News

Median prices of northern Victoria farmland increases by 9.1 percent

By Country News

The median price of Australian farmland increased 10.7 per cent in 2018, the fifth consecutive year of growth, according to Rural Bank’s annual Australian Farmland Values report.

South Australia (17 per cent), Queensland (15.7 per cent) and Victoria (14.1 per cent) all recorded a year of double-digit growth, while NSW (9.6 per cent) and Western Australia (3.8 per cent) also grew solidly.

In northern Victoria, the median price per hectare increased by 9.1 per cent in 2018 to $6314/ha. The region has achieved seven years of consecutive growth.

The municipality of Toowong recorded a significant increase of 90.4 per cent. In contrast, the median price per hectare in Loddon decreased by 15.4 per cent.

In 2018, the volume of transactions decreased sharply, down 15.6 per cent to 589. This is the lowest volume of transactions since 1995.

Tasmania was the only state to experience a decline in its median price per hectare in 2018, down five per cent compared to 2017.

While demand was strong for mid-sized cropping and grazing properties, the median was weighed down by weaker appetite for corporate level and smaller properties.

Across the longer term, Australian agricultural land values again proved their worth, with a national average annual growth rate of 6.8 per cent since 1998.

Rural Bank chief executive officer Alexandra Gartmann said the results again showed the long-term resilience of agricultural land as an asset class, overcoming challenging seasonal and drought conditions across large parts of the eastern seaboard.

‘‘The figures show the remarkable strength and confidence in agriculture’s future, with all states experiencing growth of between five and 7.5 per cent since 1998,’’ Ms Gartmann said.

‘‘Land values fluctuate significantly from year to year and are affected by an array of local, national and international factors.

‘‘Buyers are looking beyond seasonal and commodity cycles and investing accordingly, pushing up agricultural land value, particularly in holdings with access to reliable rainfall and water.’’

The report also highlighted — regardless of drought — the long-term downward trend of decreasing transaction volumes as agricultural land becomes more tightly held.

‘‘Keeping in line with the trend, we expect farmland values to continue to rise due to tightened supply of available farmland and increased competition for fewer parcels,’’ Ms Gartmann said.

‘‘While this is undoubtedly good news for owners of farmland, it has profound implications for those looking to get into the market, either via succession or new entrants to the sector.

‘‘Rural Bank’s Australian Farmland Values report provides an evidence base to enable discussions.

‘‘In this report, for the first time, we have taken a closer look at the behaviour of different parcel sizes over time and deeper analysis at a municipality level.’’

The annual Australian Farmland Values report tracks every Australian farmland sale during the past 24 years, providing detailed insight into farmland values across Australia.

The report drew on more than 255000 transactions accounting for 297.5million hectares of land.

■For more information, visit: www.ruralbank.com.au/australian-farmland-values