SOLDBEFORE AUCTION
Multi Tenanted Commercial Investment
AUCTION - LIVE & ONLINE
Tuesday, 8th April 2025
Rowes Precinct, 48-60 Russell Street, Toowoomba QLD 4350
Andrew McCallum | 0427 581 889
Shay Woods | 0428 150 332
Let’s hear from the experts!
2025 Year In Advance
Our previous newsletter comments reflected on the year that was and it felt like there was plenty to discuss, though a lot of the themes remained consistent throughout 2024. Interest rates, input costs, normalised farm gate prices and high land values continue to be at the forefront of discussions and with Donald Trump's inauguration Tariffs have joined this chorus. A number of these factors, while receiving plenty of media time, are unlikely to see any significant or meaningful changes to our local property market in the short term.
Certainly interest rates (or more specifically the cash rate), if changing at all, will not change so significantly to greatly affect the viability of businesses and personal budgets. That said, a number of recent personal experiences indicate capacity to access sharper interest rates (at least for farm business loans), if you take the opportunity to shop around or discuss your current rate with your existing lender. Many landholders will have access to a significantly strengthened land to value ratios thanks to the growth in the property market in recent years. This stronger equity position can be very useful in negotiating a lower interest rate. To generalise where a rural property was purchased 10 to 15 years ago market growth in the order of 300 to 400% is not uncommon. An independent rural property valuation by HTW will be your first step to access a stronger equity position and realising more competitive interest rates.
A number of recent transactions on the Darling Downs are showing a case of market catch up, with regard to values expressed by prime cultivation and irrigation, where further growth is evident from sales analysed 12-18 months prior. This appears to be a case of correcting narrowed margins from grazing property to those prime cultivation properties. Where the grazing market has seen a greater rate of growth in recent years, hence, previously narrowing that margin.
Moving through the 2025 calendar year we expect continued peaking market conditions to remain prevalent. Southern Qld and Northern NSW appears to be benefitted by strong interstate migration which continues to support strong residential and rural lifestyle market values. Through relativity this is also helping to prop up the rural market, particularly where these rural properties are benefited by proximity to major centres. Our valuation teams in the southern states, are indicating weaker market conditions with some rural property markets now either stable or reflecting a softening from the peak of up to 10%.
https://htw.com.au/state/queensland/
Interest Rates
Interest Rates & Banks
Well, based on a lot of economists views it appears rates are finally on a downward trajectory with the majority predicting the RBA will reduce their target cash rate at their next meeting on Tuesday the 18th February. The biggest question is probably what the size of the reduction will be. Lower market rates are one thing, but what about the other “costs” that make up an interest rate. Besides, I doubt very much a reader is paying 4.35% p.a. interest??? What else is a bank’s interest rates that brings the rate up to 6.50% p.a. for example.
Bank Funding Costs
On top of the market rate, a bank will apply its own funding costs. That is the costs it incurs to raise the capital to provide the loan. Predominantly these are sourced from domestic bank deposits (between 60% and 70%) and the balance from institutional investors and international wholesale markets (between 30% and 40%). As the RBA reduces their rates, so to do banks reduce their term deposit rates on savings. This in turn lowers the costs to raise funds, and therefore, lower bank funding costs. But in an environment with a lower AUD/USD near 62c, will lower interest rates here in Australia lead to a transfer of investment capital to markets such as the US where the interest rate is on hold and is viewed as being less volatile. This can increase a bank’s funding costs and negate any benefit from a lower interest rate.
Customer Margins
Banks also build a customer margin into their pricing, which is basically a price based on the level of riskiness you are to defaulting on your loan repayments. The higher the risk you are, the higher the margin that is charged.
Fees
Banks often a charge a fee based either on the limit of your loans (referred to as a Line Fee) or calculated on any undrawn balance within your limits (referred to as an Undrawn Limit Fee). I won’t go into the specific differences, however, these result in a higher borrowing costs and are somewhat overlooked when banks discuss interest rates.
AUD Comment
The AUD has taken somewhat of a hammering in recent months, having lost approx. 10% since Sept 2024. The threat of US tariffs and a looming trade war with China would impact our exports to both the US and China and has likely been a catalyst to a lower AUD. Should the RBA reduce interest rates further to closer to 3.50% as has been forecast, will this put additional pressure on the AUD therefore increasing import costs and be inflationary in itself. If the RBA reduces their rates and hint there is more to come, will this cause a transfer of funding by international markets from Australian banks to US banks for a higher return. Should this occur, banks may find themselves having to pay above market rates to retain and attract new capital from international markets, thereby increasing funding costs. It’s a balancing act, whichever you look at it.
