Selective Rural property boom expected to be imminent in wake of strong beef prices
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Rural Property Boom: Rawdon Briggs, from Colliers International ( Australian Agro Division ), said recent significant sales at high prices in Australia’s outback indicated the market was picking up for beef properties.
“I would suggest we are not in a boom situation (yet), we are probably a good six months away from when prices will really start taking off,” Mr Briggs said.
“One recent example is the Chinese purchase of the MP Evans property in southern Queensland, that was off market.
“Another example is the purchase by the Hewitt family in partnership with PSP of the Reid properties near Moura for $55 million.
“They are significant deals that are occurring and they were pretty thin on the ground two years ago.”
Mr Briggs said the forthcoming sale of Australia’s biggest private land holding, S Kidman and Co, would be an important time for Australian rural property sales.
“A number of groups are taking considerable strategic positions into the market now, the Kidman transaction will occur, I believe, and other transactions will be clear signals to the rest us in the property game that the market has turned.”
He said increases in property prices often lagged behind rising commodity prices, while investors made money to spend on property deals.
“People have to bank some money and have some good outcomes in the next six months before they really open their wallets up to expanding significantly,” Mr Briggs said.
“That’s my view of it and it won’t be unlike what we saw at the end of the last beef cattle, land boom, where the commodity price had come off but the land price was still continuing to grow.
Mr Briggs is predicting there will be plenty of local interest, as well as foreign investment.
“We are seeing offshore and onshore participants at the moment and our New South Wales team are in the process of completing a transaction at the moment that had absolutely no final bidders from offshore.”
“All of them had a high net-worth and what you would describe as city-based investors (and that sale will set) a new record price for that region.
“I think times are changing and local Australian investors are gaining more confidence.”
What does this mean for competing Agricultural exporters of meat like Argentina, Brazil and Venezuela. Probably nothing unless the administrations change to being more trustworthy and business friendly which does not look likely in the short-term. We live in hope. Interestingly South Americans and in particular Argentines look to Australia as what they could have been if they had followed a more business friendly path. Instead they chose extreme socialism and have reaped the logical results. The only exception was Paraguay which is now a larger beef exporter than once beef giant Argentina.
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