DROUGHT, low water allocations and a failing world economy have created havoc in the Riverina property market.

Agents are reporting a glut of rural and residential properties on the market, and Twynams' two properties Cobran and Mungadal have failed to sell after almost 12 months.

In Deniliquin, NSW, agents have 200 properties on the market, compared with the usual 60.

Riverina farmer and National Farmers' Federation water taskforce chairman Laurie Arthur said the Riverina was in dire straits.

"It is extremely difficult to farm this country without water," Mr Arthur said.

"Throw in the current economic climate and the situation becomes very challenging.

"I have moth-balled my seven holdings. Usually, I get 3500-4000 tonnes of grain. This year I got 190 tonnes, from 4000 acres (1620ha), and I went contracting.

"We have had plenty of dry years in the past, however we have always had irrigation water."

Murray Irrigation farmers have a 4 per cent allocation, while those on the Murrumbidgee have 14 per cent of their general security water.

With escalating residential real estate listings across the Riverina , Deniliquin Elders' Lester Wheatley said the market was in a bad state.

"This is the third recession-type market I have seen, and this is the worst I have seen it in the 35 years I have been an agent here," Mr Wheatley said.

"Inquiries have fallen by about 70-80 per cent here as jobs go - the abattoir closed and the rice mill closed 18 months ago - and the drought and negligible water allocation have combined to create the perfect storm."

Meanwhile, there are rumours that agribusiness group Twynam will shut the gates at its Cobran Station once its rice crop is harvested, while the future of its sheep property Mungadal remains in question.

Cobran and Mungadal are each rudderless, after the farm managers on each property reportedly finished up mid-way through last year.

The properties were put on the market last May, along with another Twynam property, Steam Plains, with a collective price tag thought to be $75-$80 million.

Twynam's 35,000ha Steam Plains property was sold mid-year to Paraway Pastoral, Macquarie Pastoral Fund's offshoot for a rumoured $25 million.

Twynam chief executive Christine Campbell did not return calls to The Weekly Times.

Sydney-based Food and Agribusiness Group were engaged by Twynam at the start of last year to sell the three Riverina properties.

Anthony Guiness, who is handling the sale, said "negotiations continue" on the sale of Cobran and Mungadal.

"We have two very interested parties, however no deal has been brokered at this stage," Mr Guiness said.

He would not comment on which property or properties the buyers were interested in.