And while real estate agents are surprised there has not been more interest from regions that have felt the pain of severe drought and water restrictions – particularly the Riverland and Lower Lakes – they have been encouraged by a number of recent transactions.

"There hasn't been that avalanche we might have expected, but it might be like sheep to water," Naracoorte First National director Brian Edwards said.

He recently sold 129 hectares at Neuapurr, near Frances, for $6240/ha. It had no water allocation and a three-bedroom, timber-framed home and large shed, but met with strong bidding from "all locals" at a full Minimay Hall. And a nearby dry swamp block went for $1753/ha.

"It's not all doom and gloom – people in the region are still prepared to pay for good country," Mr Edwards said.

But he believes a new wave of producers are starting to "look out of the square", no longer content to just fatten sheep on productive land. They were looking for a better return with more efficient use of water.

"We're starting to get some interest from the potato industry, but the market is just a bit hard to call at the moment."

The demise of managed investment schemes and the requirement for all future blue gum expansion in South Australia limited to land with water allocations have also thrown up a new dynamic.

* Extract from a full report in Stock Journal, December 18 issue.