Rural Market Update - May 2024

Real estate market updates are regularly broadcast across multiple media outlets and the average person now has information at their fingertips about median house prices and trends in their suburb. For residential property owners, this sales data can be relied upon to make an informed assessment of the value of their property. But what about rural property markets? How are they performing and what factors are currently affecting the value of a rural property in SE Qld?

For rural property owners, this information is not as readily available, resulting in widespread disparity between the price expectations of vendors and the current market conditions. Unlike most residential markets, rural properties for sale are recording longer ‘days on market’ (time it takes to sell) and lower enquiry levels than they were 18 months ago when rural real estate was booming.

From 2020 – 2022 we saw a marked increase in property values and achieved a number of record sale prices. Buyer demand was high – off the back of historically low interest rates and favourable weather conditions. Interest rates were down and cattle prices were up. Beaudesert, which hosts many fine cattle producing properties with the capacity to run more beasts to the acre than many other areas, saw a jump in rural property values. The Scenic Rim has a very diverse production base – not just cattle. This period produced just about all sectors showing price growth.
We saw the return of the agricultural investor to Beaudesert, the likes of which we had not seen since before the GFC. These are buyers who tend to have a core business that generates a high cash flow. They are looking to diversify their business portfolio by including an agricultural asset. This is where Beaudesert benefits from its close proximity to Brisbane and the Gold Coast as buyers can run their core business in those locations and keep a close eye on the farm in the Scenic Rim.

Things have changed. Now in 2024, buyer demand for rural properties (farming and lifestyle) has slowed due to a host of reasons. So, let’s take a look at those.

Optimism around predicted interest rate cuts has curbed, as inflation proves harder to bring down than expected.
Whilst cattle prices seem to have recovered somewhat since late 2023 (the Eastern Young Cattle Indicator (EYCI) hit a low of $3.49 per kilogram in October), they certainly haven’t reached the values we saw 18 months ago, hitting a record of 1191 cents per kilogram in January 2022.
Widespread flooding across the Scenic Rim in recent years increased property insurance premiums and added to the reluctance of financial institutions to lend on flood prone properties.

Council’s knee – jerk response in lifting the flood mapping levels by a blanket 14% resulted in properties (or parts thereof) being mapped as flood prone that have never been under water. This is also used to determine the areas in which a new owner can establish a residence/additional farm infrastructure.

Buyers commonly use the Council flood maps as a source of information during their due diligence when looking to purchase a property. An unfavourable flood map can have significant negative affect on a property’s market value.
But it’s certainly not all doom and gloom. We have plenty of buyers in the market for grazing properties and hobby/lifestyle farms, just at more moderated prices than those of the start of the decade boom.

Higher than average rainfall totals have improved buyer confidence as water and feed is in abundance. The district looks a picture.
In addition, the demand for rural land is continually supported by the increased competition for farmland for non-traditional sources of capital. This includes the growing number of investor groups seeking to generate renewable energy, biodiversity offsets and carbon sequestration income opportunities from rural holdings.

So, what do we tell our vendors when they approach us to list their property? We provide an honest assessment of the worth of their property now. The factors that work for it and against it. How does it stack up against recent sales and current competition? We give advice on the best means of sale.

Yes, the market has slowed – but it hasn’t stopped. The sellers with an accurate understanding of the worth of their property now, are the ones who are selling now.