Good value to be found in Western Australia rural market: HTW rural

Good value to be found in Western Australia rural market: HTW rural
Good value to be found in Western Australia rural market: HTW rural

Western Australia is still considered in some regions to provide good value in comparison to other Australian states and territories, according to the latest Herron Todd White (HTW) rural report. 

The report notes that the state is very diverse; from cattle stations in the northern pastoral regions to vineyards in the south-west and many other agricultural, horticultural, silvicultural and aquaculture land uses in between.

"We consider that the entry level in Western Australia would initially be at a hobby farm level in areas which are affordable for a scale which can develop some level of return and then build on from there," the valuation firm said. 

A number of areas surrounding the Perth metro area, south-west and great southern have been heavily influenced in the last couple of decades by rural lifestyle purchasers driving land values beyond limits to make a commercial return and what would be considered entry level rural.

A 20 hectare city farm in Hopeland, an outer suburb of Perth has been sold for $500,000.

The horse and hobby farm at Lot 504 Henderson Road (pictured below) comes with tree lined creek and mature trees throughout the property. 

It is close to the surface water including a soak. 

Good value to be found in Western Australia rural market: HTW rural

"We therefore would look to the wheatbelt areas and the medium to low rainfall areas that have lower land values. However, they also have lower yields and are more susceptible to drought conditions, so not without risk," the valuation firm said. 

"We did a quick search and for $460,000 you can buy 1,259 hectares or 949 arable hectares at Bencubbin in the eastern wheatbelt.

"For a purchaser looking to get into agriculture this is an affordable level and scale with residential improvements.

"The asking price equates to $485 per arable hectare which outside of pastoral regions would be considered one of the lowest price points in the country.

"This scale would not be viable as a sole source of income however someone interested in agriculture could work in the industry in the surrounding areas and use this as a starting point to build a viable operation and also use as accommodation."

According to the HTW report, current livestock and machinery prices will make it difficult to stock and crop the property straight away and require additional investment, however the use of contractors for cropping or building a mob of sheep over time can limit the initial capital outlay required.

Benchmark surveys indicate that the low rainfall region can produce up to 1.7 t/ha of wheat and carry 2.4 DSE/winter grazed hectare.

A number of good seasons have seen demand for cropping and grazing properties increase with values increasing accordingly across a number of wheatbelt regions.

This area has been subject to drought conditions and therefore subject to higher risk of not providing a return and therefore capital gains will likely be lower.

A current listing within Wheatbelt regions is Grassdale, a 246 hectare property that has been offered to the market in the first time with $1.5 million hopes. 

Located on the edge of the Wandering, Grassdale (pictured below) features quality soils, grazing, treed creek lines, rock and bush as well as lower saline land. 

It includes an early 1900s dwelling with views, shearing shed, six main paddocks with twi smaller holding paddocks and seven dams. 

Good value to be found in Western Australia rural market: HTW rural

"We do however note that the continuous development of agricultural technology and plant varieties is resulting in an potential increase in yields and returns and these developments could have a significant impact on the production potential of the lower rainfall areas which has the potential to flow on to capital gains." 

Tags: 
Western Australia Rural Property

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