Rural land going dirt cheap

07 Apr, 2011 09:12 AM

AUSTRALIAN farming land is fundamentally undervalued, local rural property consultant Philip Jarvis claims in The Wealth Report 2011.

Agricultural land price growth flattened in 2010, with dry land arable property with reliable rainfall gaining only 2 per cent during the year compared with 10 per cent annually in the years before, according to the report.

Price growth was hampered by the higher Australian dollar and rising interest rates.

Such farmland is now priced at an average of $US1600 to $1700 a hectare, The Australian Financial Review reports.

This compared with gains of 13 per cent for farmland in England, 6 per cent to 24 per cent growth in areas of Brazil and 10 per cent in parts of Argentina.

Knight Frank head of rural property research Andrew Shirley said buying farmland to address food security concerns was a key issue for countries experiencing rapid population growth, including countries such as China, India and South Korea as well as wealthy Gulf states.

The Australian Financial ReviewSource:
Date: Newest first | Oldest first


7/04/2011 9:29:29 AM

If changes to foreign investment rules make it more challenging for foreign people/companies to buy land then this will get worse or even lower land value.
7/04/2011 10:41:20 AM

What on earth has the percentage increase on last year got to do with anything. Farms are an investment. the only consideration is what is the return on investment. For Australian agriculture at the moment the return on investment is zero. Based on that equation Australian farmland is fundamentally overvalued at the moment.
John Niven
7/04/2011 11:38:11 AM

Has this idiot tried to buy a farm and make a profit
Bill Williams
8/04/2011 2:21:28 AM

Hey Blah Blah. Get ready for same pain pressing your now obsolete economic viewpoint. Have a look at what Dominique Strauss-Kahn (the MD of the IMF) said on monday of this week in his "eulogy" for economic rationalism. See: /no-debate-as-australia-hollows-o ut-20110407-1d57f.html
8/04/2011 3:25:49 AM

Dear Aussie freinds dont allow all the controlled NEWS captions to control your business of farming seen this all before,the best thing about farming is feeding the people even the politions that know lifes natural course air,water,food,clothing and shelter,we have survived this long and will prevail if we learn to stick togeather,in many ways we at times are our own enemy by allowing the leaches of this world to control all that we are, united farmers are a very stong food producing community with vast ability to adapt,if you see your life through the eyes of bankers ,pollies ect where gone.
8/04/2011 7:01:44 AM

Stock Journal why would you reproduce such a non sense piece of reporting from AFR. Clearly consultant Philip Jarvis doesnt know what he is talking about. And a total waste of my time reading it......
ME Again
8/04/2011 7:14:22 AM

Land prices will rise soon: commodity price rises are the lead time indicator of land price growth. If you can't make a good profit this year then I struggle to understand when the conditions will be more favourable. Discounting those few people who have actually been flooded out, almost all mainstream commodity prices are at or near record highs. That's a fact, and the smart, profitable farmers (as against the whingers) will soon convert their profits to land. The high commodity price also changes the return for other investors - local and overseas - and that pushes land prices.
8/04/2011 7:32:11 AM

Not sure where these guys got their data from but they sure don't live on the same planet as I do. Farm land in our region is absurdly overvalued and can't generate positive returns.
The Serf
8/04/2011 7:45:06 AM

In Argentina and Brazil land ownership includes mineral rights and you actually own the land, you dont here. The cost of production is also about 25% of the Australian costs; land ownership is also immured from planning and other environmental laws unless they are registered on the Deed; such laws are called “takings” and are subject to compensation, no such consideration exists in Australia. 80% of the rural land in Australia is owned by the “State” and the remaining 20% is in Freehold of Fee Simple but its property rights are far less than the accepted around the world. Investors Beware...
Ted O'Brien
8/04/2011 7:48:42 AM

Three factors drive land values. 1. Earning capacity. 2. The prospect for capital gain. 3. Available cash. Earning capacity has been severely depressed for 25 years now by our current conventional wisdom(?) on "free markets". Our "wise men" will not discover their error until everything has been lost. The question must be, how did they get so foolish?
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