"Record cattle prices and low interest rates" are all expected to create strongest rural property spring selling season in years. However, some property valuators are warning that the sale of big ticket portfolios might probably trigger some irrational exuberance in the market, as per Queensland Country Life.
As rural property values varies geographically over the next 12 months, some of Australia's major pastoral companies are expected to have strong influence on the market of sale.
According to Herron Todd White valuer Doug Knight, the expected sale later this year of Kidman & Co, which is the Australia's largest private landholding could push the market into "overdrive in the same way AMP's sale of the Stanbroke Pastoral Company did in 2003."
"It will surely identify the depth of the market going forward," Knight said. He added, "While the portfolio of country varies somewhat from the...Stanbroke sell-off, current market conditions and sentiments are not dissimilar.The aggregate sale of Stanbroke and the way surplus parts were disposed of was the catalyst for the exceptionally strong growth in land values up until 2008. It is hoped that the lessons of that time have been learnt by all."
From Chinese group PengXin to private Melbourne families and even Queensland engineers FKG Group have been named as potential buyers. The sale is seeking to secure the production of cattle in a market where supply has becoming narrower and prices are expected to rise by 40 per cent over the next year according to the Nab Rural Commodities Index via Financial Review.
Numerous Chinese buyers, including billionaire Xingfa Ma, who purchased Wollogorang and Wentworth cattle stations in the Northern Territory for $47 million and Dashang Group, who bought cattle station in the Hunter Valley for $45 million, have already entered the market and has helped in lifting prices.
NAB's latest forecast is the next-highest commodity price rise to be in cotton, with a probable 15 percent rise over the next 12 months.