AGRICULTURE and rural land prices have emerged as the shining light during the COVID-19 pandemic with prices and demand outstripping all expectations.
Those in the industry say the past three months have been busy and buyers are looking to shore up land holdings to make the most of good livestock prices and global demand for primary product.
Colliers International, director of transaction services, agribusiness, Angus Macleod is based in the Riverina and says there is a keen appetite for all rural land.
He is currently involved in selling two almond operations in the Murrumbidgee Irrigation Area.
One is at Griffith and another is located at Leeton, the holdings are being offered by two different vendors.
He confirmed a potential buyer was currently completing due diligence tasks in relation to the Griffith entity and expressions of interest on the Leeton farm close this week.
"It has certainly been an exciting time, and country (in this area) is performing well from a rainfall point of view," he said.
Mr Macleod said properties around Wallendbeen and Cootamundra have commanded prices of $6000 an acre and to the south at Holbrook there had been sales in the vicinity of $5000 an acre.
He said the demand for food and fibre meant people were keen to expand their portfolio.
Meanwhile, Mr Macleod's sentiments have been ratified by Rabobank's agricultural analyst Wes Lefroy.
Mr Lefroy said Australian agricultural land was expected to remain "largely unscathed" due primarily to overall farm profitability, a tight sales market and support from low interest rates and a weak Australian dollar.
"Farmer operating profit, in our view, is the primary driver of Australian land prices," he said.
"In particular, sustained periods of profitability provide farmers with the financial capacity to buy more land," he said.
"And despite the drought, that has gripped much of the east coast over the past three years, reported three-year average farm operating profits are at their highest point since at least 1990 in Western Australia, South Australia, Tasmania and Victoria," he said.
However, the 10-year average wasn't quite as rosy in NSW but land price trends and demand were still evident.
"For farmers with expansion intentions, many will have the capacity to buy land."
"We see the number of properties on the market staying at, or near, historical lows in 2020 for a number of reasons," he said.
"We expect there will only be a very small number of sales which are due to financial circumstances, with improved production supporting cash flow generation in drought-affected regions.
On top of this, Mr Lefroy said record-low borrowing costs have increased landholder's capacity to service existing debt and interest rates are set to remain historically low for at least the next three years.
He said the volatility and impact that the COVID-19 pandemic had caused in other asset classes had also highlighted the stable and counter-cyclical nature of agricultural land, reinforcing its attractiveness as an investment."
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