Revealed: How Victorian farmland values have fallen this year

The value of farmland in South and West Gippsland and the state’s North East has dropped by double-digits due to “subdued demand”. See how values have changed.

Victorian farmland values have dropped by 6.7 per cent so far this year. Picture: File (Zoe Phillips).

Victorian farmland values have declined so far this year with the state’s highest rainfall regions most affected by the price drop.

The median price per hectare has fallen by 6.7 per cent across Victoria in the first six months of this year to $14,562, while remaining relatively flat year-on-year, recording an increase of 1.9 per cent, the Australian Farmland Values Mid-Year Update has revealed.

The Ovens and Murray region recorded a 17.8 per cent decrease as it dropped to $19,610, while in South and West Gippsland values declined 12.4 per cent to $28,062 a hectare.

The median price per hectare also dropped by about 5 per cent in the state’s South West ($17,606 a hectare), Wimmera ($11,760) and Goulburn ($13,860) regions, whereas in Central Victoria there was a 5.6 per cent gain to $12,003 and in East Gippsland there was a 2.3 per cent rise to $13,492.

Rural Bank senior manager industry affairs Neil Burgess said Victorian farmland values have stabilised over the past 18 months due to “subdued demand”.

“There have been some bright spots within the state, with the Mallee which saw significant median price growth of 34 per cent in the first half of this year (to $6619 a hectare). On the flip side the Ovens and Murray and South and West Gippsland saw their median prices slip back,” Mr Burgess said.

Nationally, farmland values have increased by 12.2 per cent compared to this time last year. Picture: File (Zoe Phillips).

Across the border farmland values have also decreased in the NSW Riverina-Murray region, declining by 5.7 per cent to a median of $8930 a hectare.

While farmland values have dropped across much of Victoria, nationally prices stayed stable at $10,141 a hectare, declining 0.1 per cent this year, but are 12.2 higher than a year earlier, underpinned by strong growth in Queensland’s Central Highlands and Southeast, where values increased by 85.9 and 39.8 per cent respectively.

The report also found a wedge in the rural property market buyers increasingly failed to meet sellers’ price expectations, as transaction volumes fell to a record low, down 18.7 per cent year-on-year and 4.8 per cent below the second half of last year.

“The recovery of livestock prices after a disastrous 2023 and an easing in crop prices helps explain the variety in the median price movements we have seen around the country,” Mr Burgess said.

“These factors are set to keep farmland values in a holding pattern for the second half of 2024, however, the longer-term outlook appears optimistic as demand may again strengthen if current rainfall forecasts provide a good finish to 2024 and interest rate cuts begin in early-2025.”