Family agribusiness empires push red hot rural property market higher By Arlie Felton-Taylor, Ashleigh Bagshaw, and Anthea Moodie

 

Australia's rural property market is hitting unprecedented heights across all classes of land and experts say there is no sign it will slow anytime soon. 

Tim Lane, a national director with independent valuation firm Herron Todd White, said the market had surpassed the 2008–2009 period that had been regarded as the peak. 

Mr Lane said this year's prices were exceeding all those sales. 

"People are paying big money and it's across the whole country," he said. 

"It is the whole Australian rural market landscape and at the moment it doesn't look like it's going to abate. 

"It's large families, smaller families, and probably the market where it has got a bit harder is the new entrant into the market, just on the rise of the values." 

While the details of many bigger deals are going undisclosed, it is estimated some of the top prices being paid are more than a hundred million dollars for holdings. 

The sale of grazing and cropping farm South Callandoon, near Goondiwindi, and the enormous Gulf cattle breeding station Miranda Downs earlier this year, are suspected to have fetched enormous prices. 

This year has also seen northern Australia's largest citrus grower sell to another Australian entity in a deal worth $220 million. 

High commodity prices and low interest rates 

After years of drought and many graziers selling stock, the diminished numbers and resulting shortage have pushed prices for both cattle and sheep continually higher throughout this year. 

Mr Lane said it was those booming commodity prices that were helping but said he felt the current rates for finance had slightly more influence. 

"I think the interest rate outlook is probably the biggest driver in all honesty and I think people in commodity markets understand they will go up and go down," he said. 

The Maranoa region in south-west Queensland, located 500 kilometres west of Brisbane, is seeing a property boom with huge demand meaning record prices. 

Roma-based property agent Daven Vohland said he had seen the gavel drop on 100 per cent of property auctions this year and prices were increasing monthly. 

"We saw the market have gains in January and February and now, as we're well into August, the market seems to be even stronger again as in the beginning of the year," Mr Vohland said. 

"I have been selling real estate for 25 years and we've never seen anything like this." 

The Eastern Young Cattle Indicator has increased 430 per cent since 1997 with land prices going up 420 per cent since 1995. 

Mr Vohland said people were buoyed by the correlation between the price of cattle and the price of land. 

"Someone said to me it is no good having money in the bank, so we want to put money into rural land. 

"That's the confidence!" 

Many of the properties being sold are the result of some succession planning with Mr Vohland explaining that nearly all the people that he markets land for are going to retire or semi-retire. 

In the Maranoa Regional Council's neighbouring Balonne Shire, the Crothers family has sold its Booligar mixed cropping operation to retire. 

It was purchased for an undisclosed amount by a New South Wales farming family as an expansion to their current Mallawa operation and will be run in partnership with another family from Walgett. 

Keeping it in the family 

John Rolfe is a professor of regional economic development at Central Queensland University, and he said multi-generational farming families were taking the opportunity to create agribusiness empires. 

"We're seeing operations now in beef and other sectors that, from the outside, might look like corporate entities but they are really still family farms at heart," Professor Rolfe said. 

"Where these family farms can find ways of getting bigger, they win because they get both the economies of scale that corporates normally have but they also get that really precise technical knowledge that you get from generations of agriculture." 

Professor Rolfe said family businesses were partnering with corporate entities to obtain the capital needed to be able to expand their business. 

"One of the traditional barriers to expansion has always been lack of capital and that is in agriculture and in a lot of sectors in Australia but what we are starting to see now is some quite smart operations where family businesses are able to partner sometimes with overseas businesses to be able to bring in more capital," he said. 

While this expansion was happening across several agricultural sectors, it was most prominent in the beef industry. 

"In the beef industry, the big thing that's driving it is the higher returns so great prices, really good operating conditions at the moment," Professor Rolfe said. 

"So those families that have taken risks in the past and have expanded, they've been rewarded, and they've made more money and that's allowed them to continue to increase in scale." 

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