While housing, retail property and hotels have taken body blows due to coronavirus restrictions, the farmland sector is steering a steady course, helped by strong commodity prices, favourable seasonal conditions and rising demand for food security amid panic buying.
"The farmland market is yet to see any material impact [from the pandemic]," said Tom Russo, general manager of real estate at rural specialist Elders Limited.
"Agriculture is an essential service and will remain operational."
"Good seasonal conditions and favourable economic conditions for agriculture including strong soft commodity prices and low interest rates continue to drive activity and confidence," Mr Russo said.
While his team has implemented appropriate social distancing and safety measures, begun utilising technologies such as virtual farm inspections and adopted practical solutions like using multiple vehicles for physical inspections, he did not expect the pandemic to have any negative impact on farmland values.
"In fact, my view is that the significant drop in the Australian dollar will further fuel offshore investment and long-term confidence from domestic producers, based on the view that our agricultural output will be in high demand and globally competitive."
'Enormous demand for produce'
Angus Ingram, investments and partnerships manager at fund manager Kilter Rural, said adjustments for social distancing and hygiene had been implemented at its annual field tomato harvest "with minimal fuss".
"We’re socially isolating staff as best as practicable and ensuring we’re working with an utmost focus on operational hygiene.
"There is no sharing of utes or tractors and a regular regime of vehicle cleaning implemented.
"As growers of food and fibre, agriculture is firmly within the essential service bucket, something we don’t take lightly.
"We are in the middle of harvesting 80,000 tonnes of tomatoes and being a highly mechanised operation, it lends itself to a one vehicle-one person approach.
"With appropriate hygiene at changeovers this process has so far continued without a hitch," Mr Ingram said.
On the investment side, Mr Ingram said there had been an escalation in interest in its activities while at a customer level "we’ve already seen enormous demand for our produce as consumers focus on food and other non-discretionary items".
"As a result our offtake partners, food processors and mid-market food companies have been scrambling to meet demand from the retailers. There has, of course though, been a total drop-off in face-to-face meetings," he said.
Wheat prices are surging, driven by strong global demand. Andrey Rudakov.
He added that performance of Kilter Rural's wholesale funds had remained stable since the outbreak of COVID-19, and it had not received any redemption requests from investors to date.
Falling $A lures offshore investors
CBRE senior director of agribusiness, Col Medway, said it was "business as usual".
"We are working the phones, talking to vendors, potential vendors and negotiating with purchasers.
"We are pressing ahead with planned campaigns, with very few vendors deviating from their plans at this stage to go to market.
"Inspections are still occurring while remaining compliant with government advice.
"We are conducting inspections by 'caravan' with purchasers following in their vehicle, with communication via UHF radio and regular stops at vantage points and operational improvements, while maintaining social distance," he said.
On the investment front, Mr Medway said international investors have been engaged by the falling Australian dollar, which is making Australian assets look attractive.
"Domestic buyers will be mainly driven by livestock prices, crop prospects and rainfall," he said.
"We do not expect the pandemic to impact values. Livestock prices, crop prospects and rainfall will be more important factors.
Ray White rural managing director Stephen Nell said its agents were looking to replicate the success of its residential agents in the use of virtual inspections and auctions.
"On one significant Victorian property, a huge amount of effort has gone into the imagery and videography, so much so, it genuinely feels like you are there while watching it," Mr Nell said.
On the demand side, he said, it was "far too early to speculate on what the impacts will be as we’re still in the early stages of this issue.
"But what I can say is that inquiry numbers are still relatively good, given the uncertainty out there."
This article originally appeared in The Australian Financial Review on March 29th 2020.