Article by: Hari Yellina
In 2020-21, the Foreign Investment Review Board (FIRB) authorised $5.8 billion in planned foreign investment in Australian agriculture, fishery, and forestry, down from $8.3 billion the previous year. Chris Meares, a long-time rural property specialist in New South Wales, believes the drop is mostly due to the COVID-19 outbreak. “I believe the incapacity [of foreign investors] to freely travel across the world [to inspect homes] has had a significant impact,” he said. He believes that the dearth of available farmland, combined with increasing prices, is another major factor in the reduction in accepted foreign investment applications. He stated, “The market is quite tight.” “Though there are fewer transactions, the worth of those transactions has increased significantly.”
According to Elders’ analysis of Core Logic data, the median price per hectare of Australian farmland climbed by 18.4% in 2021, reaching a new high of $7,060 per hectare. Mr Meares said he’d witnessed an increase in the number of Australians buying land outside their home state in recent deals. He stated, “A lot of Queensland is still quite dry.” “While the markets are strong in Queensland, cattle breeders have limited selling alternatives. “As a result, some of them are relocating to locations with higher rainfall. “Those folks are wanting to limit their risk and exposure, enhance their marketing possibilities, and secure their investment in general,” says one resident of northern New South Wales.
US investors are consistently significant players in Australian agriculture, fishing, and forestry, and with $874.7 million in investment proposals approved in 2020-21, they just edged out Canadian investors ($818.5 million) to take the top spot on the approved foreign investor list, by dollar value. With $645.5 million in approved investment proposals, Chinese investors were ranked third. According to the FIRB’s annual report for 2020-21, agriculture, forestry, and farming had the lowest level of proposed foreign investment by value compared to other sectors for the first time in four years.
Despite the fact that the financial worth of approved farm investment projects fell, 190 applications were submitted in 2020-21, up from 174 the previous year. Mr. Meares predicted that, in terms of value, foreign investment in agriculture would recover to pre-pandemic levels in the coming years. Foreign ownership of agricultural land in Australia has long been a contentious political issue, and foreign buyers must pay an application fee before making an offer on a farm in Australia. Fees start at $6,350 for properties worth less than $2 million and go up to $503,000 for properties worth more than $80 million. Foreign purchasers aiming to buy any agricultural land in Australia that will increase the total value of their farmland holdings above $15 million are in high demand. And, since July 2015 all foreign investors in agricultural land have been listed on a register held by the Australian Taxation Office. The register is not publicly available.