Further to the release of the new Elders Rural Property Update, we now have the capability to draw on every rural land sale over 40 hectares.
This begs the question, which cropping dominant regions top the list in 2021?
Following on from our article on the top five livestock regions in 2021, we decided to look at cropping dominant regions in the same way.
Instead of just looking at median price growth which is only one metric to consider when assessing the rural property market, we draw on multiple insights from the database.
This exercise isn’t designed to fit a specific investment, it’s purely hypothetical and a means to demonstrate how this data can be used to rank regions across Australia depending on the circumstances of the investor.
It’s a fun and insightful way to compare different regions across Australia and a chance to learn something about a region you’d never heard of or considered.
Matt Ough, author of Elders Rural Property Update came up with the below criteria and asked Elders Real Estate specialists in each region for the inside knowledge on what makes the region so appealing.
Common trends among the top five
The obvious blanket factor of the past decade has been declining interest rates but that’s something that needs to be backed by profitability on-farm in order to justify a property purchase.
Commodity price has been a linking factor between regions along with favourable seasonal conditions.
Wheat prices in December 2021 were up by 36.2 per cent in South Australia, 33.9 per cent in Victoria, 27 per cent in Western Australia and 26.3 per cent in New South Wales, this varied slightly depending on location, but it’s a compelling story in terms of revenue growth in the top five regions.
In addition to wheat, barley prices were up by 36.6 per cent in South Australia, 24.1 per cent in Victoria, 12.9 per cent in New South Wales and 3.9 per cent in Western Australia.
Canola is also produced in each of the top five regions but on a smaller scale. However, canola prices were up by a staggering 54.4 per cent in South Australia, 44.3 per cent in Victoria, 40.1 per cent in Western Australia and 39.1 per cent in New South Wales.
Nathan Cattle, Managing Director at Clear Grain Exchange highlights the strength of Australian grain on the world stage and how that demand flowed through to prices in 2021 and into 2022.
“Grain prices have been favourable for Australian growers, driven by a combination of Black Sea conflict and less than ideal growing conditions in other major producing areas of the world.
"This has put Australia in an enviable position to supply the world with grain."
Nathan Cattle, Managing Director at Clear Grain Exchange.
"Prices in South Australia have consistently been the strongest in the country this season (2021 – 22), albeit that all states have been trading below export parity (the equivalent value of physical grain being traded off-shore). Hence there is opportunity for growers to offer their grain at a target price rather than simply accepting bids advertised by merchants.
"The Ukraine/Russia conflict does not look likely to abate in the medium term and we are nearing the first stages of the winter crop harvest in the northern hemisphere. Hence the window for those crops to improve is closing, however there is still potential for spring crops to improve if conditions pick up in the coming months which could weigh on prices. Overall, there are reasonable drivers to support Australian prices again this season.”
The list of common factors could go on and on, generational change is another driver which has anecdotally resulted in a higher volume of listings in several regions across the country.
The selection criteria
- Two double digit quarters of growth in median price per hectare in 2021
- A rolling one-year median price per hectare growth rate of over three per cent per quarter
- Liquidity of over 10 transactions per quarter
- Low variance in median growth over the past three years
- Ranked according to quarterly compound average growth rate for 2021
Click on each region to view the historic trend for median price per hectare and transaction volume and read why our Elders Real Estate experts believe their region stands out from the rest.
- Major rural centres: Charlton, Horsham, Hopetoun, Kaniva, Kerang, Mildura, Ouyen and Swan Hill.
- Major crops: Wheat, barley and canola.
- Median price: The rolling one year median price per hectare averaged a quarterly increase of two percent.
“The Wimmera-Mallee is a region where in some instances perceived value relative to other comparable locations has led to an increase in demand and price. Corporate and family expansion opportunities, high grain prices, good yields and consecutively good seasons are all factors that make the region an appealing rural property prospect. Limited availability of assets presented to market, is something which has kept demand high and increased prices for assets which have sold."
"Large family farms and corporates have been active in the region and buying power remains high, driven by appreciating balance sheets. We expect the positive trend in land values to continue in the second half of 2022.”
Nick Myer, Elders State Real Estate Manager, Victoria and Riverina
Check out our latest rural real estate listings for Wimmera-Mallee.
- Major rural centres: Beverley, Corrigin, Cunderdin and Narrogin.
- Major crops: Wheat and barley.
- Median price: The rolling one year median price per hectare averaged a quarterly increase of 3.1 percent.
Check out our latest rural real estate listings for Central WA.
- Major rural centres: Beverley, Corrigin, Cunderdin and Narrogin.
- Major crops: Wheat and barley.
- Median price: The rolling one year median price per hectare averaged a quarterly increase of 3.1 percent.
Check out our latest rural real estate listings for Central WA.
- Major rural centres: Ceduna, Cummins, Cleve and Port Lincoln.
- Major crops: Wheat and barley.
- Median price: The rolling one year median price per hectare averaged a quarterly increase of 3.8 percent.
“We saw records broken in a number of popular areas after another strong year for the rural property market. Strong buyer enquiry not only from locals, but also from investors and farmers from other regions of the state helped push demand higher."
"The additional widespread demand, along with a healthy appetite from locals to expand is the key driving force for price growth in the region."
"Sale results continue to surpass even the most positive expectations in many areas on the EP. Despite suggestions of interest rates being on the move, they are still very low historically and given that Australian commodity prices remain high, I expect a continuation of high prices for agriculture land being achieved for the rest of the year and beyond."
The Eyre Peninsula recorded an increase in median price per hectare of 16.3 per cent in the 2021 calendar year, taking the five-year average annual growth rate to 25 per cent.
"In the 14 years I’ve been in real estate, I have never seen growth like it and it’s hard to imagine a better time to sell.”
Luke Duncan, Elders Real Estate, Port Lincoln.
Check out our latest rural real estate listings for the Eyre Peninsula.
- Major rural centres: Coonamble, Dubbo, Forbes, Gilgandra, Nyngan and Parkes.
- Major crops: Wheat and barley.
- Median price: The rolling one year median price per hectare averaged a quarterly increase of 5.7 percent.
“The Central West region of NSW continues to see strong levels of demand across all segments of the rural market with recent sales from autumn into winter confirming ongoing confidence. Winter cropping season is looking very positive; however, a considerable amount of the state has experienced wet weather, presenting challenges for weed control and sowing."
"We expect confidence in rural property to continue in the foreseeable future driven by the prospect of high grain prices again this season and a build-up of solid buying power from appreciating balance sheets.”
Richard Gemmell, Elders State Real Estate Manager, New South Wales.
Check out our latest rural real estate listings for Central West NSW.