Elders rural property update: Victorian farmland Australia’s most valuable in 2022

Victorian farmland boomed by more than 20 per cent again last year, but the same kind of growth is not predicted for 2023.

Victorian farmland was the most valuable of the last calendar year as rural land values soared across Australia again.

Victoria’s median price per hectare reached $12,937 in 2022, with 22.5 per cent growth compared to national rural land values which increased by 18.1 per cent to $8142 a hectare, according to the Elders Rural Property quarter four update.

Elders Victoria-Riverina and Tasmania real estate manager Nick Myer said after another year of price growth that exceeded 20 per cent, there had been keen interest in the market in the first quarter of this year.

“While quality assets continue to be met with strong demand and are achieving excellent results, there are isolated instances where the market has confirmed signs of levelling out,” Mr Myer said.

Meanwhile, the median price per hectare increased by 11.2 per cent nationally in the final quarter of last year, taking the quarterly median price to $9019 per hectare.

Comparing year on year final quarter change, SA farmland soared the most, increasing 44.4 per cent to a median price per hectare of $8157, driven largely by about $200 million worth of sales in the state’s southeast late last year.

Year on year, Victorian farmland increased by 13.3 per cent, but fell by six per cent in the final quarter of the year, partly due to the spring floods.

Elders general manager farmland agency and agribusiness investments Mark Barber said the future of rural land values this year was uncertain.

Tasmania’s median price per hectare was the highest in Australia in the final quarter of the year, thanks in part to the $100 million-plus sale of the 4448ha Vaucluse Estate at Conara.

“The trends suggest that historically low interest rates, sound commodity fundamentals and

favourable seasonal conditions have been fully factored into land values, and the market is

looking for some direction as we move into 2023,” Mr Barber said.

Charles Stewart and Co director Nick Adamson said values for cropping and red meat farms in the state’s southwest had experienced a slight correction, while dairy farms continued to hold their value.

“While the bottom has not fallen out of the marketplace, there is just some more apprehension in the market,” he said.

“So far this year we have seen the heat come out of the market compared to when it was white hot in the spring of 2021 through to mid-2022.

“It has returned to more normal levels due to rising interest rates, higher costs and declining commodity prices.

“However, dairy farms have been holding their value and have been a bright spot in the market thanks to record-high milk prices.”