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The robust nature of the water market was on full display on Wednesday when two mixed farming operators from Wee Waa each paid more than $10 million to secure licences in the Namoi River.
Topping the sale at $6355 per megalitre was a 1944ML general security licence in the Lower Namoi, amounting to $12.354m.
The offering drew the interest of three bidders, who placed a total of 142 bids from the reserve price of $5455/ML.
The second offering, a 2214.5ML supplementary Lower Namoi A class licence, was purchased with one bid of $5255/ML to equal $11.637m.
The third water licence on offer was 50ML of zone one Lower Namoi groundwater, purchased by Walgett producers for $5540/ML.
Temporary water was also offered, with all three lots accounted for by another purchaser from the Walgett district.
Totalling 2000ML of general security water, the successful bidders paid $205/ML.
Selling agent Michael Guest, Rural Property NSW, said the strong competition was no surprise.
“Water has been strong for a long time, there’s good demand out there and all went to local irrigators,” he said.
“The temporary water, at different times in a drier climate, might have made more, but it’s been a reasonable season and we’re coming to the end of it.
“The supplementary also could have made a little bit more, but the general security and zone one Lower Namoi sold to very strong values.”
Water values in the Namoi River are now two to three times higher than they were 20 years ago.
Moree Real Estate valuer Paul Kelly said if $6355/ML isn’t a record price, it would be ‘pretty close’ to the top of the market.
“Water is a limited resource and licences are coming up less and less, so bigger growers are aggregating them together, is how we see it,” he said.
“The dormant licences that were parked around the place and not being fully used are getting less as time rolls on, and people continue to buy water to secure up what they’ve got.”
With demand for water continuing to outstrip supply, and the Bureau of Meteorology this week declaring La Niña has ended, the water market is expected to only get firmer from here.
“We’ve just come out of a wet season, so typically as it gets a bit drier, the market gets a bit stronger,” Mr Kelly said.
“There’s now a 50 per cent chance of El Niño in 2023, so if it stays a bit drier as they’re predicting, the markets will continue to firm up.
“It will be interesting to see what happens going forward, but it seems to be pretty robust.”
The sale, which was interfaced by AuctionsPlus, achieved a 100pc clearance rate and grossed just shy of $25m.
There were 13 registered bidders, and 1719 catalogue views.
