DEMAND for farmland within the Geraldton and Mid West region has remained strong throughout the spring/summer selling period, according to rural real estate agents.
In the past few years, the region has seen considerable growth in land values, driven by a healthy market with limited supply, coupled with high demand.
Despite a drier-than-normal season in 2019, agents claimed there is still strong demand for quality farmland of various sizes and enterprises and at different locations.
Geraldton Region Farm Sales manager and licensee Max Correy said the dry conditions had had little impact on the market.
"I think the lack of good listings is the main factor governing the market, rather than a drier-than-normal season for 2019," Mr Correy said.
"I think probably potential sellers have thought their farm doesn't look appealing to sell with below-average crops and not much feed etc, so they have been hesitant to display their farms and might plan to wait until the next spring selling period with the hope of getting a better year.
"So there is not as much land on the market as there normally is.
"I think buyers are ready to purchase if the right property comes on the market, but if it doesn't they don't mind waiting until the next year."
The current market environment of supply outstripping demand has been the case for at least two years, which Mr Correy said has made some buyers even more keen to purchase farmland when it becomes available.
"If the property is at a good location for buyers, they will pay well above 2017 prices or even early 2018 prices," he said.
"Buyers are thinking if the right property becomes available that suits them, especially for location, they will buy it, because there is not as much land coming on the market now.
"The rural land game has consolidated a lot in the past four or five years, so we are not seeing the number of properties coming on now that used to come on.
"So buyers are thinking they have two choices: if they want it they better go after it or they miss out - and I think a few people might be kicking themselves thinking that they would just wait for the next one, but that hasn't come."
Geraldton-based Landmark Harcourts rural real estate specialist Brad King said fewer listings makes for more competition when premium properties go on the market.
"There is demand for quality properties and there's not a lot of properties for sale, therefore good properties that come on the market generally create a lot of interest," Mr King said.
He said demand has been coming from farming families and individuals and corporate buyers.
Family and individual producers have been seeking properties between 2000 hectares and 5000ha, while corporate farmers tend to buy a minimum of 8000ha to 10,000ha, which Mr King said are more difficult properties to come by.
Both agents said there was more demand for cropping land, as opposed to grazing or mixed enterprise, with Mr King estimating a 60:40 ratio in the marketplace.
In terms of buyer demographics, most transactions have been from farmer to farmer, with many purchasing land to spread their risk via location with higher rainfall.
Such a mindset has led to a concentration of activity around the Irwin area, where annual rainfall is 400 millimetres or more.
Mr King said most of the demand from farming families or individuals has been locally driven, however there are buyers from the eastern and south eastern Wheatbelt.
He said pastoralists have also been in the marketplace, in search of land for backgrounding stock which they might finish off on the property or in a feedlot, or breed the stock before taking them back to the pastoral region.
"A fair bit of interest from pastoralists has been around Badgingarra, Dandaragan and further south into Regans Ford, which is just starting to push its way into our region of the south western corner of the Mid West, such as at Eneabba," Mr King said.
Corporate activity has remained strong - particularly in the higher rainfall areas such as Irwin - for grain growing pursuits.
The majority of corporate buyers have been Australian with overseas financial backing (which would still need to gain Foreign Investment Review Board approval).
While demand for land at lower rainfall locations has been less than higher rainfall areas, Mr Correy referred to Planfarm Benchmarks for 2018-19 when referring to the viability of low rainfall areas.
The research identified lower rainfall areas in the Mid West and eastern Wheatbelt as generating the best return on capital in the State at 15.1 per cent, compared to high rainfall areas in some parts of the Wheatbelt and Great Southern with 9.3pc and 6.5pc, respectively.
This suggested that while lower rainfall regions carry more risk, providing the farm is operated efficiently, land in these regions can be purchased for a much lower price and yet be very profitable.
If growers have an average to above-average season this year, Mr Correy expected the excellent growth in land values, that the region had experienced in recent years, to continue.
"I don't think the market will slip back on 2018 (which saw a record-breaking season and high land price growth) unless we have a chronic drought, but if we have just an average season this year, I don't think the market will come back at all," he said.
Mr King gave a slightly more conservative forecast for 2020, with the outlook that land values might remain stable.
"I can't imagine land values would increase at the same rate," he said.
"I think we have probably found our price level at the moment.
"For there to be more growth after previous seasons, I wouldn't expect that to occur, especially given 2019 was a below-average season.
"I think values will remain pretty stable, I couldn't imagine there be any corrections in values yet, maybe a little bit with some of the high end market where there might be a cooling off, but there has been some pretty big prices paid.
"The status quo has remained, even though some of the pressure has come out of the market, it's always been the case that even in poorer seasons that better properties in highly sought-after regions always sell."