Undeveloped housing blocks around Wagga are in hot demand with new subdivisions selling within minutes of being placed on the market as residential land values climb across the Riverina.
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NSW Valuer General David Parker has recorded a "strong" 19.5 per cent land value increase across the Riverina, with agricultural and residential properties being the top performers.
Residential land within the Wagga City Council local government area (LGA) increased by 8.7 per cent last year, crossing the $4 billion threshold for total land value of that type.
Industrial land around Wagga increased in value by 12.3 per cent and commercial land value remained steady.
Dr Parker said there had been a moderate increase in Riverina residential land prices, driven by "growing interest in regional locations" from buyers.
Wagga independent valuer Chris Egan said there was ongoing demand for residential land around Wagga.
"What we saw the other day in Wagga was a 54-lot subdivision released at Gobbagombalin and it was sold in 15 minutes; the phones rang hot," he said.
"There's so much more pent-up increases in residential land values because there is a lack of it and such strong demand."
Rural land in the Wagga LGA had the fastest rate of growth at 17.9 per cent and also crossed the $3 billion threshold for total land value.
"There has been no asset class that has increased more than rural land in the past six to 12 months, it has been extraordinary," Mr Egan said.
"There's two separate markets competing for agricultural land: the mum and dad farmers who need to buy up blocks to expand and get economies of scale versus the corporates, including superannuation funds from other countries," Mr Egan said. "There are two forces competing against each other and driving prices up as there's a lack of supply and very strong demand."
Dr Parker said Riverina farmland prices saw a strong increase of 23.9 per cent, driven by "high commodity prices, low interest rates [and] favourable seasonal conditions".
NSW Farmers Wagga District Branch chairman Alan Brown said rising land values were a "double-edged sword" for farmers, with some taking on huge debts for their first property.
"It's very good for those looking towards retirement but not for those looking toward expansion ... we have had some good seasons and there's a rush to get into this area," he said.
The Valuer General's report covers the period from July 1, 2020 to July 1 last year, when the Riverina mainly saw zero COVID-19 cases and a time before the Delta variant lockdown and widespread Omicron infections.
Commercial consultant for Fitzpatricks Real Estate, Greg Howick, said Wagga was seeing an unusual pattern with industrial land prices going up but without a prior jump in demand for retail, office or hospitality properties.
"There's a lot of industries that are looking to relocate to Wagga due to costs and Inland Rail will make transport of goods to ports and capital cities much quicker and cheaper," he said.
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