A COMBINATION of a terrific season, low interest rates and keen demand has seen a land sale in the tightly held Kaniva district in far western Victoria break Wimmera records for farming land.
Stuart Kyle, Westech Real Estate, Kaniva, said the 259 hectare (640 acre) block at Lillimur South, south-west of Kaniva went for a stunning $6820 an acre, sold to the Eastwood family, who farm locally.
He said it smashed previous district records out the park.
"A block nearby went for $4000/ac in 2019, this represents a 42 per cent increase, it really is a big step up," Mr Kyle said.
He said the block was not the soil type that normally attract the big bids.
"It is right near the self-mulching black clay 'lentil country' you can find in the Lillimur area, but it is more mixed ground," he said.
"However, we're seeing excellent results on this type of ground in recent years and it is very reliable in terms of rainfall, hence the strong interest."
Mr Kyle said he expected the block to break the district record, but not by quite so much.
"I thought we'd get close to $6000/ac, but getting quite this high was a surprise."
He said the strong sale was underpinned by local demand from family farming businesses with a number of bids coming in for the block.
"We had four potential buyers bidding right up to $6000/ac and then the last two bidders took it up to the final mark."
Mr Kyle said part of the reason for the high price was the unique lay-out of the Kaniva district, with limited amounts of prime farmland available.
"To the north of the Western Highway rainfall can drop off reasonably quickly and you are in what I call strong Mallee country, and to the south you hit the Little Desert, so there is not that much of that premium ground available, hence the demand."
The Kaniva sale has put a new step up in Wimmera land values, but is confirming a strong trend.
Sales in the past 12 months of what is believed to be over $4600/ac at Glenorchy, in the southern Wimmera, and $4300/ac at Banyena have highlighted the insatiable demand for land.
And while expensive Mr Kyle said that with the low interest rates it was possible to make a case for buying land instead of leasing.
"There's a lot of farmers who have had a fantastic run of seasons and if you have the cash reserves available then with interest rates where they are then buying makes sense as the best way to expand as opposed to leasing or share-farming if it is possible."
All eyes will be on a number of upcoming land sales, including blocks on the Wimmera Plains north of Horsham and one at Miga Lake, in the region's higher rainfall zone, in coming weeks, to see if the dizzy heights set by the Kaniva sale are continued.