If you want to learn more about your funding position and gain a little market intelligence, I’d love to have a talk. Please do not hesitate to call.
“Savannah & Harms Block”, MT ABUNDANCE
1,252.6 Ha | 3,098.1 Ac FOR SALE
$4,500,000
194.58 Ha | 481 Ac (Freehold)
“Mountain View”, KUMBIA FOR SALE
$2,400,000
Craig’s Welding & Tyre Service, MEANDARRA FOR SALE
$700,000 Plus SAV
Upcoming Clearing Sale
Sale Includes:
GDL South Burnett Region Surplus
Machinery & Equipment Auction
Bidding Starts: Thursday 20th February, 12pm
Row Janke Bros planter
4 row cultivator
Hammer Hill mixer
Napier Grasslands 725 offset
Bordin 3 tonne feed bin
Rotary hoe
Fertiliser grouper bin
Crushers
John Deere hydraulic quick hitch
Diamond harrows
Plough
Harvester
Silos
Motorbike
Mower
Alternator
Cattle Crush
0428787101
ChrisNorris
LesterCalvert 0447711505
RyanSullivan
0407176062
BradCavanagh
0428176062
Upcoming Clearing Sale
49 Joskeleigh Road, Keppel Sands
Saturday 22nd February, 10am (gates open 8am)
2020 Isuzu FRR 107-210 tipper with cattle crate
Hercules HE600 loader, 4 in 1 bucket, rippers, forks, bucket
Kubota KX 161-3 5 ton excavator with numerous attachments
Kioti Mechron 2200 side by side
2008 Ford Ranger single cab with alloy tray
Komatsu 25 forklift 2.5 ton
Berends grader attachment
Miller bobcat 250 welder, 25hp, fitted on a 7x4 box trailer
BE industrial series compressor 15HP, 145 PSI, Honda GX390, fitted on a 6x4 box trailer
2000L Silvan tank fitted with a Honda pump on a dual axle trailer
Concrete mixer attachment for tractor
800L Diesel tank with electric pump fitted on a 6x4m box trailer
400L Diesel tank with electric pump
Sea Jay 4.35M SP side console boat with 60hp mercury GT motor
Massive range of workshop equipment
Important Update
ATO CHANGES WHEN SELLING PROPERTY
**Thisappliesto ALLPROPERTY contractssigned onorafter1January2025**
All property transactions
All Australians
Has changed from $750,000 threshold to any property sold
Talk to your solicitor so you’re not affected at time of settlement, causing possible money withheld
To find out more about Foreign Resident Capital Gains Withholding (FRCGW), and understand how this affects every seller CLICK HERE
Blackall
Crows Nest
Dalby
Emerald
Gracemere
Kingaroy
Nebo Roma
Sarina
Alice Springs
Prime & Store Sale - Thursday
Weaner & Store Sale - Monthly
Monthly - Saturday
Wednesday
Thursday Wednesday
Monthly
Monthly - Friday
Store Sale - Tuesday
Friday Fortnightly
Annual Sale
Andrew McCallum | Real Estate Manager/Director 0427 581 889
Nick Dunsdon | Cunnamulla
Rhys Hebberman | Darwin
Tim Maguire | Emerald
Owen Brockhurst | Miles
Tony Lilburne | Quilpie & Dalby
Bill Reid | Rockhampton
Dan Tyson | Rockhampton
Rick Benham | Roma
David Benham | Toowoomba
Recipe:
Mars Bar Slice
THE PERFECT SWEET TREAT
INGREDIENTS:
75g (1/ 3) butter
150g Mars Bars chopped
1 tablespoon (20g) golden syrup
3 cups (90g) rice bubbles or any puffed rice
250g (1 2/3 cups) milk chocolate
1 tablespoon (20g) coconut oil or vegetable oil (optional)
INSTRUCTIONS:
1. Melt the butter, 100g (two thirds) of the Mars Bars and golden syrup on low heat in a saucepan (or in 30 second bursts in the microwave on 50% power). Please note: the Mars Bars will not completely melt. Mix until the butter and golden syrup are smooth.
Grease and line a 18cm X 22cm rectangular slice tin with baking paper and set aside.
2. Stir through the rice bubbles and the remaining Mars Bar (chopped).
3. Press mixture very firmly into the prepared tin.
4. Place milk chocolate and coconut oil/vegetable oil in a heatproof bowl. Microwave on medium for 3 minutes, 50% power, or until just melted, stirring every 30 seconds with a metal spoon. Stir until smooth.
5. Spread over slice and refrigerate until firm (a minimum of 3-4 hours - or best overnight).
7.
6. Remove slice from the refrigerator about 30 minutes before cutting into squares with a warm serrated knife.
