National rural property prices have dropped for the second successive quarter, falling 2% to $10,186/ha, according to the latest research from Elders.
However, the Elders Rural Property Update for Q2 2024 also revealed prices were still 5% up on the same time last year.
The report showed that nationally, the number of transactions increased 10% both quarter-on-quarter and year-on-year to 1442, while the value of sales jumped 15% to $3.175 billion compared to the previous quarter.
Elders General Manager, Farmland Agency and Water, Mark Barber, said Australia had a two-speed rural property market.
“There is considerable variability in the number of properties sold across the country with Victoria well down quarter-on-quarter and year-on-year, while in both NSW and Queensland turnover has increased substantially,” he said.
“The variability in both value and volume indicators across the country is largely due to differences in regional seasonal conditions.
“In the south, we have seen some continued softening and dry conditions.
“In northern areas, seasonal conditions have been strong which is supporting property prices.”
On a quarterly basis, prices in South Australia rose the most, up 7% to $9,648/ha, based on 207 transactions, valued at $428 million.
Elders Business Intelligence Analyst, Richard Koch, said there had been a bit of “value hunting” in the South Australian market.
“Their prices probably didn't go up as high as Victorian prices in the heady markets (of 2021 and 2022),” he said.
“So the property prices in South Australia are a lot more affordable and that's attracted a bit of demand into South Australia.”
Queensland and the Northern Territory also record strong prices, up 2% quarter-on-quarter and 44% year-on-year, to $8,975/ha.
In NSW, the price indicator showed prices had dropped 3% for the quarter to $9,788/ha but remained 10% above the levels of early 2023.
“NSW was pretty much holding steady and there’s been some improvement in Queensland,” Mr Koch said.
“That’s largely driven by the cattle market.
“It was pretty bad in the second half of 2023, but we’ve seen a bit of a recovery in that market now and the outlook for the cattle market looks strong.
“I’m expecting the Queensland property market to lead the recovery when it does come.”
For the first time, the report also worked with specialist property market insight specialists Proptrack, to include leading indicators based on real estate website sale listings.
The indicators include new and active listings, along with days on market.
“These indicators act as a finger on the pulse of current market activity,” Mr Barber said.
The Queensland and Northern Territory rural property market showed signs of strength, with a 2% increase in prices to $8,975/ha and a 42% jump in transaction volumes, to 323 sales in Q2 2024.
The total value of properties sold soared 68% on the previous quarter to $840 million, as improved cattle values and favourable seasonal conditions buoyed the market, particularly in central and western regions.
Leading indicators reveal a rise in active listings, while days on market remain stable, which suggests that the recovery seen in cattle prices may lead to further modest gains throughout 2024.
“Queensland will lead the recovery, followed by NSW,” Mr Koch said.
“I think it's going to take probably another 12 months for farmers to get their overdrafts down, repair their balance sheets a bit, and build some confidence in the market to forge ahead.”
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In NSW, rural property prices fell 3% to $9,788/ha, but remain 10% higher than in early 2023.
Transaction volumes surged 35%, with 622 properties changing hands and the value of sales jumping 49% to $1.427 billion.
This uptick in activity was attributed to strong rainfall in some regions boosting crop production, while other areas faced a cooling off as prices stabilised from last year’s peaks.
Elders State Real Estate Executive, NSW, Richard Gemmell, said good rainfall in winter and into spring had resulted in increased crop production and pasture growth.
“Interest in farmland has values remaining steady, however, last year’s extreme prices seem to have eased,” he said.
“Confidence provided by the season has seen an above average number of sales throughout winter, and agents are now very busy as we manage campaigns in line with the spring flush.
“Competition remains from both domestic and abroad, with mixed farming enterprises offering scale receiving demand from both.”
Leading indicators show consistent new and active listings, although an increase in days on market indicates that prices are likely to stabilise further as spring campaigns unfold, setting the tone for the remainder of 2024.
The rural property markets in Victoria and Tasmania continued to struggle, with prices dropping 8% to $13,090/ha in Q2 2024 due to persistent dry conditions.
Transaction numbers fell 34% to 145 sales, and the total value of traded properties dropped to $212 million, down 34% from the previous quarter.
Elders State Real Estate Executive for Victoria, Riverina and Tasmania, Nick Myer, said while there had been a “general softening” in market conditions, demand for quality assets remained consistent throughout most regions.
“Price points are typically now at levels below the peak period in 2022, which is stimulating both new and existing investor interest into the sector,” he said.
“Corporate and neighbour-to-neighbour transactions remain strong, with a continuing focus on enhancing efficiencies via economies of scale, in addition to identifying opportunities where land can be converted to a higher and better use.
“Looking forward, we are envisaging some excellent buying opportunities across all sectors.”
South Australia's rural property market bucked broader southern trends, with the price per hectare rising 7% to $9,648/ha.
That is a 10% increase on the same period last year.
While transactions dipped 5%, totalling 207 sales, the market's total value of traded properties remained resilient at $428 million, which is 13% below the first-quarter peak.
Gains were particularly strong in regions such as the Mallee Riverland and South-east, where properties with water entitlements and vineyards attracted buyer interest.
“South Australia had strong volume and growth for the quarter with quality farms in tight regions moving quickly,” State Rural Sales Executive, South Australia, Adam Chilcott, said.
“In some regions, price growth paused or retreated after successive years of high growth, including the Eyre and Yorke Peninsula’s.
“Buyers saw opportunities in the South-east on parcels with water entitlements and vineyards, after recent subdued demand.”
Leading indicators show an increase in new listings and a reduction in days on market, signalling continued market resilience and the potential for buying opportunities through the remainder of 2024, despite ongoing seasonal challenges.
Going forward the winter crop and grazing programs are facing significant seasonal challenges statewide which may affect short-term confidence through the backend of 2024,” Mr Chilcott said.
“At this stage, buyer enquiry and activity remain relatively strong, and this year may prove to be a good long-term buying opportunity.”
Western Australia’s rural property market held steady in Q2 2024, with the price per hectare remaining unchanged at $9,237.
However, that figure is still up 3% from a year ago.
Transactions declined 20% to 141, and the total value of sales dropped 46% to $267 million compared to the previous quarter, reflecting a mixed growing season across the state.
The property market remains buoyant, particularly in the Central wheatbelt and South-west regions, where demand for quality land continues.
Recent indicators show a rebound in both new and active listings, and days on market have fallen, suggesting that Western Australia could see renewed momentum in the second half of 2024 as buyer interest strengthens and tight supply persists.
“The 2024 growing season has been mixed across WA,” Elders State Real Estate Executive, WA, Simon Cheetham, said.
“Much of the state commenced cropping in dry conditions, received high winter rainfall, followed by a dry spring.
“The property market remains sound, with strong pricing and tight supply across much of the state.
“The lower Great Southern has seen several quality properties become available during the spring selling season, which has attracted the attention of many local farmers as well as private and corporate investors”.