There has been phenomenal growth in the median price per hectare of Australian farmland. Over a 20 year period, the compound growth for farmland has been 7.5% across Australia. Despite flood, drought and a fluctuating economy, the value of farmland grows, making it an attractive investment choice.
Various factors are helping drive the price of farmland higher, such as a declining number of rural transactions which has tightened supply, strong demand for agricultural assets and increasing profitability thanks to low interest rates. However, Australians have still been reluctant to invest in farmland.
One of the reasons for this trepidation is the capital required – usually reserved for wealthy Australians or overseas buyers, the purchase of rural assets requires significantly higher capital than commercial or residential property.
However this is no longer the case.
Fractional property investment allows fresh investors to enter the market for as little as $1000. The fractional investment model that was launched by DomaCom aquires the land component of a rural property and leases it back to the farmer to run the land. Investors earn rental yields while farmers are given the opportunity to earn additional funds to retire debt or value-add via other farming activities.
The below article explains the fractional model and how it works, as well as highlighting recent examples of rural investments through DomaCom.