Yorke Peninsula is top of the crop for farm land prices
by Chris Russell
Farm land prices on Yorke Peninsula have surged a whopping 20 per cent in five years, fuelled by tight supply and strong commodity markets.
According to the latest data from rural financial services provider Rabobank, the area recorded the fastest regional growth in Australia from 2013 to 2017.
“We’ve got farmers wanting to expand but a decreasing number of sales,” Rabobank analyst Wesley Lefroy said.
Good operating profits on Yorke Peninsula cropping land pushed prices toward $12,000 per arable hectare compared to under $6000 in 2017.
However, the number of sales has halved over the period. BankSA has also seen keen interest in primary production land.
“We’re seeing strong demand in the Lower to Mid-North, South-East and lower parts of the Eyre Peninsula, with prices meeting or exceeding expectations,” said Peter Panas, BankSA’s regional executive manager.
“This is particularly so for quality properties that have good infrastructure and improvements. “
“In the state’s South-East there is strong investment appetite for quality livestock properties, and securing of paddock feed reserves which can be a back-up for food supply in drier regions, and cheaper alternative to hand feeding for farmers in drought-affected areas.
“In the South-East, Lower and Mid North, Yorke Peninsula and Lower Eyre Peninsula, good quality cropping land remains highly sought after.”
The price rise represents an increase in the wealth of farmers but presents a barrier for those wanting to expand or consolidate.
Yorke Peninsula farmer Scott Hoyle bought a property late last year for $4.5 million.
He was angered by having to pay hundreds of thousands of dollars in stamp duty on top of the high purchase price.
“Stamp duty is a huge impost on small business,” he said, of farmers having to borrow money for the tax levy.
Mr Lefroy said the tight land supply was causing farm owners to look outside their preferred neighbourhood.
Some farmers on Yorke Peninsula were buying property in Eyre Peninsula and vice versa. There had been no significant increase in foreign buyers although there had been a slight increase in the proportion of shares owned by foreigners in companies holding primary production land.