Demand for timber plantation land in Western Australia remains robust, fuelled by limited timber supply and strategic government initiatives. The long-term availability of harvestable timber resources is low, exacerbated by the Western Australian government's decision to end logging in native forests.
From 2024, timber harvesting in native forests is restricted to forest management activities aimed at improving forest health and clearing for approved mining operations, such as Alcoa’s bauxite mining along the Darling Escarpment in the South West, stretching from south of Perth to the Shire of Collie. This decision has intensified the need for alternative timber sources.
To address the timber shortage, the WA Government has allocated $350 million to establish new softwood plantations, predominantly pine, to secure a stable supply for the state's growing construction industry. Meeting this target requires up to 33,000 hectares of softwood plantation land, and acquisitions for these projects are already underway. Additionally, increasing investments in timber plantations for carbon credit generation have driven rural land values in the South West’s >650 mm rainfall belt to record highs. Many new plantings focus on pine trees (Pinus Radiata) and aim to support the construction sector.
Resurgence of Timber Plantations in Former Bluegum Areas
The collapse of some forestry-managed investment schemes between 2028 and 2010 left large areas of unproductive timber plantations in the South West, including thousands of hectares of unmanaged Tasmanian Bluegums. From 2010 to 2018, these surplus properties were difficult to sell and often acquired by mixed farming enterprises at discounted prices, reflecting the cost of rehabilitating the land for cropping and grazing.
Recently, however, demand for timber plantation land has surged. Former plantation properties are now highly sought after by timber companies for replanting. A small number of key players now dominate the market, fiercely competing for land. With no need for extensive rehabilitation, plantation companies can outbid mixed farming enterprises, pricing them out of the market for this type of land.
The Double Income Advantage of Timber and Carbon Credits
The dual income potential from timber resources and carbon credits have made plantation land an attractive investment. This has allowed plantation companies and investors to pay increased prices for rural land.
Land values have surged in areas such as Boyup Brook and Bridgetown Greenbushes Shires, known for mixed farming and timber plantations. Cleared plantable land increased from $5,000 - $7,000 per hectare in 2019-2020 to $12,000-$14,000 per hectare in 2024.
Community Opposition Balances Economic Drivers
Despite economic incentives, some local Shires and farming communities in these regions have opposed the conversion of cleared farmland back to timber plantations. They recall the negative impact on rural communities when timber plantations replaced farming operations in the 1990s.
The broader view of some balances this opposition, that plantation timber is a renewable resource that creates jobs and aligns with the government’s policy to secure timber supplies and address the growing demand for carbon credits.
Outlook for the Timber Plantation Market
Despite differing opinions on land use, there is widespread agreement that the competing demand for land from both farming and timber plantation interests will continue to drive strong demand and further increase land values in the short term.