the analysis of NSW rural property:1990-2014

Eves, Chris (2016) the analysis of NSW rural property:1990-2014. In 22nd Annual Pacific Rim Real Estate Society Conference, 17-20 January 2016, Sunshine Coast, Qld.

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Abstract

Problem/Purpose

  • Over the past 10 years there has been a greater awareness of the role that rural property plays in both the food production and food security. This in turn has led to a greater interest in the property investment sector for the inclusion of rural property in investment portfolios. A major concern for a number of these institutional investors is the availability property investment data.

Design/methodology/approach

  • The paper provides a full analysis of the rural property sales transactions that have occurred over the period 1990 to 2014. These sales have been analysed on the basis of NSW Local Government Areas, NSW Agricultural regions and the main rural land uses in NSW. Sales data has also been assessed in conjunction with ABARES rural income data to enable both capital and income returns to be assessed.

Findings

  • Over the past 25 years the capital return for rural land in NSW has varied significantly based on geographic location and land use. A number of locations in NSW have also benefitted from the increase in foreign investment, mining and general population increases in growing locations, especially along the NSW coastline and the Hunter Valley. The mixed farming areas of the State have shown the highest average annual total returns, with the pastoral areas recoding the highest capital growth over the past five years but at high levels of volatility. During the GFC all rural locations showed a positive growth in rural land prices, unlike other property investment sectors during the same period.

Research limitations/implications

  • Income return data is based on ABARES farm income averages and does not fully reflect the income returns that are being achieved by institutional grade rural property. The relatively low numbers of rural sales that occur in any LGA per annum are relatively low compared to residential property sales and actual location within an LGA can distort annual capital growth.

Originality/value

  • This is the only comprehensive transaction based rural property investment performance index covering a full State of Australia. Based on total Australian farm numbers this analysis represents over 35% of agricultural production in Australia and is reflective of overall rural land use capital growth trends in other Australian States.

Impact and interest:

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ID Code: 97697
Item Type: Conference Paper
Refereed: Yes
Keywords: rural property, capital returns, property investment, farm returns, rural land
Subjects: Australian and New Zealand Standard Research Classification > AGRICULTURAL AND VETERINARY SCIENCES (070000) > AGRICULTURE LAND AND FARM MANAGEMENT (070100) > Agriculture Land and Farm Management not elsewhere classified (070199)
Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > COMMERCIAL SERVICES (150400) > Real Estate and Valuation Services (150403)
Australian and New Zealand Standard Research Classification
Divisions: Current > Schools > School of Civil Engineering & Built Environment
Current > QUT Faculties and Divisions > Science & Engineering Faculty
Copyright Owner: Copyright 2016 PRRES
Deposited On: 29 Jul 2016 02:14
Last Modified: 01 Aug 2016 00:14

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