NSW North Coast shows strong rural lifestyle values: HTW rural

The NSW North Coast has very strong underlying rural lifestyle values for many properties, particularly those closer to the beaches and towns, according to the latest Herron Todd White (HTW) rural report. 

The report suggests there are many smaller scale farms operated on a weekend basis as the owners are employed off farm or the farm is totally managed or operated by share farmers or lessees. 

Many of these farms are not viable operations on a stand alone basis.

Entry level for macadamia nut farms is possible below $1 million for build up style blocks without a house and sheds.

The market below $1.5 million is tight if there is a reasonable house, sheds, some plant and equipment and a mature macadamia orchard of a minimum of ten hectares.

"At present, ten hectares of mature macadamia orchard, whilst quite profitable at current commodity prices if operated well, is not considered a viable stand alone operation having regard to some potential variations in seasonal conditions and average commodity prices over a longer term historical period," Paul O’Keeffe, the HTW valuer commented. 

"At present, the market for viable stand alone operations likely exceeds $2 million.

"There has been capital growth in recent years as the commodity price and the rural residential property market has firmed."

Listings of macadamia farms for sale are limited, however the analysis of sales indicates $75,000 to $100,000 per mature orchard hectare excluding structural improvements, crop, plant and equipment and balance land, with the top end of the range expected to have very good presentation, row spacings, production and verifiable history of production.

There are various horticultural pursuits including blueberries, avocados, nurseries etc, however in very general terms, over $1.5 million would be required to be considered as viable allowing for seasonal fluctuations in prices and conditions.

For sugar cane farms, there are build up style blocks that sell for below $500,000, but they would not be viable operations on a stand alone basis.

The report notes that on current commodity prices, many sugar cane farms are not particularly profitable.

Macadamia nut farmers have been active purchasers of sugar cane farms, but some farms that have sold for the purpose of continuing to grow sugar cane have been in the $1 million to $2 million price bracket in good cane growing areas.

Values above $1.5 million would likely include a house, sheds and some plant and equipment, but a lift in commodity prices is required for these to be strictly considered stand alone viable operations at the moment.

These farms, excluding structural improvements, crop, plant and equipment and balance land indicate in the range of $10,000 to $15,000 per sugar cane cultivated hectare.

The most apparent avenue for capital gain is in the underlying rural residential value and from external industries demanding the land, such as the macadamia industry.

The macadamia purchasers have paid over $20,000 per hectare for some cane land, so this is a logical point of capital gain.

Dairy farm sales are very few. Beef cattle grazing sales are common and there are many entry level build up style blocks that can start from relatively low value levels below $500,000.

Viable stand alone beef grazing properties have not been common over the past 12 months.

Investments in the $2 million and $3 million range would be expected to obtain some sort of viability.