ALL eyes are on the Eastern States rural property market, as despite a devastating drought affecting much of the agricultural region in New South Wales and southern Queensland, land values haven't been affected a great deal.
In fact, according to NAB's most recent Agribusiness Banker Survey, land prices in the east have increased slightly or have at the least remained steady.
Although WA has had some of the highest growth in land values in the country, perhaps the resilience of the Eastern States market could be an indicator on how the WA market would be affected if it was to endure an especially tough season or even drought.
But NAB regional customer executive for WA Jeff Pontifex said factors such as strong confidence, good commodity prices, low interest rates and a low dollar have also contributed to the resilience of the Eastern States property market.
Weather was the biggest factor to impact banker confidence for both national and WA industries.
"We have been watching the Eastern States with interest - I think our (land price growth is) a bit up on the Eastern States, based on the confidence survey from our bankers," Mr Pontifex said.
"Interestingly, in the drought areas, we did see a little dip but that may appear to be holding for the time being, a flat levels at least."
He said with WA benefitting from some good seasons in recent years, with 2018 being exceptionally strong, growers have more capital backing which has enabled them to build some buffers into their equity.
The survey reported that nationally about 60 per cent of bankers expected national land prices to increase in the next year, with growth of 0-5pc being the most common response.
However, it appeared not all were optimistic about land price growth as about 20pc expected land values to decline in the next year and 23 per cent anticipate not change.
NAB regional agribusiness customer executive Neil Finlay provided a national overview of the survey and said there "hasn't been a significant drop in land prices" in the Eastern States property market.
"Land values in the east have been pretty resilient, there hasn't been a lot of movement in them which is normally a great situation - local buyers tend to drop off a little bit but that hasn't happened," Mr Finlay said.
"And in terms of price being the case, there's still been interest and there are still a number of properties being bought and sold."
The view from NAB bankers, who were questioned in the survey, is confidence in the WA agricultural industry is strong, despite falling significantly from the past two quarterly surveys, which was likely caused from coming off such a bumper 2019 season and a dry start.
"While the survey points to a dip in confidence compared to previous iterations of the survey, I would say the figures reflect a closer to normal level in the market after the tremendous highs of the season," Mr Pontifex said.
"While we won't see a repeat this season of such results, it doesn't mean there isn't cause for confidence in our agriculture sector's performance, in fact, places like Esperance and the Great Southern are real pockets of success."
He said the grain industry has been a major driver for WA's confidence, which is the third highest nationally, after South Australia and Victoria, and that the projected continued demand for grain in the east would give growers optimism.
Mr Pontifex said confidence in grains had softened due to weather conditions and was likely to achieve an average year.
He said strong lamb and mutton prices has lead to excellent confidence and good pricing with solid demand for WA's product, and confidence in beef was also positive.
Mr Finlay said that the country's confidence among bankers had been largely affected by the drought in the east and within sectors with high input costs, such as dairy and in some cases, water costs and energy costs.
The survey found capital expenditure to be just positive (+1) on a national basis, up from -26 at the end of 2018, whereas WA was at +30 with the next three months forecast at about +40.
"I wouldn't say people are confident about capital expenditure but it's an improvement from where it was eight or nine months ago,'' Mr Finlay said.
"And States like South Australian and Victoria have mainly driven that, while WA has remained at relatively similar levels.
"But South Australia and Victoria have had some reasonable seasons which have helped."