Australian dairy land prices double in two year period

A property expert has revealed how the price per hectare in several dairy regions has doubled in the space of two years.

Western Victoria and Gippsland are among the regions to most benefit from a dairy property price boom, with prices per hectare more than doubling in just two years.

LAWD senior director Tim McKinnon said the skyrocketing prices had been fuelled by record prices paid at the farmgate.

The average price per hectare in Western Victoria was approximately $10,000 in early 2020. That figure is now northwards of $20,000.

Australian dairy farmers have received record prices at the farmgate in the 2022/23 season. Picture: Zoe Phillips

“Western Victoria had a pretty stable period, from about 2007 to 2019, with the price per hectare between $7000 and $10,000, depending on the circumstances of the sale,” Mr McKinnon said.

“Part of that price stability was the fallout from the managed investment schemes (in the late 2000s). Prices paid at the farmgate fluctuated a fair bit throughout the 2010s and of course, there was the clawback (by Murray Goulburn and Fonterra).

“By about 2019/2020, prices paid by the processors at the farmgate really started to improve and gave the industry that confidence to invest. A similar trend in western Victoria was also seen in south-east South Australia.”

Mr McKinnon’s research showed Gippsland also experienced a property price boom, but not to the same extent as western Victoria.

“Gippsland’s average per hectare was off a higher base in the mid-2010s. We’re talking $12,000 to $13,000 per hectare in 2018 and 2019 with that average rising to the $20,000 per hectare range by 2021 and 2022,” he said.

“Tasmania has had a reasonable increase in price paid per hectare but again, like Gippsland, the average was $12,000 to $13,000 per hectare in 2017/18/19. Now, it’s also north of $20,000. Western Victoria showed the most growth in that period; it started off a lower base and really shot up the charts during that two year period.”