Decade high prices in CQ rural property despite drought
THERE have been more rural land sales in Central Queensland above $10 million in the past six months than at any other point in the last decade, according to Herron Todd White.
The company's August review has a positive view of the region's rural real estate market, despite much of the state being plagued by drought.
The dry season has reduced listings, but demand still remains high with a number of multi-million dollar sales in the past three months.
Blackall's Athol station sold for $23.75 million to the Moller family, while Portland Downs in Isisford was snapped up for $23 million by the North Australian Pastoral Company.
Will McLay, director at Herron Todd White Central Queensland, said confidence in the rural property market had been driven by strong cattle prices in recent years and positive outlooks on the short-term future of the industry.
"The key market drivers are all as good as they could possibly be since about 2007/08," Mr McLay said.
"We're just coming off record cattle prices so the key market drivers have been optimal for a couple of years now.
"That has created strong demand and there's very low supply and that in balance creates competition and escalation in prices."
Mr McLay explained the drought in Queensland was isolated to specific areas which has improved prospects for those properties on the market.
"If you drove through 100km of Central Queensland, you'll see varying levels of dry conditions and you'd probably see some properties that are in pretty good condition," he said.
Crucially, there has been strong local interest in rural property with Central Queensland families buying three of the four highest sales in the past three months.
"The evidence we've seen is that the family owner-operator is the dominant group in this part of the world at least," Mr McLay said.
"It means there is a good optimistic view on the industry and there isn't really anything in the short-term at least that would suggest there's going to be any major problems in the industry so hopefully that will make for a stable market environment.
"I think some of the corporate players are starting to wind back a little bit as the yield compression doesn't fit their return profiles the same way it did 12 to 24 months ago."
In an interesting twist, similar parallels are being seen in the sugar industry areas of North Queensland.
"It is not often that cane and cattle market trends are doing similar things," the report states. "Usually when one is up, the other is down."