LARGE rural properties in South Gippsland were the most expensive in Victoria last year, according to Landmark Harcourts' quarterly benchmark report.
Almost $49 million was spent on larger blocks of 40-hectares or more in 2013, as the south-eastern area eclipsed State-wide land value averages by 60 per cent, reaching $10,382/ha.
Moyne ($42m), Southern Grampians ($42m) and Corangamite ($41m) shires were the next highest grossing regions in the above 40ha section, which totalled about 1500 sales for the year.
Growth rates for rural land in Victoria was steady at 4.5pc, with smaller blocks between four and 40ha improving in value by just 2.2pc since 2012.
Landmark Harcourts' franchise manager Victoria Jason Hellyer said 12 months of tough beef prices may have contributed to more sales in South Gippsland.
He said in 2011-12 Gippsland agents were struggling to make sales because vendors' price expectations were impractical.
"Prices have come back and sellers have become more realistic and they've sort of met in the middle," said Mr Hellyer, who felt the bulk of the sales came from properties that had occupied the market for a while.
Elders' South Gippsland agent Don Olden said commodity prices were irrelevant, but an influx of "city money" may have helped lift the market.
"Once house prices in Melbourne pick up, our market seems to lift," he said.
Average block sizes sold in South Gippsland in 2013 were 85.2ha, according to the report, which Mr Olden said came from neighbourhood aggregations and larger sales.
Land valuer Sam Paton said statistically investment was more likely in a region where the sum of money is relatively low (South Gippsland av $887,672) and where the population density was highest.
"For example buying a $1.5m dairy is going to be more economical than a $6m grazing block in the Western District," he said.
The report also shows rural properties from four to 40ha across the State had 2551 sales – about 1000 more than larger parcels.
Mr Hellyer said an aggregating trend was emerging across Victoria, with larger farms acquiring smaller blocks of land.
"If you have about 80ha it is getting more difficult to make a dollar so they're either selling to their neighbour or a conglomerate," he said.
Elders' East Gippsland real estate agent Mark Norling said about 50pc of his 2013 sales came from lifestyle blocks.
Mr Norling, who estimated he sold about $15m of East Gippsland's $21m in sales more than 40ha last year, said flat beef prices hadn't influenced sales in his area as confidence in all commodities was turning.
"Everyone's remotely buoyant, however prices aren't reflecting that but it will turn," he said.
Rural Finance's Victorian Farmland Values Index showed grazing land in Gippsland had experienced dramatic increases in value since the 1990s, with East Gippsland jumping 199pc in 24 years.
And while Mr Hellyer suggested Gippsland always attracted a price premium, 2013 was the year some farmers saw "an opportunity to offload".
Prices in Horsham ($1595/ha) and the West Wimmera ($2167/ha) were reflective of an undervalued market, Landmark Harcourts' Horsham agent Mark Clyne said.
He said while prices were relatively low in 2013, croppers couldn't take advantage because they "had no money".
With banks still tough on their lending criteria, Mr Clyne said a few years of consistent wool prices or considerable foreign interest in north-western properties would "flush out people who are selling".
My Clyne expected southern grazing country near Cherrypool and Balmoral to surge in value this year, after dwindling at between $2880/ha and $3120/ha.
