Central Queensland mixed farming land sales continue 2016 strength: HTW
Central Queensland rural property sales in the first quarter of 2017 have continued on from the strong final quarter of 2016 across all asset classes, according to Herron Todd White (HTW).
In their latest rural report, HTW said two recent sales in the Central Highlands of mixed farming and grazing blocks are proof positive in the strength of the local market - Rickyl (1,511 hectares, 18 kilometres east of Capella, predominantly grazing); and Park View (2,075 hectares, 15 kilometres west of Springsure, mixed farming and grazing).
"Rickyl sold at auction for $3.1 million, equating to $2,052 per hectare, which indicates a similar dollar per hectare rate as the dryland farming property Matilda Downs, which sold in January at a rate of $2,054 per hectare," HTW said.
"Park View sold at auction for $4.5 million equating to $2,169 per hectare.
"Both of these sales indicate a strengthening of values from sales of similar properties that occurred 12 to 24 months ago.
"It appears that values for grazing and farming land (with similar land types) are level pegging.
"The upcoming sales of two genuine breeder blocks, Galloway Plains (13,076 hectares, via Calliope, south of Rockhampton) and Develin Station (via Marlborough, north of Rockhampton) will be a good test of the demand for larger scale Central Queensland breeder country which is a thinly traded market, primarily due to lack supply rather than lack of demand.
"It will be interesting to see if the record weaner prices of late will have an influence on the value the market determines for these properties."
On average, more than one quarter of Queensland’s beef herd is located within the Central Queensland grazing district, according to the report.
The property valuation firm says that it is no surprise to see this market has shown the highest rural land growth rates over the past three to five years correlating with accelerated increases in beef prices.
Property resales provide the best evidence of the true change in market value and in recent months a number of properties have transacted with total capital uplift generally in the order of 25% to 35% over the past five years.
While the resale market has demonstrated solid land growth changes, these rates are generally limited to genuine fattening properties in Central Queensland (which are highly sought after and as such transact with greater frequency), with the second and third tier properties experiencing a more moderate level of growth.
Recent evidence of the demand in Central Queensland for high end properties includes the Hughes family purchase of Tumbar ($67.5 million) and the competitive auction results of Northampton and Inverness (above) at Blackall ($13.59 million and $13.925 million respectively) and Arcoona and Old Delargim near Moura ($12.85 million and $9.4 million respectively).
As a result of the limited supply, there has been a smaller volume of sales which has been concentrated on larger, higher valued properties which has greatly increased the overall annual transactional value of the Queensland rural market.
The size of the 2016 rural transaction market was over $3.1 billion compared to $1.48 billion in 2015 and $1.9 billion in the 2007 previous market peak.
An 86 hectare dress circle, irrigated cane farming aggregation in the locality of Alexandra changed hands in January at a strong price of over $20,000 per hectare for measured freehold cane land and demonstrates continued condence in the local sugar industry despite last season’s milling problems.
In December, the further west you go, the greener it got, the HTW report noted.
The record breaking unseasonal rainfall throughout the winter months had (for the most part) put an end to what was widely considered the worst drought in the past century.
“As we tracked westwards, the view from about 8,500 feet turned from a greyish brown colour around Rockhampton (somewhat typical for this time of year, in anticipation of the coming wet) continuing out to the Dawson Valley," the report stated.
"The abundance of feed on the ground is extraordinary, making it difficult to imagine that only 12 months prior some of these areas were struggling to keep even the most resilient native animals alive, let alone carry livestock.
"Most of these areas are now severely under stocked relative to the amount of highly nutritious feed available.
"Stock on the ground are now spread far and wide living in mobs of three or four head in their own little patch of paradise, picking through the smorgasbord of herbage and grasses on offer.
"Given these sights it is not surprising that the more southerly located Nappa Merrie Station recently sold prior to auction," the report noted, adding the biggest problem faced by stakeholders in this region is finding and affording stock to take advantage of these phenomenal circumstances.
"Many of the holdings are currently stocked at well below half of their long term average and probably closer to 25% of their current capacity.
"At least these low numbers will give the land and pastures a well earned rest and a chance to regenerate."