Australian farmland values recorded solid annual growth, despite a slight dip in the first half of 2024, with the median price of farmland now sitting at $10,141/ha.
According to Rural Bank’s Australian Farmland Values Mid-Year Update, the national median price slipped just 0.1% in the first half of the year when compared to the second half of 2023.
Annually prices remain elevated with 12.2% growth nationally.
“At a national level, the story is essentially about stability in values, with transaction volumes continuing to tighten as buyers increasingly fail to meet sellers’ price expectations,” Rural Bank Senior Manager Industry Affairs, Neil Burgess, said.
Transaction volumes dropped to just 2,966 in the first half of 2024, down 4.8% on the previous half-year.
The Australian farmland market has seen a sharp decline in transaction volumes since peaking in early 2021.
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Over the past six half-year periods, volumes have plunged 43%, with fewer properties hitting the market and sales taking longer to close.
“Transaction volumes are now at a record low, down 18.7% year-on-year and 4.8% below the second half of 2023, a consistent trend since reaching a peak in the first half of 2021,” Mr Burgess said.
On a state-by-state basis, every state recorded median price growth in the past 12 months, with the median price of farmland in Western Australia up 24.7%, while Victoria recorded a slight increase of 1.9%.
Tasmania has the highest median price per hectare at $23,022, followed by Victoria at $14,562/ha, Queensland at $9,777/ha, NSW at $9,745/ha, South Australia at $7,890/ha and Western Australia at $6,846/ha.
However, zeroing in on farmland values just in the first half of 2024 reveals growth in Queensland and NSW of just 5.6%, while Victoria has dropped 6.7%, South Australia has dipped 11% and Western Australia has declined 12.1%.
Only Tasmania has recorded significant growth in the half, of 16.5%, but only 45 properties have transacted.
Rural Bank Senior Agricultural Analyst Michael Curtis said three factors - commodity prices, seasonal conditions and interest rates - impacted farmland values.
“Each of those factors have shifted into settings that aren’t really conducive to fuelling strong demand for farmland,” he said.
The report revealed that while the livestock price index jumped 23.2% year-on-year in August, crop prices slipped 12.6%.
Despite stable overall commodity trends, weaker crop performance and tighter dairy margins are tempering enthusiasm for farmland investment.
Meanwhile, mixed rainfall patterns have left producers facing a patchy season.
While NSW and northern Australia enjoyed favourable rain, dry conditions hit southwest Victoria, South Australia, Tasmania, and WA's grainbelt hard, with over half the national sheep flock in below-average rainfall zones.
The outlook for eastern Australia is cautiously optimistic, with La Niña-like conditions forecast to bring some relief, though likely short-lived.
Interest rates have also had an impact on farmland values.
With the cash rate stuck at 4.35% since November 2023—the highest since 2011—demand for farmland has slowed.
While rate cuts are expected in 2025, they are likely to be gradual, offering only limited relief for potential buyers.
“Interest in buying has slowed down and led to less competition for properties and a slowing down of the price growth that’s being seen,” Mr Curtis said.
Mr Burgess said the outlook for farmland values in the second half of 2024 and into 2025 was steady.
"These factors are set to keep farmland values in a holding pattern for the second half of 2024, however, the longer-term outlook appears optimistic as demand may again strengthen if current rainfall forecasts provide a good finish to 2024 and interest rate cuts begin in early-2025,, Mr Burgess said.
Queensland farmland prices surged to a record high of $9,777/ha in the first half of 2024, marking a 5.6% increase from late 2023 and 17% growth year-on-year.
This rise continues the state’s five-year streak of price increases, driven by strong market conditions since 2020, though prices briefly plateaued in 2022.
Despite the price gains, transaction volumes dropped 10.7% from the previous half, with only 629 sales—the lowest in 29 years.
Since the second half of 2021, transactions have fallen 52% as rising interest rates dampen buyer enthusiasm.
While favourable seasonal conditions are expected to sustain growth into the second half of 2024, the pace is likely to slow amid ongoing market caution.
