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Property News

Rural rents under review

November 10, 2011

The disparity between land values and productivity rates is the focus of a new study that aims to bridge the gap between the rental expectations and earnings of Queensland's rural properties.

According to the chief executive of AgForce Rob Walker, annual rent increases on grazing lands could have an adverse impact on the viability of many farming businesses.

He stated: "The majority of grazing land in Queensland is leased by landholders from the government with farmers and graziers making annual rent payments based upon the unimproved value of the property."

In 2007 the state government put a cap on rate increases to ensure that they could not rise by more than 20 per cent per year - however that arrangement is set to expire in 2017.

Walker asserts that if market conditions continue along the same lines as they are and the unimproved value of the land continues to rise, rental values could increase by as much as 1,000 per cent "in some instances".

"That is going to be unsustainable - people have told us that if it goes to that figure, they will walk away because it will make their businesses unviable," said Walker.

Meanwhile a study headed by Professor Chris Eves from the Queensland University of Technology is looking into the alternative leasehold arrangements currently in place in New Zealand.

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