Narrandera, Lockhart and Temora shires are among the hot button areas in regional NSW for rural dryland property with prices reaching a staggering $12,000 per hectare.

According to the Rural Bank’s overview of 2021 Australian farmland values released on Tuesday, cropping land in the Riverina is highly sought after.

The median price per hectare in the region soared by 12.4 per cent in 2020 to $5010 per hectare off the back of a 20.3 per cent increase in 2019.

A total of 160,836 ha of land in the region was traded in 2020 with the majority of transactions in the $2000-$4000/ha bracket.

There were more than 60 transactions at $10,000/ha plus.

The report found farmland remained tightly held in the Riverina region strengthening demand and lifting the median price per hectare, particularly at the top end of the market.

There was strong growth recorded in several shires including Narrandera, Carrathool, Temora and Edward River.

In contrast, median price per hectare eased slightly in Berrigan, Cootamundra-Gundagai, Murray River and Wagga due in part to an increased proportion of mid to low value properties returning to the market.

The decrease in mid to low value transactions was most evident in the shires of Narrandera, Federation and Bland.

Joann Heeney, Rural Bank Wagga Wagga, said the on-farm confidence was driven by low interest rates, robust commodity prices, and favourable seasonal conditions.

“Increased water allocations in the Riverina renewed confidence in the region after a tough year in 2019,” Ms Heeney said.

“Buyers were quick to react to opportunities, willing to compete on price to secure limited buying opportunities.”

QPL Rural agent Jason Haines said there was buoyant demand for dryland cropping properties in Narrandera, Barellan, Lockhart and Grong Grong.

“It is an era of the private family farm expanding – there is some corporate interest in the south in that dryland space but family farms are taking the opportunity of low interest rates to buy the next door neighbour or blocks close by,” Mr Haines said.

“This is either for family members or to expand the existing operation. We are seeing record sale prices popping up in the dryland areas.”

Mr Haines said the market was moving quicker than what the valuation processing times were.

He said there was a shortage of dryland properties to list with the emergence of the family farm as the major player in the industry over and above corporate buyers.

“They are being tightly held at the moment – with the prices people are talking about now there could be more come onto the market but anything that hits the market is being snapped up,” Mr Haines said.

“A lot of the dryland country is over $2000/acre ($4940/ha) regardless of where you are.”

Prices have been achieved recently in excess of $5681/ha ($2300/acre) at Barellan and $12,350/ha ($5000/acre) at Lockhart.

Mr Haines said confidence had returned to the irrigated property market.

“We are getting renewed interest out of other irrigation districts, particularly the Murray system, wanting to move into the Murrumbidgee because of the way our allocations are looking this season.

Mr Haines has irrigated farmland at Coleambally listed at around $4500/ha and greater.

“Irrigation land in general is very good value at the moment compared to what is happening in the dryland space,” he said.

“That dryland space is going leaps and bounds and it has to do with scalability and labour.

“Corporates are taking check as they have experienced massive capital gain and are wondering how long it will roll on for.

“The dryland area looks like we are in for another big year if we could get another rain.”

Across the state, the median price per hectare reached a record $5855 in 2020, jumping by massive 15.6 per cent on the back of low interest rates, strong commodity prices and favourable seasonal conditions.

In 2020, a total of 1.4 million hectares traded in NSW, resulting in a 15.6 per cent median price growth in 2020 and a compound annual growth of 8.1 per cent over 20 years.

The western region recorded the highest growth in median price per hectare of 37.5 per cent while the southern region increased by 12.4 per cent.

The number of farmland transactions finished at 3073 for 2020 across the state valued at $3.7 billion.

This article appeared in the Narrandera Argus, 6 May 2021.