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Rabobank report: Victorian cropping land skyrockets in value

The price of Victorian cropping farmland has exploded, increasing in value by 78 per cent in the past year, a new report has revealed.

Sustainability and investment

The value of Victorian cropping farmland has exploded in the past 12 months after several years with “exceptionally favourable” conditions, new figures show.

In the past year, the value of Victorian cropping farmland has increased by a staggering 78 per cent with the median price per hectare soaring to $10,200, according to Rabobank’s Australian Agricultural Land Price Outlook 2022.

Victorian livestock and dairy farmland also recorded significant price growth in the past 12 months, increasing by 42 per cent to a median price a hectare of $16,200.

The annual report, supported by farmland sales data from DAS (Digital Agricultural Services), also revealed the median price per hectare of agricultural land rose by a remarkable 27 per cent across Australia to $5450 a hectare in the year to September 2022.

RaboResearch general manager Australia and New Zealand and report author Stefan Vogel said the “double-digit” farmland value growth was driven by family farms looking to expand on the back of strong commodity prices and good production volumes.

“For multiple years in a row, the macro-settings have been exceptionally favourable for

land purchases,” Mr Vogel said.

“Prices of most major agricultural commodities hit or moved close to record highs, widespread rainfall has supported Australian production and interest rates have been at record lows.”

In the past 12 months there was a number of Victorian cropping farm sales which were completed for whopping sums.

In December last year the US-based Proterra Investment sold their 50-farm, 22,500ha Victoria and South Australian portfolio for about $360 million to 27 different Australian purchasers.

The US-backed Laguna Bay Agricultural Fund sold its 3353ha Woorndoo aggregation near Lake Bolac for about $70 million to the Shippen and Ross families in November last year.

While in April this year, 314ha of family farmland at Noradjuha, in Victoria’s Wimmera, was sold in two lots through auction for a record breaking $36,200 a hectare and $30,878 a hectare.

US private equity firm Proterra Investment Partners sold their 22,500ha Corinella Group of properties. The cropping farms are located near Lake Bolac in Victoria’s Western District, north of Ararat and Stawell, near Navarre in the Wimmera and at Naracoorte in South Australia.
US private equity firm Proterra Investment Partners sold their 22,500ha Corinella Group of properties. The cropping farms are located near Lake Bolac in Victoria’s Western District, north of Ararat and Stawell, near Navarre in the Wimmera and at Naracoorte in South Australia.

In NSW, the value of NSW cropping land increased by five per cent to $5400.

During the same period livestock land increased by 33 per cent across Australia and NSW to a median price of $8100 and $8150 a hectare respectively.

Mr Vogel said farmland prices were expected to remain near record levels with slower value growth expected over the next five years.

“Our base case forecast is that farmland price growth will continue, but we expect a

significant slowdown in the rate of growth of prices in 2023 and the years beyond to

2027 from the unprecedented strong growth seen recently,” Mr Vogel said.

Mr Vogel also said no decline in farmland prices was expected in the foreseeable future.

Original URL: https://www.weeklytimesnow.com.au/property/rabobank-report-victorian-cropping-land-skyrockets-in-value/news-story/0fcebfb1b7740aa20810627a80e11d3a