Low supplies underpin strength in farm values

Nutrien Harcourts WA real estate manager - west, Jon Bahen, said they had a recent run of sales, mostly in the Geraldton and Mid West region, but supply of properties was now getting tight in the lead-up to seeding.

"There is still plenty of demand out there," Mr Bahen said.

"We are seeing a lot of interest from corporates and bigger family farm units.

"There is a strong appetite for expansion at the moment.

"People are living off previous good seasons and have more capacity to borrow.

"The banks also have a greater propensity to lend due to the higher equity in properties."

Mr Bahen said Nutrien Harcourts WA had stock coming on to the market in spring.

He said a lot of properties were in the pipeline for spring sale, especially in the northern Wheatbelt and Great Southern.

Ray White Rural WA director Simon Wilding said it had been relatively quiet in terms of properties coming on to the market in recent weeks, but this was expected at this time of the year.

"I am still very confident in the current market," Mr Wilding said.

"When properties do come up, there is a great deal of demand.

"We are very much in a low supply and high demand situation, which has been good for farmland values."

Mr Wilding said there was strong enquiry for quality land and good enquiry for pastoral land at present.

"I listed Koonmarra station recently and I have had calls every day since," Mr Wilding said.

"This is mainly open mulga country with large creek systems throughout.

"It has about 450 breeding cows plus breeders and a potential carrying capacity of 1330 large stock units.

"There is also potential for a tourism venture, with accommodation available."

Mr Wilding said interest in Koonmarra had been from across Western Australia, New South Wales and South Australia, from smaller stations looking to expand and parties interested in its carbon sequestration potential.

Mr Wilding said Ray White Rural WA did not have any large broadacre properties available on its books right now, but certainly had such properties lined-up for the spring selling period later this year.

LAWD director Simon Wilkinson said traditionally the farmland market was quieter at this time of the year, but pastoral properties were coming into their own.

His company has recently sold Rovadam, a dryland cropping and livestock opportunity at Bremer Bay, for an undisclosed sum.

This property had been stewarded by the same family for 55 years in the 500-millimetre rainfall zone along the South Coast.

Rovadam is 1094 hectares of freehold land on one certificate of title, of which 1004ha is considered arable.

The property has a mix of quality soil types, high quality structural improvements and a substantial homestead.

Operated as a mixed dryland cropping and livestock operation, it has a diverse history of cropping rotations, including canola, barley, wheat and triticale and pasture renovation, complemented by livestock breeding, backgrounding and finishing.

Mr Wilkinson said he was also working on several farm settlements.

He said the rural real estate sector was upbeat, coming off three exceptional land value years in 2020-22.

"Commodity prices have been good, interest rates are historically low and seasons have been good up to 2022," Mr Wilkinson said.

"Although 2023 was a bit off for grain production and sheep and cattle prices fell, there is still appetite for land.

"We probably won't see the 20 per cent increases in land values that were experienced in 2020-22.

"But we are seeing genuine sellers who are meeting the market, and many are getting returns above what we expected."

Mr Wilkinson said confidence would be further boosted with a good shower of rain across WA, from the South Coast to the northern agricultural region.

He said in the South West, which had experienced one of its driest summers on record, there was good enquiry for water assets.

"The arrival of rain will create a more positive vibe and discussions about farm sales will happen during seeding," he said.

Mr Wilkinson said demand for WA farmland was coming from local farmers wanting to expand and/or diversify the geographical area they operated in, interstate buyers and overseas buyers.

"Any quality land is keenly sought after, especially in the medium and high rainfall areas," he said.

Elders Real Estate senior rural real estate executive Simon Cheetham said his company had experienced a recent spate of farmland sales with a strong run of settlements through January to March.

He noted a few properties would hit the market in the coming months, however the bulk of new listings of larger broadacre properties would be scarce until seeding had been completed.

"We expect the flow of properties to market will start again around June and are in discussions with a number of growers contemplating selling property later in the year," Mr Cheetham said.

He said the current market was stable and sale prices achieved overall had been very strong.

"We are now in a holding pattern until more properties are offered for sale" he said.

Mr Cheetham said he did not expect to see a big flush of properties enter the market in spring this year, which would continue to restrict supply.

"The season and commodity prices will have some bearing on the spring outlook, however there are plenty of growers and corporates with capital still looking to invest."

"Despite the lack of supply of land, buyers are still being discerning in what they will buy, often chasing a particular soil type or geographic region."