Corporates underpin season

22 Apr, 2013 02:00 AM
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AS the WA rural real estate selling season winds up, some agents have found that while low rainfall areas were experiencing hardship, the high and medium rainfall areas were holding their own mainly due to injections of Australian and overseas corporate money.

According to Landmark Harcourts WA manager Glenn McTaggart they had quite a few good sales with some good leases also going through.

"We had a pretty good run," Mr McTaggart said.

"The Eastern Wheatbelt is suffering from a sales point of view and the majority of our sales have been in the Northern Wheatbelt and the medium to high rainfall areas, pretty much across the board in those areas."

"Land values have held up from the previous season but we don't have any sales out in the Eastern Wheatbelt to know where the market is."

Mr McTaggart said they had some smaller neighbour to neighbour sales, which did not give a true reflection of the market.

"Activity is limited out in those eastern areas," he said.

Mr McTaggart said most sales were by Australian and overseas corporate buyers.

He said the selling season was now starting in December as opposed to several months earlier because banks wanted to see how crops fared before lending money.

"Certainly the main selling season is running through from December to March," Mr McTaggart said.

VNW Independent director Simon Wilding said the industry was quiet with finance companies, including banks, tightening up their lending criteria as they focused on farm equity.

"It was easy to borrow money a few years ago but not anymore," Mr Wilding said.

"You have to qualify yourself very well before they will lend you money."

Mr Wilding said most farmers were carrying reasonable debt and would not be able to expand even if they wanted to.

He said farm advisers were also telling their farmers to sit tight until things improved.

Mr Wilding said values had dropped about 30 per cent from the highs of three or four years ago and in some areas in the Wheatbelt, values could have dropped by 50pc.

But he said the market had not changed much from last year.

"It is tough and we have been fortunate to have had quite a lot of corporate activity that has underpinned the market in certain areas," he said.

"If you are talking about the farmer to farmer market, that is quiet, there is the odd one going on.

"Unfortunately there are forced sales that don't help the market."

Mr Wilding said there was still reasonably good offshore and local corporate activity.

He said VNW sold prime York land and land at Dandaragan to the Malaysians with the two York properties selling for $21 million and the Dandaragan property also "selling well".

They also had sales in the Esperance region of $40 million to $50m.

"If we were to compare our sales over the last 2-3 years, we are still going strong because we have some fabulous listings and we have had properties that have been sought after by locals and offshore interests," Mr Wilding said.

"As a result we have had strong sales but it is a lot of work."

Mr Wilding said the lifestyle market was moving but at substantially lower levels, a good 30 per cent down on three or four years ago, similar to the market overall.

"We are starting to see sales in that small 20-80ha blocks we do along the coastal plain and inland a bit," he said.

Mr Wilding said the firm had also just sold a pastoral station in the Mt Tom Price area for a "reasonable price" to other pastoralists.

The sale is yet to be finalised.

Mr Wilding said the sale was despite the negative impact of the Federal Government decision in 2011 to suddenly halt live cattle exports and Indonesia subsequently halving Australian live export cattle import quotas.

Mr Wilding said confidence had been knocked out of the trade, particularly in the Kimberley, and that they had to regain that confidence.

VNW will soon list two stations in the upper Murchison.

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READER COMMENTS

Consolidated
22/04/2013 7:40:33 AM, on Farm Weekly

Anyone buying farmland at the moment is in denial. Denial that the world's debt bomb won't affect them. Wheat is headed back to $220/t in Kwinana so chances are you will find much more land on the market in 2014. The family farm is up for sale. Plenty of bargain coming to the 2nd hand machinery market too. You'll need significant equity to weather the unfolding mess.

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