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Rural Bank reports decade of unbroken growth and heralds market shift in Australian farmland values

7 May 2024 |Media release

The 2024 Rural Bank Australian Farmland Values Report finds that Australian farmland values have now recorded a full decade of unbroken growth. While 2023 saw a rise in the national median price, capping off an extraordinary period for farmland values, it also marked a shift in the market as the pace of growth slowed considerably.

“The key drivers of farmland values look set to remain in a holding pattern in 2024. It is increasingly likely that the market will now see a plateau in farmland values,” said Rural Bank Head of Agribusiness Development, Andrew Smith.

The Report shows the past 10 years have seen the national median price for Australian farmland triple, rising by 201 per cent at a compound annual growth rate (CAGR) of 11.6 per cent. This rate of growth is well ahead of the longer-term 20-year CAGR of 8.4%.

The national median price per hectare increased by 6.4 per cent in 2023 to $9,575/ha, marking the tenth consecutive year of growth, but also the second-lowest year of growth across the decade.

“While rural property remained very much in demand, record low supply helped push farmland values to new record highs in 2023 with many regions experiencing exceptional growth in values, particularly in Western Australia,” he said.

‘West side story’ as stellar growth sees WA top the charts

Western Australia has become the national leader in farmland value growth. Median price growth of 32.6 per cent in 2023 has helped the state boast a five-year CAGR of 25.6 per cent, followed by Victoria with a CAGR of 17.2 per cent.

“A continuing tightening in the number of transactions is helping to drive price growth across the nation’s 39 regions with 44 per cent recording growth of more than 20 per cent in 2023. With eight of the top 10 growth regions in 2023 recorded in Western Australia, South Australia or Tasmania,” Mr Smith said.

Mr Smith said a handbrake on demand for farmland in grazing regions was the scale and speed of the decline in livestock prices in 2023, eroding confidence in those industries.

“In addition to lower commodity prices, generally drier conditions also acted as a headwind to demand,” he said.

Better than expected summer rainfall, coupled with the forecast of climate drivers returning to neutral settings during autumn and winter has improved sentiment for 2024.

“While this may not necessarily renew strong demand for land purchases, it should mean that landholders feel less pressured to sell farmland for the time being, keeping supply of farmland on the market relatively subdued.”

“As a result, values are expected to proceed through what we see as a period of stability as farm businesses focus on consolidation after recent years of expansion.”

Farmland transactions in 2023 equated to a total of 6 million hectares of land traded at a combined value of $14.5 billion.

“To put this market activity into perspective, the total number of hectares of Australian farmland sold in 2023 equates to an area similar in size to the US state of West Virginia”, Mr Smith concluded.

Download the full 2024 Rural Bank Australian Farmland Values Report

About Rural Bank

Rural Bank is a division of Bendigo and Adelaide Bank Limited and provides exceptional financial services, knowledge and leadership for Australian farmers to grow.

The longest running analysis of the farmland market in Australia, the Rural Bank Australian Farmland Values Report has tracked every farmland sale annually for almost three decades and provides detailed market information from a national to a local level.

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