The Foreign Investment Review Board (FIRB) approved $5.8 billion worth of proposed foreign investment in Australian agriculture, fishing and forestry in 2020-21, compared to $8.3 billion the year before.
Longtime New South Wales-based rural property specialist Chris Meares believes the dip can largely be explained by the COVID-19 pandemic.
"The inability [of foreign investors] to move around the world freely [to inspect properties], I think has had a huge effect," he said.
He believed the other big factor behind the drop in approved foreign investment proposals was the lack of farmland on offer amid skyrocketing prices.
"The market is very tight," he said.
"There are fewer transactions occurring but the value of those transactions has increased quite dramatically."
According to Core Logic data analysed by Elders, the median price per hectare of Australian farmland increased by 18.4 per cent in 2021 to a record $7,060 per hectare.
Mr Meares said of the transactions that were occurring, he'd noticed an increasing number of Australians purchasing land outside their home state.
"A lot of Queensland is still very dry," he said.
"So those cattle breeders in Queensland, whilst the markets are very strong, lack marketing options.
"So some of them are moving into higher rainfall areas. There's been quite a flow from Queensland into, say, northern New South Wales.
"Those people are looking to reduce their risk and exposure, increase their marketing options and safeguard their investment generally."
US tops foreign investor list
Investors from the United States are consistently significant players in Australian agriculture, fishing and forestry and with $874.7 million worth of investment proposals approved in 2020-21, they just edged out Canadian investors ($818.5 million) to claim top spot on the approved foreign investor list, by dollar value.
FIRB- approved investments in agriculture, forestry and farming in 2020-21. | |
|---|---|
United States |
$874.7m |
Canada |
$818.5m |
China |
$645.5m |
United Kingdom |
$518.8m |
Netherlands |
$292.2m |
Singapore |
$186m |
Korea, Republic of (South Korea) |
$177.7m |
Japan |
$81.4m |
Hong Kong |
$76.8, |
Germany |
$65.7m |
Switzerland |
$48.3m |
South Africa |
$25.6m |
Cayman Islands |
$24.1m |
United Arab Emirates |
$17.7m |
France |
$16.8m |
New Zealand |
$6.5m |
Sweden |
$2.3m |
Other countries |
$388.8m |
Source: FIRB annual report 2020-21. The FIRB places caveats on republishing this data, which can be found in Appendix B of its report | |
Chinese investors came in at number three, with $645.5 million worth of approved investment proposals.
The FIRB's 2020-21 annual report notes it was the first time in four years the agriculture, forestry and farming sector recorded the smallest level of proposed foreign investment, by value, compared to other sectors.
For example, with $5.8 billion worth of proposed investment approved, the agriculture, fishing and forestry sector was well behind the commercial real estate sector, which had $82 billion approved and the services sector, with $76 billion approved.
But while the dollar value of approved farm investment proposals was down, there were 190 applications lodged in 2020-21, up from 174 the previous year.
Mr Meares believed the level of foreign investment in agriculture, by value, was likely to return to pre-pandemic levels in coming years.
Barriers to entry
Foreign ownership of Australian agricultural land has long been a sensitive political topic and foreign investors must pay an application fee before they can make an offer on an Australian farm.
Fees start at $6,350 for properties worth $2 million or less, rising to a maximum of $503,000 for purchases of more than $80 million.
Foreign buyers looking to buy any agricultural land that would take the total value of their Australian farmland holding beyond $15 million are also subject to FIRB scrutiny.
And since July 2015 all foreign investors in agricultural land have been listed on a register held by the Australian Taxation Office.
The register is not publicly available.
