An updated report on water market trends in northern Victoria is now available, providing important insights into the changes in how water is owned, used and traded and the factors impacting the price of water on the market.

This is an update to the previous Water Market Trends report released in February 2016. It analyses data from the Victorian Water Register on trends in the northern Victorian water market since 2001. This new report includes additional information on the changes observed since 2014-15, and on trade patterns between different water users in recent seasons.

The report shows that the largest proportion of high reliability water shares remain privately owned and linked to land. Since 2015, the proportion of entitlement not tied to land has increased to 12%. However, the data indicates that a lot of the water shares not linked to land are most likely held by farmers who regularly shift allocation to be used on their farms. Holdings by investors appear to be relatively small.

Where water is being used for irrigation is continuing to change. Water use in the Goulburn-Murray irrigation District has fluctuated significantly over the last ten years in response to seasonal conditions, commodity prices and water availability, while LMW diverters’ use has increased steadily since the Millennium Drought.

Market prices for water allocation have generally reflected water availability in the connected southern Murray-Darling Basin, and water availability in NSW has been seen to have a very strong influence on market prices in recent years.

In 2018-19, market prices have risen sharply due to drought in NSW and hot and dry conditions that have resulted in increasing competition for water to meet irrigation demands in the southern Murray-Darling Basin
Across northern Victoria, irrigators are now more reliant on allocation trade in the market and carryover to help meet their water needs.

Through reports like this, and by continuing to improve the information available on the Victorian Water Register website, the Victorian government is committed to providing water users with clear, accurate information to help them make informed decisions in the water market. The Department of Environment, Land, Water and Planning will be discussing the information in the report at a number of forums with water users over March and April including water corporation customer committees and other industry forums.

Further reports on water trading, including the Victorian Water Trading Annual Report are also available here, and up to date market data on the volume and price of water allocation trade is available here.