CATTLE and sheep stations are among the big ticket items being sought in the surging rural property market. Listings are scarce, adding to price rises.
Two properties – Coniston Station via Alice Springs, NT, and Eaglehawk Station via Broken Hill, NSW – both to be auctioned in July, are attracting strong interest.
Early this week, after just seven days on the market, Elders had sent out 50 memorandums of information for 28,240-hectare Eaglehawk Station and had about 20 inspections booked in.
Coniston Station, being marketed through Landmark Harcourts, is being offered walk-in, walk-out with 5200 Droughtmaster and Droughtmaster-cross cattle.
The 2170-square kilometre property will be auctioned on July 26.
CBRE Agribusiness director Phil Schell said there was exceptional interest in grazing properties with strong market returns.
“Demand should continue to be there with wool prices firm in the past 12 to 18 months, mutton prices more than 500 cents a kilogram and lamb well over 600c/kg,” he said.
“If these markets remain firm and even still improve in the next six months, there is really nothing holding the property market back.
“Seasonal conditions in 2017 might be an issue but pastoral properties are not impacted by winter rains as much as inside country.”
Mr Schell said the recent sale of Martins Well Station for $5.975 million showed the desire by buyers to acquire well-maintained and well-managed assets.
“Mount Lyndhurst Station sold a year or so ago and made $220 to $230 a dry sheep equivalent as a going concern, but it was not the property that Martins Well Station is with its infrastructure so $380-odd a DSE shows the lift in the market,” he said.
Mr Schell said offering stations on a walk-in, walk-out basis was critical.
“You must be able to offer livestock and plant to attract buyers,” he said.
“If a neighbour happens to buy and they chose not to take the stock, plant and equipment, the vendors can always have a dispersal and clearing sale, but as a station buyer – where do you find a three or four thousand breeder ewes?”
And while pastoral properties were well sought after for their scale, he said potential buyers with $5m to $20m to spend were also seeking land in higher rainfall areas.
“The DSE value in south-eastern SA is between $400 to $500 in the more reliable regions which have got good improvements,” he said.
Elders rural sales mid SE of SA Grant Schubert said the “stars had aligned” for the rural property market with low interest rates, buoyant commodity prices and limited listings.
“It is the strongest market in 30 to 50 years with the rural sector showing strong signs of capital growth and attracting plenty of city investors,” he said.
“There are also sons and daughters raised on farms which have been off-farm somewhere else but are looking to return now there is money in agriculture.
“This has given the parents a second wind and they are looking to expand.”
In the past six months, Elders nationally has sold $553m in farmland – significantly more than the previous year.
Mr Schubert said record prices may entice some sellers, but encouraged them to “go to market” to realise new market levels.
“There are potential vendors not quite ready to sell, who are considering exiting while stock prices are exceptional,” he said.
“It would give them a double high.”
