Port in a Storm: Australian Ag Land Prices Will Remain Afloat in Rough Covid-19 Swell
Prices of Australian ag land will largely hold firm during 2020, despite a severe global recession that has caused, and will continue to cause, significant depreciation in most global and local asset classes, according to Rabobank’s report, ‘Port in a Storm.’
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“We expect that ag land will remain largely unscathed for three reasons: (1) farmers will remain profitable during 2020; (2) few properties will be available for purchase; and (3) other fundamentals, such as a low cost of funds and a weak Australian dollar, will be supportive,” according to Wesley Lefroy, Agricultural Analyst.
“However, we note that the market outlook remains more uncertain than usual, with risks weighted to the downside. Events that would worsen the outlook for land prices include a deeper-than-expected global recession, a credit crisis, or a significant interruption to Australian access to major offshore export markets.”