Far western NSW rural DSE rates almost double: HTW

The general southern New South Wales and northern Victorian market continues to display signs of strength and resilience, according to the latest rural report from Herron Todd White (HTW).

The valuation firm stated that recent positive rainfall outcomes across the Albury and northern Victorian areas has also served to allay any concerns that were beginning to appear because of the extended dry period.

"With regards to recent transactions, we are aware of a property approximately 50 kilometres north of Albury that has just gone under contract," the HTW valuers noted.

"This property is all open, mostly arable, improved grazing country, typical of the area and has transacted at approximately $8,300 per hectare, excluding the added value of the buildings in place.

"This is in line with recent agents comments about the area which indicated that the area to the north of Albury has been achieving $3,000 to $4,000 per Acre ($7,400 to $9,800 per hectare)."

Recently, a number of valuations in the far western New South Wales area to the north and north east of Broken Hill have been undertaken.

There has been a change in what the market has been prepared to pay on a dollar per dry sheep equivalent (DSE) rate for typical open grazing country in the area.

Previously, (up until late 2016) DSE rates in the $200-$350 range would have been expected, however, now all of the sales analysed indicate rates in the $400 to $500 range.

The valuers discussed that while initially this was "concerning" when the rates were reviewed in comparison to the rates paid for higher rainfall inside tablelands country to the east, "it became apparent that the relative ratio of dollars per DSE rates paid between the tablelands country and the far western country is still similar to what it has been".

"Now that far western country is at $400 to $500 per DSE, we see that the tablelands country is now $600 to $700 plus per DSE, whereas previously, rates were mostly in the $450 to $600 range."

These elevated rates equate to significant strengthening in the corresponding underlying land value.

The exact dollar per hectare rates vary with the carrying capacity of the country involved however, in general we would expect country to the north of Broken Hill to be in the $90 to $100 per hectare range.

HTW reported despite the deteriorating seasonal conditions that the Buckanbe offering has gone under offer.

Buckanbe is a 40,000 hectare, very well located grazing property on the Darling River just downstream of Tilpa.

"Whilst we are not aware of the negotiated outcome, we would expect it to achieve approximately $150 per hectare overall," the valuers concluded.