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Land Prices
Tasmania has traditionally had lower land prices than comparable dairy areas in Victoria and New Zealand.
During 2005 and 2006 there was a substantial increase in dairy land prices in Tasmania due to the buoyancy of the dairy industry and to relatively low interest rates. There has also been strong competition for land for forestry plantation developments.
The table below summarises some dairy farm land sales in Tasmania over the past two years.
Dairy Farm Sales
Dairy farm sales
| Year | Number of farms | Average Area | Overall average fprice1 | Bare land value2 ($/ha) | ||
|---|---|---|---|---|---|---|
| Hectares | Total | Per Hectare | Dryland per Hectare | Irrigated per Hectare | ||
| 2005 | 14 | 480 | $2,492,000 | $8,900 | ||
| 2006 | 16 | 119 | $1,572,000 | $13,400 | $9,700 | $11,900 |
1. Total farm value divided by total area.
2. Total farm value less the value of improvements and non-productive area
Source: Esk Valuation Group
Most dairy farm sales in 2005 and 2006 were in the Far North West and North West regions, with the remainder in the North and North East.
The lower average per hectare price in 2005 ($8,900/ha) was in part due to the sale of several large properties in the North East at relatively low per hectare prices. These also properties boosted the average total area and price in that year. Without these farms the overall average per hectare price in 2005 was around $10,400 per hectare compared with the $13,400 per hectare in 2006.
In 2006, higher prices were paid for farms in the Far North West (Circular Head) region than in the North West and North East where other sales occurred. In the Far North West the average bare land price for dryland area was $10,900 per hectare compared to $8,200 per hectare in the North West. Irrigated area was about $2,000 per hectare dearer in both regions.
Potential Dairy Conversion Farm Sales
There is potential in Tasmania for non-dairy farms to be converted into new dairy farms. These may be larger-scale beef or cropping farms in the higher rainfall areas. Alternatively they may be in the lower-rainfall areas but have access to a plentiful supply of irrigation water. The table below summarises a number of such sales in Tasmania over the past two years.
Potential Dairy Conversion Farm Sales
| Year | Number of farms analysed | Average Area | Overall average price1 | Bare land value2 ($/ha) | ||
|---|---|---|---|---|---|---|
| Hectares | Total | Per Hectare | Dryland per Hectare | Irrigated per Hectare | ||
| 2005 | 13 | 957 | $3,243,000 | $5,800 | $5,000 | |
| 2006 | 3 | 577 | $3,867,000 | $6,500 | $4,700 | $6,500 |
1. Total farm value divided by total area
2. Total farm value less the value of improvements and non-productive area
Source: Esk Valuation Group
In addition to the three potential dairy conversion farms analysed in 2006, there were a number of non-dairy farms added to existing farms - particularly in the North East. These averaged $11,100 per hectare overall or $8,900 per hectare on a bare land (no improvements) basis for dryland pasture area.
