THE values of Goulburn Valley irrigation properties offered for sale are being affected by the amount of delivery shares attached to them.
Former local farmer and now licensed rural estate agent for Youngs and Company in Shepparton, Paul Durden, says some potential buyers have baulked at buying a property with too many delivery shares attached to it.
To divest a property of water delivery shares could cost thousands of dollars depending on where the property was located Mr Durden said.
Water delivery bodies such as Goulburn Murray Water operate a delivery share scheme where farmer’s pay for a delivery share allocated to their property that will allow them access to an amount of water over the annual 270-day irrigation season.
For example, a property with a 1 megalitre daily delivery share is entitled to a 270 megalitre allocation over the September 15 to May 15 annual irrigation season.
How the Goulburn Valley water delivery share scheme works
This water delivery share system began operation five years ago and will run for 15 years Mr Durden said.
He said when the scheme began, and water delivery shares were first allocated to a property, the amount allocated was based on the property’s current water usage.
He said former dairy properties that were previously allocated with a high number of delivery shares are harder to sell now as a higher number of shares were unnecessary for other land uses, such as hobby farms.
He said the equation applied to calculate what a property owner must pay to divest a property of a delivery share was based on the number of years the daily delivery scheme had left to run multiplied by the cost of the delivery share.
He said the cost of a delivery share varied according to the area a property was located but currently a 1 megalitre daily delivery share in the Katandra-Invergordon area was worth about $4500; around Tatura the cost was between $3300-$3600 and in the Katamatite-Cobram region a daily delivery share was worth between $2800-$3000.
Mr Durden said he had advised a client in the Katandra-Invergordon area that one way to drop the sales price of their property with its 4.5 megalitre daily delivery shares was to pay out two of the delivery shares rather than include them in the overall sale price.
He said if the client followed this course they would have to pay about $90,000 to divest the property of two delivery shares (10 years multiplied by $4500 per megalitre delivery share).
-Story written August 2011.