REAL ESTATE agents are hoping the latest interest rate cut, and a good rain, will breathe new life into South Australia's slow-paced rural property market.
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Cropping land sales are usually quiet at this time of year but the dry autumn, and fall in livestock commodity prices, has seen some vendors with grazing land hold off selling.
The listing of a couple of blue-ribbon South East grazing properties has been a good sign for the industry – the 1466-hectare Spotshill, Biscuit Flat, will be auctioned on Wednesday, May 29. Registrations of interest for the 1285ha Karana, Mount Gambier close on Friday, June 28.
Landmark Harcourts regional real estate manager-south east region Simon McIntyre said the latest interest rate cut would be positive for the struggling market, especially after a good rain restored confidence.
"There reaches a real tipping point where interest rates become quite appetising, and with the property market struggling for sometime, opportunities start to emerge for potential buyers," he said.
"Financial institutions still have a tight criteria on their lending but it comes to a point at which it becomes attractive to enter the market."
Mr McIntyre described the 2012 spring selling period as "solid" but said many buyers preferred to sit back rather than participate, except a few who rushed in to capitalise on opportunities.
Large-scale operations were the shining light – demand for them easily outstripped supply.
The 6800ha blue-ribbon grazing property Glenstrae, at Willalooka, sold for more than $9 million in November. A fortnight ago, 13,000ha in 300-millimetre rainfall country at Wirrulla on the Upper Eyre Peninsula was bought for more than $4m.
"The cost structure within agriculture now demands producers diversify their portfolio, with a blending of grazing and cropping, and to just expand their opportunities," Mr McIntyre said.
"The close regional opportunities are attractive to those who already have the capital equipment to manage the extra land."
He said there had been a general levelling of prices in the past couple of years, even a softening in some areas as farmers exited the industry, and urged vendors to take a realistic approach to pricing.
Mr McIntyre said that with a limited pool of buyers, vendors had to be more aggressive and choose the right marketing format to get results.
"We had four properties on the Lower YP at Warooka which had been on the market for 14 to 18 months which we put to auction about three weeks ago, and now three have gone to contract," he said.
"By going to auction, it demonstrated a strong commitment to meet the market. It was a very pleasing result."
Elders rural sales executive for SA and Northern Territory Phil Keen says there is less "buzz'" in the market now but that they are still "doing deals".
After a good harvest in many areas, croppers had wanted to reinvest in more land, ensuring a solid spring selling period.
Mr Keen says properties in high-rainfall areas with high yielding potential, such as the Mid and Lower North and Yorke Peninsula, have held their value.
Though prices in more marginal cropping areas have softened, it did not reflect parts of the Western Australia wheatbelt where land is not selling even at hugely deflated prices.
*Full report in Stock Journal, May 16 issue, 2013.
