Australian land boosted by foreign investment

Foreign investment is boosting Australia’s rural property market, but traditional sales are less frequent, according to Colliers International.

There is significant demand for larger farms and grazing properties at the corporate end of the scale (above US$20m), but land agents are struggling to find buyers for traditional holdings.

Rawdon Briggs, Colliers International Queensland rural and agribusiness executive, said prices in most sectors of the rural property market appear to have bottomed out and transactional activity is increasing.

“We know that capital is being raised globally and new rural and agribusiness funds are being established,” he said.

Global money is entering the Australian market and more purchases are being made, with prices rising across the board in the rural property market.

The main attraction of Australian land is the proximity to the key Asian export markets, which are steadily growing due to rising global food demand.

Agricultural food exporters seeking lower transport costs are some of the biggest buyers of Australian rural land. While this trend is not new, Mr Briggs believes it shows the sentiment towards investment in Australian agriculture is gaining strength.

Despite the growing corporate land market, there are fewer traditional buyers coming forward. There could be a number of reasons for this, said Alex Thamm, Colliers national director of rural and agribusiness valuation.

“The traditional neighbour-to-neighbour market for smaller holdings is still subdued,” he said.

“This sector typically forms the backbone or floor in the market and many of these buyers are still cautious, reluctant to act or being constrained by bank required equity positions.”