Drought concerns affect sales in Mildura region, but positive signs appear: HTW

Drought concerns affect sales in Mildura region, but positive signs appear: HTW
Drought concerns affect sales in Mildura region, but positive signs appear: HTW

Mildura rural sales activity has been slower in 2019 due to concerns about irrigation water availability for horticultural properties and drought for dryland farmers and graziers, according to property valuation firm Herron Todd White (HTW).

The valuation firm found that these climatic factors appear to have stalled the rapid growth in property values observed since around 2015.

The growth in recent years has all been due to external influence, HTW said..

A combination of strong commodity prices, favourable exchange rates and low interest rates have helped most producers of horticultural crops generate returns that are well above long-term historic levels.

Meanwhile strong demand for lamb and wool has fuelled the recent growth in values of grazing country in the western division of New South Wales, although more recently a noticeable fall in wool prices and the prolonged dry spell may stem this growth somewhat.

While the strong export markets we have seen in recent years may seem to be outside the control of producers, in most cases there were many years of patient work and relationship building invested by the relevant industries to nurture these markets and develop necessary market protocols.

Producers are now much more focused on producing what the market expects and work hard to ensure they meet all protocols.

Properties that have the infrastructure to produce and correctly handle commodities such as citrus, avocados, table grapes and vegetables are consequently in demand.

A rockmelon producer revealed to the valuation firm that the past season has been their best ever, despite the listeria issue that devastated the industry in the previous season.

"The producer attributed their improved fortunes to the fact that they had upgraded their packing shed facility in 2017, which ensured they remained a preferred supplier to supermarkets," the report noted.

Similarly, properties which have had regular re-planting or irrigation infrastructure upgrades have also enjoyed stronger demand than properties that have ageing infrastructure.

There have been two medium scale wine grape vineyard sales in the region during the past month.

Analysis of these sales by the firm suggested that values have held up, notwithstanding the significantly higher cost of leasing irrigation water.

"It appears that vendors of horticultural properties are not under pressure to sell and that while the reduced sales activity suggests demand may have eased, the market appears to remain relatively balanced," HTW concluded.

 

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Mildura Herron Todd White

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