Texas tycoons profit from Australian property market, as interest rates see demand surge

Geoff McGilvray, a rural real estate agent with Elders, said the demand for farming properties in all categories at the moment was unprecedented.

“It seems to be that wherever you are is very saleable, and at a price level that’s not been achieved in previous times,” Mr McGilvray said.

“We’ve had dryland farming property east of Cootamundra make well in excess of $6,000 an acre, country west of Ganmain with 20-inch rainfall and less make $3,000 an acre, and I’ve also negotiated river country west of Wagga Wagga at $6,000 an acre.

Mr McGilvray said low interest rates, high commodity prices and a shortage of farming properties up for sale had created a “perfect storm” and driven the market up.

He’s yet to see any signs of it slowing down, either.

“I think we’ve got a generational change in prices,” he said.

“Unless those drivers change dramatically, I can’t see any reason why the prices would slow down, especially not in the short-term, so I actually think we’re going to see an even further escalation in demand.”

Texas tycoons secure $18m sell-off

Further proof of the property boom came when a Texas-based farming family sold their four properties near Gundagai for more than $18 million recently.

Diane and Gary Heavin, who founded the global gym chain Curves, were expecting their 3,700-hectare beef, prime lamb and wool aggregation to fetch about $15 million at auction.

The Heavins bought Riverbend, which is 1,547ha, 10 years ago and have since added nearby Tooracoll, Woolaway and Donna Valley to their portfolio.

Elders Gundagai selling agent Abb McAlister said there was national and international interest in the land, but it was farming families from New South Wales and Victoria who snapped it up.

There were 100 inspections of the properties, with interest primarily from people already on the land wanting to buy more as part of a succession plan for their family.

“Which is excellent, we don’t get a lot of overseas inquiry about grazing country. They are more after the broad acre stuff out west and the big acres,” Mr McAlister said.

On average, the properties sold for just over $2,000 an acre or $4,900 a hectare.

“It was a great price and the Heavin family have certainly made a very good capital gain since they purchased them,” Mr McAlister said.

Mr McAlister said the COVID-19 pandemic hadn’t caused the property market to stall but, in fact, had done the opposite.

“When we have these things like a pandemic and the global financial crisis, things like the share market that people can invest in fall away, but land values don’t,” he said.

Boom for residential market, too

John Mooney, director of John Mooney Real Estate in Wagga Wagga, said the residential market was also booming, with properties — including rentals — being snapped up in record time.

Stock levels in the greater Wagga region have dropped by around a third in the last three months, according to domain.com.au, from about 750 — the average for the region — to about 550 properties up for sale today.

The length of time they’re staying on the market has almost halved, too, according to realestate.com.au, from 73 days in March to just 40 in July.

And vacancy rates for rentals in the Riverina are the lowest in the state this month at 0.6 per cent — down from an average of about 2 per cent, the latest Real Estate Institute New South Wales survey shows.

“There’s very limited supply of new properties coming on, which is forcing buyers to act quicker, and that’s great as far as we’re concerned,” Mr Mooney said.

“A lot of old stock that’s been on the market for quite a while has now sold, which is another bonus to the vendors.

As for what kinds of properties are going the quickest, Mr Mooney said all of them.

“Right across the board, there’s huge demand,” he said.

“Rural properties, small lifestyle properties, are extremely popular and in town, from two-bedroom units to acreage blocks, million-dollar pluses are all finding very strong demand.”