WITH the spotlight on the world's food supply more than we have ever seen in recent history due to COVID-19, the ripple effect has started to make its way into some areas within Western Australia's horticulture property market.
The southern areas have seen strong demand from buyers while the northern sector has been rather subdued, however horticulture-like properties at Kununurra are in demand for the production of other crops, such as fodder and cotton.
Out of the whole State, the Perth/Gingin region has seen the largest increase in activity, however it was the strongest horticulture market prior to the pandemic.
Water availability and quality on the property is the highest priority for buyers seeking horticultural land.
Property prices tend to be based on the plantable area and quantity and quality of the available water.
While factors such as power connection, location and proximity to towns or key destinations, infrastructure and soil are important, they are much further down buyers' criteria lists.
Agents across all the regions expected the horticulture /irrigated property market to either remain strong or see more growth in the next 12 months, as there is high demand from family farmers and corporate buyers - whether they are local, national and from overseas (or foreign backed).
South West:
Prior to COVID-19 making its way to the region, the South West horticulture property sector was performing well.
According to Elders Real Estate's Orest Luzny, Manjimup, the market has firmed in the past few months.
Mr Luzny said the main factor contributing to the strength was the high demand for properties being met with tight supply.
"The market has become slightly stronger because of the lack of listings and confidence is really strong from consumers due to good commodity prices," Mr Luzny said.
The majority of demand has come from local farming families for small or large-scale properties.
Corporate buyers are also in the mix, albeit to a lesser extent and for higher value, larger properties that offer scale.
In the past few years the South West has seen a surge in demand for properties suitable for avocado production.
This was supported in the State horticulture industry snapshot from the Department of Primary Industries and Regional Development, which wrote that out of all commodities, avocados had the biggest increase in tonnes or trees per grower over 10 years, at 12.6 per cent, compared to strawberries with 9.3pc, mandarins at 9.2pc, melons at 6.7pc and carrots with 2.9pc growth.
Properties that are suitable to grow other products, such as strawberries and truffles, are also sought after.
Mr Luzny said with quality horticulture properties being in particularly short supply, "if a good property was to come to the market, I would expect it could reach an unprecedented price".
"I believe the produce that comes from this region is excellent and the demand for properties will continue," he said.
"There are lots of opportunities for the astute investor, maybe not necessarily on such a large scale.
"The Manjimup/Pemberton region generates 21pc of Western Australia's irrigated agricultural production, at a value of more than $220 million annually.
"The availability and efficient use of water is critical to growth of the region and allowing it to remain the food bowl of the State.
"Both buyers and sellers have realised this in recent times, meaning the small amount of tightly held horticulture land has been snapped up quickly in recent years."
The South West region grows various fruits, vegetables and truffles.
North of Perth/Gingin:
The northern Perth Gateway region was already strong prior to COVID-19, but since the pandemic hit a few months ago it has been flourishing.
Adam Shields, Nutrien Harcourts WA, Gingin, said he has been "phenomenally busy" and 2020/21 would likely be his busiest year.
"Horticulture properties are in high demand, particularly if they have good water availability and are at a good location," Mr Shields said.
Demand in the region has been from WA and corporate buyers, including Eastern States' companies.
"Local enquiry has been coming from all over WA, with most families and companies already growing in the region or in a different area in the State," he said.
"Whereas Eastern States buyers have been drawn to the Gingin region for its more affordable land prices and there is lots of opportunity in the domestic marketplace, both State and national."
Mr Shields said that investors have gained interest in horticulture properties because of their high returns on leases, which at Gingin average about 7-8pc on a long-term (about 20 years) lease.
This has prompted many investors to adopt a 'buy and lease out' model.
It's a perfect scenario for the industry as Mr Shields also said there was very high demand to lease horticulture land.
The benefits of protected cropping have enabled many growers to justify the big cost of building the infrastructure for it, which he said was on the agenda for a lot of enterprises.
"Many people have been purchasing or leasing land with the intention to set it up for protected cropping, which is a lot more water efficient," Mr Shields said.
Horticulture properties vary widely in the north of Perth region, with smaller scale operations ranging from 10 hectares to 20ha and large-scale farms being about 100ha or more, which tend to be corporate farmers.
The north of Perth horticulture region predominantly grows fruits, vegetables, nuts and grapes.
Carnarvon:
Nutrien Harcourts WA's Yves Beagley services the Carnarvon region and the horticulture property market has been "relatively stagnant over the past 12-24 months, with interstate enquiry slowing down with the COVID-19 situation due to the State border closures".
While demand has been rather flat for the sector, Mr Beagley remained positive that people would soon begin to capitalise on the region.
"It won't be long before the value of the region is realised given it's water security, ideal growing conditions and relative isolation from biosecurity threats," Mr Beagley said.
Family farming enterprises make up the bulk of Carnarvon's horticulture enterprises, but Mr Beagley said larger growers from other regions have had eyes on the district.
"We have experienced a greater level of enquiry from larger growers from across Australia looking to diversify their holdings and growing seasons, however the area is largely smaller family enterprises," he said.
The dry subtropical climate makes Carnarvon suitable to grow a wide range of temperate, tropical and subtropical produce across the seasons.
Production in the region is intensive, with properties ranging from 4ha to 40ha and averaging about 10ha.
There are about 170 plantations on an area of about 2000ha, with an additional 400ha rezoned for horticulture use.
The region produces mostly mangoes, bananas, grapes and vegetables.
Kimberley:
Buyer demand within the horticulture market in the Kimberley, particularly in the Kununurra district, has slowed in recent times as the demand for producing fodder, cotton and other grains has increased.
Alison Todd, of Elders Real Estate, Katherine, said the region's isolation and limited access to livestock feed with high freight costs had become more of a priority for the region, with horticulture taking a back seat.
But commodities that aren't grown in other regions of the State, such as melons, have remained strong.
"There has not been much demand for horticulture properties but demand for vacant land with water licences has been strong," Ms Todd said.
She said this demand has increased exponentially since the Northern Territory land releases by the NT Land Corporation a few weeks ago, with interest coming from Australian investors, nationally-based companies and large farming families.
The release includes three developments of a total area of almost 100,000ha.
It's the NT's largest ever land release and includes the Keep Plains Agricultural Development of 67,500ha that adjoins WA's Ord River, the Wildman Agricultural Precinct which spans 26,000ha and the Larrimah Agricultural Precinct of 5712ha.
