If you are thinking of investing or moving to greener pastures join the throng. Increasing numbers of urbanites are snapping up their own slice of countryside as the growth in hobby farm and acreage sales runs parallel with that of sea-changers moving to regional towns. The popularity in lifestyle properties comes at the same time low interest rates and buoyant commodity prices are causing a surge in demand for farmland and pushing values to record levels.
The Rural Bank’s annual Australian Farmland Values report released this month found the median price per hectare rose by a notably high12.9 per cent in 2020. The steep hike also represented a seventh consecutive year of growth. Hot competition for premium rural properties from small and larger players alike has been a major factor causing soaring prices as local farming families contend with global investors and corporations for quality land. In many cases local farming families are banding together to acquire properties in a bid to keep ownership both in Australia and family-owned. Earlier this month three New England families did exactly this when they joined forces to purchase a coveted 11,800 hectare grazing property, Kingsgate Station, in northern NSW for $12 million.
A new life on the land
Regions up to three hour’s drive from major centres are understandably proving most popular for the lifestyle market. In Orange, about three hours from Sydney, property agent Stephen Townsend said price increases for both farmland and lifestyle properties had been “phenomenal.” “The last time this happened was 1999,” he said. “Back then the jump in land values exceeded 15 per cent before the market stabilised.”
Mr Townsend said the majority of “bona fide” farms in the region had been snapped up in the past 12-18 months while property prices had doubled or more over the last six years. Those in the market for smaller acreages however still had plenty of choice. “Proximity to Sydney is a big draw,” Mr Townsend said. “A lot of people love our cold winters and they can leave the office around 3pm on a Friday and be here in time for dinner.”
One of the region’s premium lifestyle properties, Rosyth, recently sold around the $5.5 million mark after having traded for $2.255 million in 2016. The 190-hectare trophy lifestyle and grazing property was bought by an expat working in Hong Kong who Mr Townsend said may make it their permanent home on return to Australia.
In the Hunter region which is in close proximity to Newcastle as well as Sydney, lifestyle properties are selling fast as is farming equipment. Damien Crump from Crump Stock & Station Agency said even tractor dealerships are finding it hard to keep up with demand. “They can’t keep those hobby-farm-sized tractors on the shelf in the Hunter Valley,” Mr Crump said.
As for small farms further from major capital cities, potential purchasers are Australia-wide. One of Elders’ leading agents in Casino in north western NSW said inquiries for lifestyle and income-producing hobby farms come from as far afield as West Australia where cashed up miners are looking for land on which to retire or invest, to those priced out of the popular Byron hinterland. A small farm sold this week to buyers from Victoria seeking a warmer climate as well as workable land. High inquiry also comes from retirees or those who have taken redundancy packages, he said. “We are seeing agribusiness more in the traditional model where the son and daughter want to stay on the land and expand the farm or buy another,” he said.
Mr Crump runs his Crump Stock & Station Agency in the Gwydir Shire region of NSW’s far north where larger farms are most prevalent. Located an hour from major rural towns such as Moree, and 90 minutes to Tamworth, Mr Crump said sheep farmers are currently driving demand in his area as they look to expand their businesses on the back of strong commodity prices. “The prices for commodities are like we have never seen and it’s giving people the extra confident to buy more land or another farm,” Mr Crump said.
According to the Australian Farmland Values report Tasmania led the charge for growth in farmland at 25.3 per cent over 2020. Western Australia followed at 19.3 per cent, NSW, 15.6 per cent, Queensland 11.8 per cent, South Australia 10.0 per cent and Victoria 6.9 per cent. The future also looks bright, according to Rural Bank chief executive Alexandra Gartmann. “Many farmers are seeking to expand and this, combined with a smaller pool of sellers, has resulted in strong competition for property," Ms Gartmann said. "Experienced buyers with clear heads and an eye on the longer-term will also weigh up geopolitical risks and their potential impact on commodity prices. But even with these risks in mind, it appears that high values for quality farmland will continue to be supported in the short to medium term.”