Queensland's North and North Western rural property markets showing mixed signs

Queensland's North and North Western agricultural property markets are experiencing a wide variety of different trends in 2019, according to property valuation firm Herron Todd White (HTW). 

The valuation firm found that some areas were experiencing strong selling conditions, while others were providing more opportunities for buyers.

In regards to grazing, the national drought is bringing buyers to North and North West Queensland, it noted.

Sale activity continues in the downs country to the south of Richmond/Julia Creek to Kynuna and Corfield.

Current sale contracts are reflecting similar value rates as the peak period just after the monsoonal event in February.

These are ranging from $321 per hectare ($130 per acre) to $395 per hectare ($160 per acre) in general with a peak to $432 per hectare ($175 per acre).

The demand for property with any grass at all is still high, according to the report. Current sales have varying amounts of available grass and varying quality of grass.

Sales contracts in February/March were at similar levels to the last property market peak in 2008/9, HTW noted.

"There was a short period after March (when the grass did not grow after the flood) where a few softer priced contracts were struck.

"These were at prices that were closer to 2018 values.

"There are very few local buyers in the mix in this area," the October report noted.

Some stakeholders told the valuation firm that they believe that these value levels are ‘where they should be, previous years pricing was when the country was in drought and had no grass’, and ‘there is more in the market yet for value increases’.

Others are sceptical saying that this market is ‘over priced’ and ‘when it rains in other areas of Australia, this market will take a dive’.

It is a good sign that there are competing thoughts and theories – vendors will sell, buyers will buy, HTW suggested.

"This keeps the market active."

Around Charters Towers, demand for country is strong with very little country on the market for sale.

Recent acquisitions have been by local buyers.

The lack of property being offered to the market is forcing the buyers to pay higher prices.

Variation in the respective markets means the locals are active in one market area, while out of district buyers are active in the other.

The rest of North and North West Queensland is not as busy, there are a few deals on the go and demand is there from a mix of locals and out of district buyers.

There are a couple of higher priced deals on the go that are reflective of a change in use, or an expectation of a higher and better use (farming).

"This is a positive dynamic for those market areas.

"Not all potential property vendors will benefit.

"This means that they will have to remain realistic as to what their property is worth when offering their property for sale," the report concluded.

 

 

In regards to suger cane however, the firm found that values for suitable farm land have been under pressure due to lower returns.

There has been some degree of value weakening.

As a result of the margin pressure that these farmers are in, they have been forced to either diversify or sharpen their operating costs again.

Those that are diversifying into break crops of Mung Beans, Beans, Chick Pea and in some cases, Sorghum are reaping the returns on the back of strong pricing.

The drought in the southern growing areas is benefiting these farmers. 

A winner here is the soil, which is benefiting from a change in crop.

As a result of the southern growing areas drought, the Burdekin is the winner.

Given the pricing of cane land and the water, the Burdekin is looking affordable at present.

Recent contract prices are from $15,000 to $18,000 per hectare for marginal cane land.

Of this some of the buyers have intentions of targeting the shorter growing cycles and present high pricing of grain returns.

The report concludes that "This is an exiting era of rural property market dynamics in North and North West Queensland."

Despite  continuing concerns around drought, there are positive signs in the region. 

Tags: 
North Queensland Herron Todd White

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