FTA could push up Australian farm values by 15%

Media release - 19^th November, 2014

Leading real estate group Raine & Horne says the announcement of the China–Australia Free Trade Agreement (ChAFTA) has the potential to inflate farm values across Australia by 15% almost immediately.

Andrew Tout, Co-Principal of Raine & Horne Rural Sydney, said the ChAFTA, which has the potential to inject $18 billion into the Australian economy over the next 10 years, will drive up land values, simply because it will dramatically increase the viability of those farms producing agricultural commodities through increased competition and reduced price volatility.

“Long-term the ChAFTA will also help reduce the numbers of distressed asset sales in the rural sector.

“The ChAFTA is great news for beef, dairy, sheep and wool and the primary producers who operate at the coal face of these industries,” said Mr Tout.

“However the ChAFTA will indirectly help inflate the values of properties in industries that appear to have missed out this week. For example, it’s fair to expect that demand for beef farmers will have a positive flow-on effect to other commodities such as the feed grain industry and underpin the values of the properties involved in these industries.”

“Australia already produces 57% of China’s imported beef, so the reduction in tariffs currently ranging from 12% to 25% is great news for domestic farmers and for the value of their properties,” added Mr Tout, who recently led a number of trade delegations to China.

The delegation of Australian farmers visited wet markets for beef, lamb and fish as well as wheat mills producing flour and barley malting and sorghum factories in cities such as Guangzhou, Jinan, Shanghai and Qingdao.

“The Chinese producers overwhelmingly made it clear that they want to get closer to Australian farmers and are looking for the key points in the supply chain across all commodities as they want high quality products,” said Mr Tout.

“The Government demands local producers use a quota of local product, barley, wheat, sorghum and so on, which they top up with quality grains from Australia.

“Demand for Australian grain in China is generated because we have the best farmers in the world and the best product across all agricultural commodities.”

-ENDS-

For further media information please contact:

Andrew Tout, Co-Principal Raine & Horne Rural Sydney on 0428 277 233

Andrew Harrington, National Communications Manager, Raine & Horne on 02 9258 5400