Dairy, vegetables lift land prices

Dairy, vegetables lift land prices


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Andrew Newton, Alex Scott & Co Leongatha, said more farms have sold in the past three months than in the previous three years and demand is driven largely by dairy prices.

Andrew Newton, Alex Scott & Co Leongatha, said more farms have sold in the past three months than in the previous three years and demand is driven largely by dairy prices.

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LAND prices throughout Gippsland seem to be driven by interest in the dairy and vegetable industry.

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LAND prices throughout Gippsland seem to be driven by interest in the dairy and vegetable industry.

Gippsland has five sub-regions and covers 17.5 per cent of Victoria, or 41,556 km2; with a mixture of high and low rainfall areas, interspersed by two significant mountain ranges.

Good infrastructure and land topography makes a difference to land values, according to real estate agents across the region.

As reported previously Stock & Land, investment in dairy properties has seen prices rise to $9500/acre ($23,750/hectare) in the heavily irrigated Macalister Irrigation District.

In East Gippsland, growth in vegetable farms has seen land exchange hands at unprecedented $12,000/acre.

In South Gippsland, where irrigation is dependent on rainfall, the same type of property achieves $7000/acre and around Orbost irrigated dairy properties sell for up to $8000/acre.

Alex Scott & Co Leongatha rural property manager, Andrew Newton, said there had been significant movement in properties in the past three months and he believed it was driven by dairy prices.

"We've had more properties move in the past three months than the previous three years," Mr Newton said.

"Milk prices have generated confidence in the dairy industry, there's confidence in the beef industry and low interest rates have attracted a number of new farmers."

"The farms are changing hands because the older generation – baby boomers – want to retire and people in their mid-30s and 40s are coming back to farming," Mr Newton said.

"They are the new generation of dairy and beef farmers.

"It seems the natural progression, particularly among new buyers."

Beef farms of 40-80 hectares, with houses and infrastructure, are selling for $5500-$6000/acre; dairy farms with good infrastructure and 121-162ha for $6500-$7000/acre.

The soil types are very mixed, with heavy grey soil in the Korumburra and Strzelecki districts, volcanic red soils in Thorpdale and Warragul districts and sandy loam along the coast.

"Many of the people buying dairy farms already have a herd, because they've been share-farming, so they just want a farm with buildings," Mr Newton said.

"South Gippsland is attractive because it's got reliable rainfall and it's consistent through the year.

"It's just as well, because most of the dairy farms rely on farm water storage and rainfall, not irrigation.

"Irrigation farms east of Yarram are mainly used for cropping and dairy farms."

In contrast, from Leongatha South to Thorpdale and around Warragul, vegetable growing has pushed land prices, with volcanic red soils, up to and beyond $10,000/acre.

"The price per acre variances depend on the topography, infrastructure and percentage of grazing land on the property," Mr Newton said.

It is a similar story in East Gippsland, where Bill Wyndham & Co rural property agent, Michael Clark, said properties were tightly held within families.

"We've not had a lot of enquiries, but having said that if the price offered is high enough, land does change hands," Mr Clark said.

The vegetable industry is driving prices, with growers buying irrigated dairy farms for up to $8000/acre around Stratford and $10,000-$12,000/acre in the Lindenow Valley.

"Mostly, East Gippsland broadacre sells for $1500/acre, but well improved dryland sells for $2000/acre and river country around Orbost for $8000/acre," Mr Clark said.

"In the high country, the good stuff sells for $1200-$1400/acre.

"You can't tag East Gippsland with a specific price."

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