median high of $8,883 per hectare in 2018, a growth of 15.4% from 2017.
Elders Real Estate’s Xavier Leslie of Yarrawonga said locally, farmland is very tightly held particularly on the Victorian side of the river and in most cases when it comes up for sale is purchased by locals/neighbouring farmers looking to expand their enterprise.
“I certainly support the figures that have been released which outline the growth within the local area from a Rural Real Estate point of view,” he told the Yarrawonga Chronicle.
“Even though the drought has severely affected many farmers throughout Australia the farm prices locally have remained buoyant due to steady rainfalls - with the exception of the 2018 season – and strong commodity prices across the rural sector which should remain strong in the foreseeable future.”
Ray White Rural Yarrawonga and Rutherglen Director Rikk Donlen said the rural market has maintained its strong inquiry level but is starting to see a market levelling on pricing, if the property does not meet the full requirements of the buyer.
“Strong local interest continues by the purchaser within the surrounding district and also they are accompanied with large companies looking to consolidate on holdings that they already have in the area,” he said.
“Low interest rates are certainly helping fuel the local farming interest in acquiring neighbouring land even though we have come through a very dry time.
“Demand is extremely high for good farming opportunities as we see the majority of rural properties put to the market are selling within 30 to 60 days across all price ranges.
“Days on market is still under 50 to 70 days if the property is priced correctly and marketed cleanly and all the features and benefits listed truly reflect the market pricing.”
Recently Ray White Yarrawonga/Rutherglen has operated as a buyer’s agent for a Melbourne Investor and a Victorian district farmer.
“We have placed offers on three properties, these properties have been through a marketing campaign with no result and still not sold. This indicates the market is moving up and down but clients, again, will pay but the property must reflect good value!” Mr Donlen said.
“Spring is on the way and the rural forecast is strong with many long term farmers now looking to create their lifestyle change as it’s time to enjoy the next chapter in their life.”
Brian O’Shea, Richard Wynne and Roy Monte from Paull & Scollard Landmark Corowa said whilst there has seen some considerable improvement in the value of farmland in the Southern Riverina, specifically in Corowa, Yarrawonga and towards the north, there is a limited supply of property to the market.
“This rise in land values is pleasing to banks in the local areas adding some long-awaited security and comfort,” they said.
“Currently we have willing purchasers for suitable properties however, sellers are hard to find in the region despite the opportunities in the marketplace. Should property owners have plans to sell in the upcoming years, now is may be the time to take advantage of the current situation where demand is exceeding supply.
“With improvement in the livestock market, in particular lamb and mutton we are starting to see some good profits and margins return with new season contracts for lamb at $10.00 a kilogram for August. The grain market still requires some advancement in order to contribute to markets and comfort growers.
“It is pleasing to see some real confidence and smiles on farming families’ faces, this has a very positive effect in the small rural communities where we all live, following the recent favourable weather conditions.”
Recent increases in land values will not impact on Federation Council rates for 2019/20. Rates are currently calculated on land values from 2016.
“With rate notices being issued in coming weeks, ratepayers will generally experience a 2.7 per cent rate increase on the previous year, consistent with the NSW rate peg,” council’s director corporate and community services Jo Shannon said.
“For rating purposes, land values for farmland, residential and business properties will be updated in 2020. Contrary to common perception, an increase in land value does not directly cause a rate rise.
“Council establishes the expenditure requirements to deliver services within its community and the funds required are distributed amongst all ratepayers. The property value is used to apportion the amount of rates to be paid by individual property owners. In a revaluation year such as 2020, some ratepayers will pay more and some will pay less, depending on the value of their property relative to other properties.”
Ms Shannon said through 2019/20 Federation Council will be undertaking a review of rates to bring all properties across the council area onto a common rating system.
“This project stems from the merger of Corowa and Urana Councils in 2016 and will determine the distribution of rates between property types,” she said.
“Community members will be invited to participate in this review when it commences later in 2019.”
The 2019/20 rate increase for Moira and Indigo Shires is 2.5%, in line with the Victorian rate peg.