Index understated SW Vic slump PETER COLLINS05 Mar, 2014 04:00 AM Print Increase Text Size Decrease Text Size Comments 0 Better conditions in south west Victoria should help bolster land values this year. Better conditions in south west Victoria should help bolster land values this year. LATEST FGV welcome $16m orchard bail out plan Tas dairy chases foreign cash Fonterra, Danone in court Deregulation a win for WA Case considers GM pros and cons Index understated SW Vic slump A RURAL Finance index of farmland sales trends has been criticised for grossly understating a slump in dairy farm values across south-west Victoria last year. According to the index, which took two years to produce and tracked sales across the state since 1990, dairy land values fell 1% statewide in the 2012-2013 financial year and 2% in the south-west for the 18 months to June last year. However, farmers, an accountant and real estate agents said values in the south-west for the full 2013 calendar year had fallen 20-30% and in one case 50%. The index released last week in Melbourne said land values in dairy regions had recovered from a dip in 2008 caused by the global financial crisis. Rural Finance agribusiness general manager Andrew Smith said the figures excluded forced sales, compulsory acquisitions and inter-family transactions and would be updated when full calendar year data was available from the Valuer-General’s Department. “We used fair market value figures,” he said. Farmer Power spokesman Jock O’Keefe, of Winslow, Vic, said the Rural Finance index was misleading for south-west Victoria. “Property values have come back by thousands of dollars — nearly half in some cases,” he said. “Although confidence is coming back the industry’s volatility is turning new investors away. “With the lower dollar and higher export returns, farmers should now be getting an extra 30 cents a litre payment.” Coffey Hunt accountant Garry Smith said there was clear evidence that banks had tightened lending criteria for dairy farms based on lower equity. “Many farmers have said it was the worst year they had ever experienced,” he said. “Although there were very few sales, most properties that did sell were at big discounts and were forced sales. “I would think values have fallen 35%.” Warrnambool-based property valuer Roger Cussen said lower farm prices should be reflected in the next round of municipal revaluations. “In general terms values would have dropped 20 to 30% depending on condition of the farm,” he said.
Posted on: Wed, 05 Mar 2014 12:35:03 +0000
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