Rural Bank, Media Release, 17 October 2023

The Rural Bank Australian Farmland Values Report has tracked every farmland sale annually for almost three decades and is the longest running analysis of the farmland market in Australia. This special edition, supplemented by farmland sales data from DAS (Digital Agriculture Services), is a mid-year market update to inform vendors and purchasers about movements in transaction volumes and sale prices around Australia since the issue of the annual edition in May 2023.

This mid-year report finds that following a sustained period of strong growth, farmland is now more tightly held and prospective buyers are carefully reassessing land purchasing decisions. Australian farmland values now appear to have reached an inflection point with the median price of Australian farmland in the first half of 2023 just 0.1 per cent higher compared to a year earlier, marking a distinct shift from the previous four half-yearly periods and the fourth consecutive half in which transaction volumes have declined to the lowest levels seen in the past 28 years.  

Greg Kuchel, Rural Bank Senior Insights Manager said: “Farmland transaction volumes are the lowest in a generation as potential vendors sit tight and more caution is exercised by purchasers weighing up their options amidst a combination of falling commodity prices, drier forecast conditions and the prevailing view that interest rates will at the very least, hold around current levels for some time.

“While the overall national trend was a lack of growth in land values, median price growth in cropping regions generally kept pace with recent years as demand was sustained into early 2023 following another strong winter crop in 2022, with median values increasing in SA, Western Australia and NSW.

“In contrast, demand in grazing regions was weakened by declining livestock prices and far weaker median price growth in Victoria and the Northern Territory, followed by negative growth in Queensland and a dramatic decline in Tasmania, largely confined to the Northern region of the state.

“There are of course, markets within markets for property and in the Great Southern region of WA, median values reached record high growth of more than 50 per cent per hectare over the first half of 2023 driven by a sharp decline in supply and with solid growth recorded across most of WA – with the exception of the Southwest.

“South Australia was also a standout with the North recording the largest rise in median price per hectare nationally with more than 82 per cent half on half and more than 203 per cent growth year on year. The Yorke and Mid-North also performed strongly with both these regions recording some stellar numbers for half on half transaction volumes.

“Other regions to perform strongly were Victoria’s Mallee region at more than 46 per cent growth year on year, Western Queensland at more than 40 per cent and the New England & Northwest regions of New South Wales at more than 25 per cent”, Mr Kuchel concluded.  

State snapshots:

• NSW..

New South Wales was the only state to record growth from the second half of 2022 and has now overtaken Queensland to have the third highest state median value per hectare. NSW was up 14.9 per cent compared to the first half of 2022, and 12 per cent higher than second half of 2022 with median value driven higher by strong growth in New England & North West, Riverina Murray and the North Coast. Transaction volumes for a half-yearly period were also the lowest in the last 28 years. The median price per hectare of farmland in New South Wales continued to increase throughout the first half of 2023, with prices supported by this tightening of supply.

• Victoria…

Victoria saw more modest growth, but the most valuable farmland in Australia is still in Gippsland, at around the $25,000 per hectare mark. The median price per hectare in Victoria remained higher than a year earlier in the first half of 2023 – but fell from the record level of the second half of 2022. The Mallee was a particular highlight for growth up more than 46 per cent YoY, as was the Wimmera and Ovens Murray region with solid growth – but transaction volumes were down due to tight supply. 

• Queensland…

The median price per hectare for Queensland farmland fell in the first half of 2023 representing a year-on-year decline of 3.1 per cent and a 4.5 per cent fall from the last half of 2022. Prior to 2023, Queensland had experienced a four-year run of increasing median price. Notably, half of Queensland’s regions recorded half-year increases with declines in the other half. Western Qld recorded the largest increase to median price per hectare of any region and Central Qld the largest decrease – and Qld was also overtaken by NSW for the 3rd highest State median value per hectare.

• South Australia…

The Adelaide/Fleurieu region has the third most valuable farmland in Australia at $17,500/hectare and the state’s median price per hectare was 12.9 per cent higher year-on-year. The North SA region saw the largest rise in median price per hectare in Australia driven by a substantial rise in median prices across cropping properties in particular. Declining livestock prices are expected to weigh on the grazing property market over the back half of 2023 but in Murray & Mallee, values lifted to record levels over the first half of 2023. Half-yearly transaction numbers were also lower year-on-year, though were still the second highest recorded since 2017 – and the Eyre Peninsula median price also continued to trend higher.

• Western Australia…

Western Australia saw the strongest year-on-year growth in the first half of 2023 and all regions except for the Southwest posted year-on-year increases in median price. WA Farmland values have been on a strong upward trend in recent years with the state’s median price in the first half of 2023 up almost 170 per cent compared to the past 5 years. The first half of 2023 had the lowest number of transactions for a half-yearly period in a generation – the last 28 years. Tight transaction volumes were a consistent theme across all regions in WA with year-on-year declines in transaction volumes ranging from almost -20 per cent for the Great Eastern to -72 per cent for the Northern region. Values in the Great Southern region reached record highs over the first half of 2023 driven by a sharp decline in supply. And in Great Eastern WA, after posting two consecutive halves of declining values the region rebounded in the first half of 2023 with a new record median price.

• Tasmania…

North West Tasmania has the second most valuable farmland in Australia – but Tassie  still recorded a decline in the value of farmland in the first half of 2023 following an exceptional period of growth in the previous three years. The median price per hectare in the first half of 2023 was 24.7 per cent lower than a year earlier – a distinct shift from the previous three half-yearly periods which had year-on-year growth ranging between 15–33 per cent. Northern Tasmania’s median price fell dramatically in the first half of 2023, to its lowest point since the second half of 2019 but this decline likely reflects the low number of transactions that were recorded – being low-value grazing properties, rather than of an overall substantial decline in property values in Tasmania.