Multibillion-dollar boost: Riverina land values hit 'unprecedented' level

The total land value for the Riverina increased by 8.7 per cent in the 12 months to July 1 2023, from $41 billion to $44 billion.

Murray saw a larger increase of 11.9 per cent from $27 billion to $30.5 billion during the same period.

Residential land rose in value 13.9 per cent in the Riverina - more than double the 6.6 per cent rise in neighbouring Murray.

Murray saw the biggest increases on rural and industrial land - 15.4 per cent and 18.5 per cent, respectively - which is becoming harder to come by.

These numbers are significant, because they are used to set rates, and land taxes for subsequent years.

Wagga property valuer Chris Egan said while this year had seen significant value increases, the compound affect of the last few years had created an "unprecedented" environment.

"We've seen over the last three or four years increases like that. There's been a cumulative larger increase of 50 per cent over the last three or four years," he said.

"It's still tracking up, but the valuer general's data is slightly old, and what we've seen is a levelling of rural land values over the last three months.

"People are sometimes shocked by how much it's increased, but the data is based on comparable sales, which is the fairest way to assess value."

Region-wide numbers like these can mask area, or local government outliers with higher, or more moderate increases.

In the 2023 financial year, areas of particular shortage saw meteoric rises in their land prices.

Residential land in Junee rose by 37.3 per cent, 22.6 per cent in Berrigan, and 23.1 per cent in Greater Hume.

Industrial land rose by 23.7 per cent in Albury, 43.1 per cent in Berrigan, and 54.3 per cent in Narrandera.

Mr Egan said persistent land price rises suggests Australian real estate remains attractive to institutional investors, who have helped drive higher rural property prices over the past few years.

While farmland taken on by investors is not always retained as a working farm, the end result is less property available, and higher prices for what remains.

Mr Egan said this highlights the need for developers and councils to work together on creating a greater supply of land, and reducing barriers to development.

"The market speaks. There are supply and demand issues, with lack of residential and lack of industrial," he said.

"My heart goes out to farmers ... it's hard when they're competing against overseas forces. But this is an international market now, not just a state or Australian market and we have to compete accordingly.

"We need a five, 10, 15 and 20-year plan so new blocks come online systematically over the next decades."

Mr Egan said he understands people's concern about price rises, but it is a sign of "the market at work".

Community land trust advocate Karl Fitzgerald agreed it was the market at work, but he said it was a sign of looking for solutions in the wrong places.

He said investor speculation was creating an environment where housing was being treated as a way to make money, not a place to live.

"Hopefully the added interest in the community was due to genuine home buyers rather than speculative property investors. From this, we expect that local residents gained access to the market," he said.

"However, it is likely that investor algorithms alerted them to the disparity with Wagga Wagga and they jumped into action, hoping to buy cheap and sell high.

"In time, more communities will have to find ways to prioritise housing options for locals first. This is where the role of community led development can help. Community land trusts are one such tool where locally accountable supply can be provided."

A recent proposal to charge AirBnB hosts additional fees to fund a local housing trust was shot down by councillors in October.