Agricultural strength makes rural land a solid investment
A host of recent developments are set to increase the popularity and importance of rural properties across Australia.
A recent IBISWorld report states that Australian agriculture will grow by 5.7 per cent between 2014 and 2019. Australia's agricultural sector is already doing well, generating a revenue to $67.3 billion, or 3 per cent of GDP. This growth will push that total to $71.1 billion, giving it a larger share of the national economic pie. This will make what is already highly desirable rural real estate for its natural features even more coveted.
"Australia is very well placed to take advantage of our highly productive soils, efficient farming practices and geographic position on the doorstep of Asia," said IBISWorld Australia General Manager Dan Ruthven.
Hydroponics, organic farming and free trade agreements, oh my!
What will account for this growth, says IBISWorld, are hydroponics, organic farming and recently signed free trade agreements. The growth of the first two in particular underline the potentially lucrative nature of farming in Australia.
Hydroponic farming practices generated $905.9 million in 2013 for the agricultural sector, a figure which grew to $933 million in 2014, a 3 per cent increase. They're expected to make a 23.1 per cent increase over the next five years, generating a total of just under $1.2 billion by 2019. This is due to issues such as water shortages, which will only be exacerbated by global warming.
Similarly, organic farming made a total of $589.4 million for farmers in 2013, and grew a substantial 11.2 per cent to $655.3 million this year. This exponential growth is predicted to continue, generating an expected 49.6 per cent more in 2019 - just under $1 billion.
The rise of health consciousness, environmental concerns and organic food's increased convenience has made organic farming one of the economy's best performing agricultural industries, says IBISWorld. Indeed, at 12 million hectares, Australia has the largest global share of organic farmland.
On top of this, free trade agreements with Japan and Korea have opened up new markets for Australian agricultural products.
Rural land a safe investment
With agriculture set to grow by leaps and bounds in the coming years, a land investment now could pay dividends in the future.
At 2.13 hectares per person, according to the World Bank, Australia has the most arable land by far in the world. It has 68 times more than Japan and four times that of the United States, Asher Judah said in a July 1 report. This means the sector is likely to stay strong for an indefinite amount of time in the future.
Check in with LJ Hooker to see if you can get yourself a prime piece of rural property.