A STRONG 2018 for rural real estate was expected in most areas of the State as a run of a few good seasons and solid commodity prices drove demand and confidence throughout the sector.
Similar to 2017, properties in the Great Southern appeared to be the most sought after and buyers were willing to pay top dollar to secure a quality piece of farmland.
Perhaps the biggest story to break in WA rural real estate was when the ‘grain king’, John Nicoletti stunned the industry by putting his entire farmland portfolio up for sale in May.
Mr Nicoletti hoped to fetch between $75 million and $85m for the 203,000 hectare aggregation.
The offering comprised 157,000ha of arable country and 95,000ha was leasehold, with properties spread across Merredin, Westonia, Bullfinch, Mukinbudin, Southern Cross and Mullewa.
Also owning various machinery dealerships through his company Ag Implements, which he planned to turn his focus to, Mr Nicoletti said it was the right time to sell.
“It was always part of my plan (to sell) as I got older,” Mr Nicoletti said at the time.
There were 47 genuine enquiries from the expressions of interest campaign with only one from an Australian company.
The listing was marketed by Danny Thomas, CBRE, who declined to comment on the progress of the sale due to confidentiality.
The year kicked off with the Federal government announcing in February tighter policy restrictions for foreign investors seeking agricultural land and electricity assets.
It meant that land had to be ‘marketed widely’ to Australians for at least 30 days before being available to foreign buyers to prevent properties being put on the market without Australians realising.
Although these new rules appealed to local buyers, an impact could be felt on vendors not wishing to go to market as foreign buyers would miss out unless in special circumstances, meaning certain vendors might not get the best price.
Farm sales in WA started to heat up in September after the auction of Cwmavon, Gnowangerup, which set the bar high for the 2018 spring selling season.
Marketed and auctioned by Elders real estate specialist Jeff Douglas, the premium property sold for $7.65m – a figure that exceeded both Mr Douglas and Elders Real Estate sales executive – WA Rural, Jim Sangalli’s expectations, as well as the vendors Michael and Sue Lance.
The 1672.4ha mixed farming property was bought by Broomehill farmers Peter and Michelle Dewar.
Soon to follow was the auction of the 1521ha Kilburne, Broomehill West, also a mixed farming property which was handled by David Jannings and auctioned by Terry Norrish, both from Landmark Harcourts.
The hammer went down at $6.17m to Esperance-based farmers, the Tucker family, who were represented by Michael Batchelor, Ray White Rural WA, which resulted in the vendors, David Kinsey and Lyn O’Brien being very pleased with the sale result.
Yladgee, Gnowangerup, comprising 1985.6ha also fetched a top price, selling for $7.4m and marketed by Michael Moore, Landmark Harcourts.
As the year drew to a close, mixed farming properties in high rainfall areas seemed to be the highest in demand with two properties in the Great Southern being standouts.
Two listings by Landmark Harcourts currently on the market include the 4528ha aggregation of Pillinwaberup and Old Mobrup and Girraween around the Kojonup area and Hartville Downs at Frankland River.
Rural real estate agencies reported strong confidence in the WA market which was supported by good growing conditions and commodity prices.
Landmark Harcourts region corporate and business development manager – West, Glenn McTaggart reported a similar selling season to 2017 in terms of turnover and commissions.
While demand remained constant throughout the season across WA, Mr McTaggart said there had been a distinct lack of larger properties for sale in areas with more than 350 millimetres of rainfall.
“The spring selling season has seen a strong demand for all properties with Landmark Harcourts having good numbers sold in the spring which are to settle in the first quarter of 2019,” Mr McTaggart said.
“While listings have appeared tight during the season, the major difference is that properties have sold quicker with good demand in most areas.
“One interesting aspect of 2018 is that many properties in the eastern Wheatbelt that have been on the market for a few years have nearly all sold which is encouraging and allows those farmers to move on with their lives.”
Elders Real Estate sales executive – WA Rural Jim Sangalli said land values were generally determined by the rainfall but properties in lower rainfall areas had increased in value.
“Forever demand has been proportionate to the rainfall of an area which hasn’t changed,” Mr Sangalli said.
“But this year has seen areas of lower rainfall sales prices challenging their area dollar per arable acre records.
“Demand has come not only from neighbours, corporates and overseas but also producers looking to spread their risk and while keeping their existing property, they look to purchase in different shires with different risk and logistics.”
As well as having a series of successful auctions, he said a particular highlight for 2018 was winning the best exhibition at the Dowerin GWN 7 Machinery Field Days.
For 2019, Mr Sangalli forecast another strong year for rural real estate with properties likely to sell rather quickly, as well as a high clearance and more auctions.
“For some existing farmers, the off-farm investment opportunities in Perth are looking very attractive, particularly the residential and commercial market after Perth’s real estate downturn,” he said.
Ray White Rural WA director Robert Chittick said the first six months of the year for the company were excellent with sales throughout the Wheatbelt, but a lack of properties for sale and good growing conditions made for a quieter market for the latter half of the year.
“It is fair to say that sales of broadacre properties quietened off in the second half of the year but we had a number of sales outside of the traditional grain growing areas such as station country and coastal areas,” Mr Chittick said.
“Properties that were priced right and in good condition were very sought after.”
Mr Chittick said demand was especially strong in the Great Southern and properties in the central Wheatbelt and towards Geraldton listings were also tightly held.
According to Mr Chittick, farmland prices and confidence among buyers and sellers had not been affected by the uncertainty in the live export industry.
He also said a highlight for the company was coming sixth in the Ray White Rural national awards in rural sales across Ray White businesses in Australia.
CBRE agribusiness agent Danny Thomas expected to see high activity across the broader WA Wheatbelt market for 2019 “given the excellent 2018 season – relative to other parts of Australia – and the weight of institutional capital seeking a position of scale in the market”.
Mr Thomas anticipated the national market would remain relatively buoyant for the first and second quarter, however there may be lower demand across the third and fourth quarters in the farmer-to-farmer market.
He said this ease in demand would likely be a result of the drought in the Eastern States and a tightening on credit/lending, creating barriers for local farmers to make long-term purchases.
“At this stage I expect institutional investment to remain strong throughout 2019 especially if the Australian dollar remains at about US$0.70, which will continue to attract foreign investors.”
Taking a more national look at notable events in the agricultural real estate market, relatively high traffic of buying and selling among the corporate sector also indicated a strong market for 2018.
At the start of March, major pastoral business Consolidated Pastoral Company (CPC) announced it was up for sale.
Bought by United Kingdom private firm Terra Firm in 2009, the company advertised its 16 northern Australian and Indonesian cattle properties for sale which span 5.5 million hectares.
In October the first of CPC’s properties was confirmed sold as the Harris family bought the 850,000ha Nockatunga station and it’s rumoured they paid as much as $50m.
If CPC’s portfolio was to sell for the total speculated figure of $1 billion, a new record would be set for Australia’s cattle industry.
While Harmony Agriculture Food & Co invested in a major feedlot facility at Dimboola, Victoria, it also sold its 5908ha historic grazing property Mt Fyans at Dundonnell, Victoria, with the intention to focus on Wagyu and grainfed branded beef programs.
One of the country’s largest integrated beef and cropping companies, Ceres Agriculture, was listed for sale in October with a price tag of about $200m.
Prior to hitting the market through CBRE, the business had quietly been offered off-market for about a year by Colliers International.