Pastoral market quiet, yet holding strong

Pastoral market quiet, yet holding strong

Property
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Dry conditions across the State's pastoral region have slowed the property market, but demand has remained quite strong, according to real estate agents.

DRY conditions across the State's pastoral region have slowed the property market, but demand has remained quite strong, according to real estate agents.

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While interest from buyers has been strong, it appears the dry season might have prompted them to pause from purchasing until more rainfall comes.

Ray White Rural WA director Simon Wilding said he has seen resilience in the market given the parched circumstances many areas have faced.

"We have had a good year (in 2019) with a fairly good run of selling properties and I think the strength is still very much in the market - there is still a lot of inquiry and interest in pastoral stations," Mr Wilding said.

"The bigger properties certainly have a corporate influence and the smaller properties attract interest from all sorts of buyers from different walks of life - most of the time they have a rural background but sometimes they haven't and they also look at the lifestyle side of things as well, particularly with smaller properties."

Mr Wilding said interest in pastoral leases had been throughout the State, regardless of whether the region was experiencing a dry period.

"There are areas that are dry, from south of Newman right through to Meekatharra and north of Sandstone, but I am finding my inquiry hasn't dropped off at all," he said.

"We have had inspections just recently in that drought country, everyone knows it is dry but it hasn't put people off.

"They know it will rain again sometime and they will buy something knowing that one day it's going to rain."

Despite the pastoral region enduring widespread dry conditions for quite some time, the property market may have quietened a little but agents have reassured demand is still present, with many buyers waiting in anticipation of rain.

Despite the pastoral region enduring widespread dry conditions for quite some time, the property market may have quietened a little but agents have reassured demand is still present, with many buyers waiting in anticipation of rain.

While buyers in the pastoral market have been cautious about the dry conditions, Landmark Harcourts WA sales and pastoral manager Terry Norrish said there were still various factors that could improve the market in the near future.

"The dry conditions are something that pastoralists live with from day-to-day, but the current extended dry period has had a marked effect on the numbers that they have been able to carry and the greatest issue is the lack of income from not being able to run their weaners through," he said.

"There are many positives that can influence the market going forward, particularly with the lack of numbers and we would like to think that there is plenty of upside to the current prices.

"On the contrary to this, the current dry conditions are having a marked effect on the mindset of potential buyers and I feel there is a wait-and-see approach to the next wave of pastoral purchasers.

"If we are lucky enough to have average-to-significant rains throughout, I feel that there will be some good enquiry taking place."

While concern surrounding climate change tends to be on the mind of many farmers and pastoralists, Mr Norrish believed it was not a major factor influencing their decision to purchase pastoral land.

"The major factors that influence purchasers are the productivity factors which centre around the price of livestock," he said.

"With current values off the highs of two years ago and some positives around the corner in terms of lack of numbers creating potential higher prices, we could see that enquiry increase."

Uncertainty within the live export industry has likely prompted many pastoralists to purchase land in the agricultural region.

"The uncertainty around live export is also in the back of everyone's mind but pastoralists have lived with this for quite a while now and many have made the move to purchase farmland to the south which gives them further options to fatten and market their cattle," he said.

"By purchasing southern property, this has also given much flexibility and gives purchasers some confidence that there is diversification to a pastoral business."

Elders pastoral real estate specialist Greg Smith said the quiet market was likely due to many pastoralists, particularly those in the Southern Rangelands and Goldfields, waiting until more information was available on carbon farming, which was only released last month.

"There is anticipation among pastoralists as to whether they can get some carbon credits, so they are thinking their properties are worth a certain amount being a sheep station, however then they can't run sheep because of wild dogs, but if they can get carbon credits for running limited stock, then that has to add value to their properties," Mr Smith said.

He said the quiet market was mainly due to the dry conditions, however there has been demand for de-stocked land.

"Because light-weight heifers are hard to sell at the moment and if sold, they aren't worth much, pastoralists with a lot of cattle are looking at their options, like a place to run 1000 or so heifers on," he said.

"There's a lot of confidence that when it does rain, female cattle are going to be very hard to get hold of."

Mr Smith said a lot of demand has been Eastern States-driven, with mostly individual buyers and a few corporates around the scene.

"They are interested because they're thinking they can buy more for their money over here, because with the droughts they have been hit with over there in the past few years, they have watched the weather here and thought it could be worth coming over to the west."

Stocking capacity and water availability are the main features buyers have been looking for, with corporates seeking to be able to run a critical mass of stock numbers and smaller buyers after value for money.

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