Foreign investor bustle for food for Australian farms cools amid COVID-19 and skyrocketing costs

The Foreign Investment Assessment Board (FIRB) well-liked $5.8 billion price of proposed international funding in Australian agriculture, fishing and forestry in 2020-21, when when put next with $8.3 billion the 300 and sixty five days earlier than.

Longtime New South Wales-essentially based rural property specialist Chris Meares believes the dip can largely be defined by the COVID-19 pandemic.

“The inability [of foreign investors] to transfer spherical the arena freely [to inspect properties], I reflect has had a mountainous operate,” he said. 

He believed the opposite mountainous ingredient in the support of the plunge in well-liked international funding proposals became the inability of farmland on provide amid skyrocketing costs.

“The market is terribly tight,” he said.

“There are fewer transactions occurring but the price of those transactions has elevated somewhat dramatically.”

In holding with Core Good judgment data analysed by Elders, the median price per hectare of Australian farmland elevated by 18.4 per cent in 2021 to a listing $7,060 per hectare.

Mr Meares said of the transactions that were occurring, he’d seen an rising quantity of Australians procuring land originate air their house negate.

“Loads of Queensland remains to be very dry,” he said.

“So those cattle breeders in Queensland, whereas the markets are very valid, lack advertising and marketing alternatives.

“So just a few of them are getting into elevated rainfall areas. There is been somewhat a drift from Queensland into, express, northern New South Wales.

“Those folks are desirous to crop support their possibility and publicity, enlarge their advertising and marketing alternatives and safeguard their funding customarily.”

US tops international investor listing

Traders from the US are consistently main gamers in Australian agriculture, fishing and forestry and with $874.7 million price of funding proposals well-liked in 2020-21, they just true edged out Canadian investors ($818.5 million) to snort high keep on the well-liked international investor listing, by dollar price.

Chinese language investors came in at quantity three, with $645.5 million price of well-liked funding proposals.

The FIRB’s 2020-21 annual listing notes it became the first time in four years the agriculture, forestry and farming sector recorded the smallest stage of proposed international funding, by price, when when put next with other sectors.

As an illustration, with $5.8 billion price of proposed funding well-liked, the agriculture, fishing and forestry sector became effectively in the support of the business valid estate sector, which had $82 billion well-liked and the services and products sector, with $76 billion well-liked.

But whereas the dollar price of well-liked farm funding proposals became down, there own been 190 gains lodged in 2020-21, up from 174 the earlier 300 and sixty five days.

Mr Meares believed the stage of international funding in agriculture, by price, became seemingly to return to pre-pandemic phases in coming years.

Boundaries to entry

Foreign ownership of Australian agricultural land has long been a soft political subject and international investors must pay an application price earlier than they can assemble an provide on an Australian farm.

Charges beginning at $6,350 for properties price $2 million or less, rising to a maximum of $503,000 for purchases of extra than $80 million.

Foreign investors desirous to favor any agricultural land that can steal the entire price of their Australian farmland holding previous $15 million are furthermore field to FIRB scrutiny.

And since July 2015 all international investors in agricultural land own been listed on a register held by the Australian Taxation Space of job.

The register is no longer publicly on hand.