RECORD cattle prices and low interest rates are set to deliver the strongest rural property spring selling season in years, but some property valuers are warning that the sale of big-ticket portfolios could trigger some irrational exuberance in the market.
While weather patterns and commodity price moves will see rural property values vary geographically over the next six to 12 months, nothing is expected to have as much of an influence on the market as the sale of some of Australia's major pastoral companies.
Herron Todd White valuer Doug Knight said the anticipated sale of Australia's largest private landholding, owned by Kidman & Co, later this year could push the market into overdrive in the same way AMP's sale of the Stanbroke Pastoral Company did in 2003.
"It will surely identify the depth of the market going forward," Mr Knight said. "While the portfolio of country varies somewhat from the...Stanbroke sell-off, current market conditions and sentiments are not dissimilar.
"The aggregate sale of Stanbroke and the way surplus parts were disposed of was the catalyst for the exceptionally strong growth in land values up until 2008. It is hoped that the lessons of that time have been learnt by all."
China's PengXin, private Melbourne families and Queensland engineers FKG Group have been named as potential buyers looking to secure cattle production in a market where supply is tightening and prices are forecast to rise 40 per cent over the next year, according to the latest National Australia Bank Rural Commodities Index.
Several big Chinese buyers have entered the market already, including billionaire Xingfa Ma, who bought Wollogorang and Wentworth cattle stations in the Northern Territory for $47 million, and supermarket giant Dashang Group, which bought a cattle station in the Hunter Valley for $45 million.
Outside the beef sector, NAB is forecasting the next-highest commodity price rise to be in cotton, with a 15 per cent gain over the next 12 months.
Colliers International valuer Angus Barrington-Case said the tightly held NSW Riverina, where there had been a rise in the number of rural properties converted for cotton production, could see some uplift in value this spring.
"Values are sitting between $2000 and $3000 per hectare for developed properties, but they may attract more than $3000 in the coming season," he said.
Colliers International's Shane McIntyre said this spring selling season was supported by optimism in the sector.
"Interest rates are at an all-time low, the Australian dollar continues to fall...and there's a positive commodity outlook spurred by free trade agreements with our major trading partners."
Colliers International and Cushman & Wakefield are looking to sell the 37,584-hectare cropping property portfolio owned by Eastern Australia Agriculture. The aggregation in southern Queensland boasts a potential annual cotton production capacity of about 150,000 bales. The farm has previously been expected to fetch $180 million.
In Victoria, William Inglis & Son rural property sales manager Sam Triggs has brought to market the 2430-hectare Beckworth Court outside Ballarat. The property - one of the Western District's best-developed - is expected to fetch $15 million on a walk-in walk-out basis. Mr Triggs also has the $10 million to $12 million Shadow Creek, owned by transport magnate Doug Kefford, up for sale this spring.
"We expect a noticeable uplift in values this spring," Mr Triggs said. "It is an interesting dynamic at present; low interest rates, a good season on the eastern seaboard, strong commodity prices and a weak currency together with a shortage of good-quality assets with scale - all factors which drive land price growth and demand."
In NSW, between Walgett and Brewarrina, Raine & Horne Rural's Danny Bukowski and Andrew Tout are bringing to market a 30,000-hectare aggregation, including the Kia Ora Feedlot - a 5000-head facility that could potentially be expanded to 10,000 head. It is expected to sell for between $17 million and $21 million.
