Elders Rural Property Update Q2 2022: Median price per hectare records double-digit increase

Farm prices are plateauing in some states, with landholders “torn” between selling their farm or making the most of current seasonal conditions.

Farm values across Australia have recorded a double digit jump in price in just three months, with the tight supply of properties for sale continuing to be outpaced by strong buyer demand.

Between April 1 to June 30 this year, the national median price a hectare increased by a significant 11.2 per cent to $8158 a hectare, the Elders Rural Property Update Q2 2022 rural property report shows.

Across the country the transaction volume of sales increased by 2.3 per cent in the second quarter of 2022 to 1,569 deals totalling $3 billion.

Elders general manager farmland agency and agribusiness investments Mark Barber said the details of the report showed the resilience of rural property values.

“Rural property prices will continue to grow in the second half of 2022, supply is tightening across the country which will help drive demand higher for properties that do list,” said Mr Barber.

North Star Pastoral sold the NT cattle stations, Maryfield and Limbunya, in an off-market deal worth a reported $175 million.

“Buyers are looking to be more informed compared to previous years, however, long term

confidence in the industry remains high.”

A higher proportion of grazing farm transactions in South Australia and Western Australia paired with a sharp increase in NSW transaction volume helped push the national median price a hectare higher.

Despite a quarter on quarter decrease of 10.2 per cent in the median price per hectare, Victorian continues to hold the crown as the state or territory with the most valuable farmland in Australia at $11,369.

However, Victorian median price per hectare increased by 1.5 per cent between June this year and last year.

Between April and June this year just 175 farm sales were completed, a 13.2 per cent decrease compared to the first three months of the year and a 52.1 per cent decrease year on year, with transaction volume falling to 2019 levels.

The Elders report also described landholders as “torn between selling at high prices and running profitable businesses” thanks to current commodity prices across sectors.

Mr Barber said the value of commodity prices in an unsettled global economy will have an effect on Australian farmland values.

“During the second quarter of 2022 there has been some convergence of commodity prices

and property values which is to be expected over the longer term due to the close correlation

of these indexes,” he said.

“The probability of a recession in some of the largest economies in the world is increasing.

“As a large exporting nation, recession may lead to reduced demand for some of our

agricultural products softening commodity prices further.”