Record sale prices per hectare and property volumes marked a highly successful year in 2024 for Nutrien Harcourts WA.
The number of properties sold in this State by the company and their values were well up on previous years, according to manager west, Jon Bahen.
He estimated rural property values were up by about 10 per cent from 2023 and volumes of sales were up about 20pc.
“There was certainly no slow down in activity or values in 2024,” Mr Bahen said.
He said there was markedly less activity from big corporates compared to previous years.
“A stand out feature of 2024 was that a lot of smaller blocks and land parcels came on to the market as farmers quit parts of their properties, including those that may have been leased out for some years,” Mr Bahen said.
“Sellers took the opportunity of high land values to cash-in on any land that was in excess to their needs.
“And having smaller parcels of land made these more affordable to local buyers.”
Mr Bahen said a lot of the property transactions in 2024 were in the $5 million to $10m range, rather than the $10m to $20m range, as was experienced the previous year.
He said these were relatively small holdings and predominant buyers were neighbouring farmers who could afford to come in to the market at that level.
“The corporates were active, but the speed with which the family farming units came in to the market was significantly higher than in previous years,” Mr Bahen said.
“When bigger properties came up, a group of surrounding farmers tended to form syndicates to buy land and share it.
“This kept the corporates at bay.”
Mr Bahen said the corporate interest that was around came mostly from UK pension funds.
He said the corporates actively did their due diligence on properties but were pushed out of many transactions by local buyers, who could offer cash without undertaking a lengthy due diligence process.
Mr Bahen said there was a relatively even spread of properties sold from across WA and confidence was high throughout most regions, even those where seasonal conditions had been challenging.
He said average farm values in the Mid West and Great Southern ranged from $30m to $35m and many farmers in these regions had 90pc equity.
“If you are sitting on an asset worth that much and you have that level of equity, it gives you strong buying power,” Mr Bahen said.
He said the biggest challenge in 2024 was uncertainty of the seasonal conditions at the start of the year on the back of late-breaking rains.
Mr Bahen said many areas then got out of jail as winter rainfall kicked-in.
“Crop yields in the Mid West were not as good as they looked but they turned out OK by the end of the growing season given the poor finish in spring,” he said.
“While yields might have been down from average levels, grain prices carried the businesses through.
“High confidence levels contributed to our pre-June spending on properties being up compared to previous years.
“There was a lot of activity pre-June and then the traditional peak of selling time in spring was bedlam.
“The number of contracts being signed was well up and these were still flowing through until Christmas.
“It was a definite break in the traditional seasonality in sales and smaller blocks definitely sold best in 2024.”
Looking ahead, Mr Bahen said he believed similar trends would flow through to 2025.
“I think it will be more of the same,” he said.
“Financial returns from farming in 2024 are likely to be pretty fair, so that will not dial down the pressure family farmers can put on the property market.
“Corporates might shuffle some assets, quit some land in more marginal and less productive areas and consolidate their holdings in higher rainfall areas.”
Mr Bahen said there were no factors in the market that were indicating farm land values would drop in 2025.
He said most in demand for the coming year would likely be properties in areas with annual average rainfall above 400 millimetres.
“These are the most tightly-held areas, where cropping is most intensive.”
Mr Bahen said corporates may struggle to get good returns on assets because lease rates haven’t kept pace with land prices.
“As leases come to an end, the renegotiations are likely to push lease rates higher,” he said.
