Mildura rural values holding despite lower sales volume: HTW

Mildura has seen a lower volume of rural sales during the first half of 2019, which is not surprising given the extremely dry start to the year, according to the latest Herron Todd White (HTW) report. 

"However there is evidently still demand for better standard rural assets, and the sales which we have seen suggest values are holding at similar levels to 2018," the valuation firm said. 

A 131-hectare wine grape vineyard located to the north of Mildura recently sold at levels which show an average $32,250 per hectare for the area planted to vines.

The vineyard has a history of good yields and relatively low costs, but also contains a high percentage of Chardonnay, which currently offers lower returns per hectare than most other varieties, HTW said.

"The lower Australian dollar is helping maintain stronger prices for wine grapes and there is a feeling of optimism that returns will continue to improve," the valuation firm said. 

The table grape industry has enjoyed another successful harvest, with fruit quality mostly good and strong export prices.

"We expect to see growers continue to plant new varieties, which will see ongoing demand for the remaining vacant land parcels in the irrigation districts," the valuation firm said.

A corporate buyer recently acquired an 85-hectare aggregation in the Red Cliffs district, planted mostly to table grapes but also with some wine grapes, at a price which equates to around $80,000 per hectare for the better table grape varieties and between $27,000 and $36,000 per hectare for the area planted to wine grapes.

A 13 hectare Red Cliffs property (pictured above) recently sold for $272,500. It was advertised as being suitable for table grapes, avocado and citrus.

Located at 297 Stewart Road & 368 Woomera Road, the property has elevated red loam soils, a natural slope and drainage.

It has a three bedroom cottage.

The report noted a much higher cost of leasing irrigation water compared to levels applying up until mid-2018, is expected to see buyers remain cautious about committing to large scale, greenfield developments.

"This position could change if we see a wetter than average winter and spring in the Murray River catchment, however there is increasing commentary around whether the Murray Darling basin can supply additional permanent tree crops.

"It is likely that we will see much less greenfield development over the next few years," says the report. 

Nearly all of the Mallee has been dry sown to cereal crops this season, many of which are just starting to emerge following some rain in early May.

"We would expect to see few sales in the Mallee between now and November, with confidence levels (and bank balances) heavily dependent on how the coming season unfolds."