Rabobank report: Australian agricultural land prices to increase over next five years

Land price increases for the next five years have been revealed and the ‘fear of missing out’ is seeing farmers pay prices higher than productive values.

This 308ha irrigation property at Nanneella recently hit the market asking about $8 million.

Australia’s record high agricultural land prices are set to say with a new report finding prices will increase over at least the next five years.

The annual report, released today by Rabobank and supported by Digital Agriculture Services, found the sharpest price growth will be until 2023 – fuelled by a booming agricultural economy and limited available land for purchase.

The report found national farmland prices will lift 10 per cent this year, 8 per cent in 2022, 5 per cent in 2023, 2 per cent in 2024 and 1 per cent in both 2025 and 2026.

Rabobank agricultural analysts Wes Lefroy said not in the last 30 years have the macro settings been so supportive of agricultural land price growth, with prices of most major agricultural commodities either at, or near, record levels.

“This – together with favourable seasonal conditions in the majority of Australia seeing

widespread rainfall supporting production – has driven farm revenues to record levels,” Mr Lefroy.

“Strong production years and high commodity prices, alongside record low interest rates,

have boosted farmers’ purchasing power.

“Nationally, our research is showing that farmer purchasing intentions are at the highest point in at least the past five years, with nine per cent of Australian farmers reporting that they intend to buy land within 12 months.”

It comes as the spring property market has seen landmark properties listed for sale – and billions of dollars’ worth of farms are expected to change hands this season.

Most recently, mining magnate and cattle queen Gina Rinehart has offloaded three Western Australian cattle stations for close to $100 million while one of the biggest cropping farms on the east coast – Yarrabee Park – hit the market with an asking price of $60 million.

The report found an undersupplied market has been contributing to ‘fear of missing out’ among farmers and adding upward price pressure to the market.

Mr Lefroy said he had observed the ‘fear of missing out’ factor prompting buyers to enter the market earlier than they had planned.

He said in some cases “FOMO” was prompting buyers to enter an expression of interest for a purchase at much higher than the productive value in orderto secure the property, not knowing when another opportunity may arise.

Rural property agents have recently told The Weekly Times they were reciveing record numbers for properties inquiries – with some attracting up to 100.