NSW farmland prices rose to $9,745/ha in the first half of 2024, up 13.4% year-on-year and 5.6% higher than late 2023.
This marked the 12th consecutive half-year increase, with median prices more than doubling, up 138.3 percent, since the start of this growth trend.
The strongest gains were recorded in the Central West and New England and North West regions, with more modest increases in the North Coast and Riverina Murray areas.
However, transaction volumes fell to their lowest level on record, with just 1,117 sales in the first half of 2024.
This was a 9.6% drop from the same period in 2023 and 25.5% below the five-year average.
The decline reflects a growing divide between buyer and seller expectations, with many properties left unsold.
While transaction numbers dropped sharply in the west, coastal regions maintained more consistent activity.
Victorian farmland values steadied over the past 18 months, with the median price hovering within 5% of $15,000/ha.
The current median of $14,562/ha is 6.7% lower than the second half of 2023 but still 1.9% higher year-on-year, marking the 18th consecutive half-yearly increase.
However, recent price growth has slowed significantly, falling well below the 30%-plus gains seen throughout 2021 and 2022.
High interest rates and stable commodity prices have kept demand for farmland subdued, limiting buyers’ capacity to make larger purchases.
The decline in transactions eased slightly, with 531 sales recorded in the first half of 2024—a 3.1% drop from late 2023 and the lowest on record for the state.
Overall, transaction volumes have fallen 38% over the past two years, with six of Victoria’s eight regions posting declines.
The South West region saw the sharpest drop, with transaction numbers falling 27%.
Tasmanian farmland values continued to climb in the first half of 2024, with the median price reaching a record $24,492/ha, up 7.5% year-on-year and 16.5% from the second half of 2023.
This marked the sixth consecutive half-yearly increase, though growth has slowed over the past two years.
Buyer hesitation, driven by high interest rates, dry conditions, and low livestock prices, has tempered market enthusiasm, shrinking the pool of active buyers.
Transaction volumes remain subdued, despite a 14% rise to 49 sales in the first half of 2024.
This increase follows a sharp decline in 2023, when the number of transactions more than halved.
Over the past 12 months, only 92 transactions were recorded—down from 97 in just the first half of 2023.
The slowdown is attributed to fewer listings, longer sales cycles, and a growing gap between vendor expectations and buyer offers.
Farmland values in South Australia dipped in the first half of 2024, with the median price falling 11% from the record high set in late 2023 to $7,890/ha.
However, prices remained 7.7% higher year-on-year.
This decline aligns with typical seasonal trends, as a higher volume of cropping properties—usually lower in value—were sold.
While productive land continues to attract buyer interest, high interest rates, dry weather, and lower commodity prices have tempered demand, particularly for grazing properties.
Transaction volume reached 381 sales, representing a 53% jump from late 2023 but 16.1% lower than the same period last year.
Despite the year-on-year drop, transaction numbers were only 4.5% below the five-year average, suggesting that while market caution is growing, demand at current price levels remains relatively stable.
Farmland values in Western Australia softened in the first half of 2024, with the median price dropping 12.1% from late 2023 to $6,846/ha.
However, prices were still 24.7% higher year-on-year and marked the second-highest half-yearly value in nearly three decades.
High-rainfall properties in the southwest, premium cropping properties, and land suitable for green projects in the Northern regions continued to attract buyer interest.
Transaction volumes fell sharply, with just 242 sales—a 31.4% drop from the first half of 2023 and 30.7% below the five-year average, marking the lowest volume in 29 years.
A tough end to the 2023 cropping season, weak livestock prices, and elevated interest rates eroded farmer confidence, leading to subdued demand and limited market activity.
A journalist with more than 20 years experience covering everything from court to health, it wasn't until Kylie Dulhunty took a job she didn't want - as a real estate reporter - that she truly found her passion. Today, Kylie loves nothing more than turning market trends, industry insights and epic property sales - residential, rural and commercial - into stories that captivate and inform.