When to buy land is always a contentious question.

The answer is invariably – it depends.

For tightly held areas where opportunities rarely come up, the answer will normally be yes.

We have seen an example of this recently in the Lower North.

Every district has more enviable farms that, for distinct reasons, are above the district average, usually because of superior soil types.

We have the lens of history to look through to see how capital growth has played out in the past.

In my memory, there have been three long-run cycles of rural property values.

Values have flattened out over the past 12 months or so, but this is off an extraordinary run for the previous 5-6 years.

If history is a guide, we may be in for a period of flat growth.

I cannot help but think that the last increase in values was partly driven by the economic stimulus post-Covid and historically extremely cheap money.

Those who loaded up with debt at the time and bought property have been handsomely rewarded with capital growth.

Some people have said they cannot wait for the cheap money to come back; this would be a double-edged sword, as the rates at the time were artificially low and had never been at those levels.

If rates were at these lows again, it would probably be because of economic turmoil; not good for anyone.

Some business owners were locking these levels of interest payments into their long-term forecasts.

This approach was fraught with danger, as when the wheel turns, as it always does, those operations can be left exposed.

Budgets should be put together using decile five pricing unless there is a good reason not to do so.

Many farmers are conservative in nature, and this is a good trait to have in farming, but I have seen many farming operations that frame conservative budgets, and I remind them that when the bank gets hold of the budget, they sensitise it further, and this may mean the difference between approval or not.

Being realistic with your budgets is the message.

Leasing is another part of the puzzle.

In some districts, such as the Yorke Peninsula, leasing is common; in other areas, leasing is the exception.

When given the choice of leasing or buying, the farming business needs to know the “why”.

On straight economic terms, leasing normally makes more business sense.

But if you are looking to build up generational assets, buying may be the go.

I have never seen a farmer look back over time and say they paid too much for a block of land as, invariably, it has increased in value markedly over time.

Passion for what you do goes a long way and should be taken into consideration when deciding whether to buy or not.

It pays to be discerning with expansion plans, then be comfortable with the decision made and not become caught up in the what-ifs.