Posted by: Charles Stewart Western Victoria

Market Report Autumn 2024

14th March, 2024

RURAL PROPERTY MARKET STABILISES AFTER SPRING VOLATILITY

AUTUMN RURAL PROPERTY PREVIEW

The rural property market in Western Victoria appears to have stabilised after a volatile traditional spring selling period of 2023. The market is underpinned by three major factors – commodity prices, economic conditions (particularly interest rates) and seasonal conditions.

The well-publicised threat of the El Nino weather phenomenon during last spring destabilised both commodity prices and the rural property market, and whilst this largely didn’t occur, currently the south west is waiting in anticipation of an early break with little or no summer rain recorded in January and particularly February.

The shining light in the commodity sector is dairying, with farm gate milk prices remaining at near record levels. National production levels appear to be slightly increasing, albeit at historically 30 year low levels. This is translating to cautious and well measured buyer enquiry for dairy farms across the south west, with a couple of localised exceptions. The greater Nullawarre district has witnessed a flurry of activity due to land being offered to the marketplace in some cases for the first time in generations, and agroforestry acquisitions are still ongoing in the Heytesbury. Whilst the spring of 2021 appeared to be the top of the market in grazing and cropping land price sectors and declined ever since, one must remember that dairy farm prices have increased during that period by 20 to 30% across the board and in some areas more.

Grazing land prices in the early part of the New Year appear to have stabilised since the volatile spring selling period. Whilst some properties sold at strong levels due to local demand (particularly neighbours) and properties with superior improvements, others sold at reduced prices (perhaps 10 – 25% year on year), whilst the number of days on market increased significantly. The threat of El Nino and the turbulent red meat market plus uncertain economic times created a “perfect storm” during last spring’s selling season. Largely at the commencement of the autumn selling season of 2024, this perfect storm has passed and property demand for grazing properties is more stable. Again buyers are well measured, prudent and price sensitive with their financiers adopting the same approach.

Cropping land did not witness the decline of their grazing counterparts, largely due to grain commodity prices and a favourable growing season, albeit an interrupted harvest due to rain. The forecast for the grain sector appears favourable, particularly barley with China importing up to 80% of Australia’s production since the lifting of tariffs. The demand for high rainfall cropping country in western Victoria appears strong, although price sensitivities due to interest rates and other financial constraints are effecting this market.

Whilst we are living in turbulent global times with wars in the Middle East and Ukraine, political instability in the US and China in recession, the world has got to eat! Australia’s ability to produce clean, green food is its cornerstone, and despite these turbulent times the future for agriculture and the rural property market in western Victoria appears sound.

– Nick Adamson (Branch Manager)

Should you be thinking of selling, now is the time to contact one of our Rural Real Estate Specialists for a no obligation discussion regarding your requirements.

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