Southern NSW Markets Flat After Bull Market

Sub Levels

Pine groves in Sebastopol, on the southwestern slopes of New South Wales, were sold privately in September 2020, setting a district record for $11,856 per hectare.Photo: Miller and James, Temora

The 2022 anomaly, combined with rising interest rates and higher production costs, is impacting sales of agricultural properties in southern New South Wales.

Heron Todd White Appraiser, New South Wales, Australian Capital Territory Andrew Guernsey I noticed a slowdown in demand, especially in the southwestern croplands.

“Quality property remains in demand and well-developed turnkey holdings are trading well across all commodities,” Guernsey said.

“But today, instead of five or six companies, there may be two or three potential buyers competing.”

Guernsey said rising interest rates are now having a big impact on buying decisions.

“Farmers are in no rush to buy another farm as they are focused on planting fields with this year’s crop, and farmers who may have recently made their 30-year purchases are now looking to consolidate. There is.”

Guernsey said rising interest rates are having an impact.

“I recently spoke with a grower who said that in addition to a normal 2022 harvest and receipt of tax bills from the previous year, interest bills increased from $20,000 to $60,000 a month in 12 months. bottom.”

Mr Guernsey said the impact of recent rainfall on crops has also impacted cash flow, especially in areas west of Wagga Wagga with less than 500mm of rainfall.

“The dryland cropping segment appears to be entering a consolidation phase following the 2022 wet season harvest, high crop feedstock prices, softening grain and oilseed prices, and rising machinery costs.”

“While some properties are being auctioned, others still hold interest rates, 10-10% higher per hectare than achieved in early to mid-2022, when land prices were at once-in-a-generation levels. Sold at 15 percent lower levels’ profit. “

values ​​become easier

Over the past two years, properties in grain-growing areas within 40 kilometers west and north of Wagah have often fetched between $11,115 and $12,350 per hectare, Guernsey said.

“Several recent sales appear to have brought their prices down to near $4000 per AC ($9880 per hectare). This is especially noticeable when there is a

Mr. Guernsey said he is selective with his buyers.

“Buyers now have tight control over potential acquisitions, especially those that require upfront spending to restore productivity, such as weed control, liming, and fencing line reconstruction. It is a potential property.”

Guernsey believes property prices have plateaued.

“In the past two years, real estate prices have risen to levels typically seen in a decade. That seems to slow down demand.”

Guernsey reports that southern New South Wales has had a great start to the season.

“The area has had three consecutive fall holidays, and the rain has stopped just in time, all of which are good indicators for crops to take root. Not an ideal time to sell a property.” was.”

Guernsey said some large southern producers looking to buy the country are eyeing traditional planting areas in northern New South Wales.

“This area has not experienced land growth like the South and is considered more valuable because of the greater opportunities and scale of summer plantings.”

Traditionally, planting operations around areas such as Gunnedah and Narrabri have traded at price levels similar to those on the southwestern slopes, typically around $9,880 to $11,115 per hectare.

Guernsey said there has been a dramatic rise in land prices in the south over the past two years, with land prices nearly doubling, but no similar rise in the north.

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