Elders Rural Property Update 2021 reveals $13.3B worth of Australian rural property transactions

A dwindling supply of farms for sale in Victoria is set to drive farm prices to record levels in 2022 according to the experts.

A whopping $13.3 billion worth of rural property sales were recorded across Australia last year, a new report has found.

The Elders Rural Property Update, released today, found a record rate of appreciation in the price of farmland across Australia in 2021, with median values rising to $7060 per hectare – an 18.4 per cent increase compared to 2020.

Farms also remained tightly-held in 2021 with 9098 transactions completed, a 3.4 increase over the previous 12 months.

Elders Real Estate executive general manager Australia Tom Russo said he expected prices to continue to rise while supply was short.

“Supply remains tight around the country which is reflected in price growth against a backdrop of positive buy side factors,” Mr Russo said.

The data also showed Victoria is home to the second most valuable farmland in the country, recording a median price per hectare of $12,587, an increase of 34.9 per cent across the calendar year.

Elders general manager Tom Russo.

Tasmania took out the top spot with buyers paying up a median price per hectare of $15,520, recording an increase of 21.3 per cent in the past 12 months.

Elders Victoria, Riverina and Tasmania real estate manager Nick Myer said top-dollar will be needed to secure any farms on the market throughout 2022.

“Supply remained constrained in Q4, following the trend of 2021. As a result, significant competition was witnessed for listed properties, with record prices achieved across most regions,” he said.

“In the existing smaller market, supply is expected to remain constrained throughout 2022.

“We anticipate demand to increase, as a result of limited opportunities presented to purchase assets.

“This may prompt vendors to list their properties with the confidence of achieving higher prices.”

The Murray River Land-Ulupna Pastoral Company, Numurkah, was sold for $120m-plus in 2021.

Recent data also revealed farmland returns had hit a seven-year-high, according to the Australian Farmland Index.

And with market conditions still perfectly placed, Elders head of agribusiness investment services Mark Barber said global demand for Australian products will be the foundation of future property price rises.

“Perhaps the most important long-term factor driving property prices is a belief in the continuation of strong market fundamentals for most Australian farmland outputs,” he said.

“Demand is strong for Australian grains, oilseeds, meat, dairy and fibre products, with experts, family farmers and investors believing this is likely to continue for some time.”

In late 2021, some of Australia’s biggest agents predicted what 2022 would have in store, with recent results surpassing their predictions.

The data is supplied by CoreLogic and analysed by Elders with only transactions above 30ha included for Tasmania and sales above 40ha included for all other states and territories.