Revealed: Victorian farm prices surge by 362 per cent

The staggering scale of the explosion in farm prices has been revealed, with values outpacing housing and industrial property. See the top 100 assets by rise in value.

Two decades worth of soaring farmland prices across southern Australia have eclipsed the increasing value of other real estate asset types, to become the nation’s boom property class.

A new report by the Australian Property Institute, which analysed the price growth for Australian housing compared with industrial, commercial and agricultural property in each state and territory, has revealed the scale of the explosion in farmland prices since 2004.

The deep dive revealed Australian agricultural property values have risen an average 256 per cent nationally in the past 20 years, compared to 154 per cent for housing, 164 per cent for industrial property (such as warehouses and factories) and 143 per cent for commercial property (such as offices and shops).

Relative to an inflation rate of 67 per cent, national farmland prices have risen by a net 189 per cent.

Farmland in six different agricultural regions recorded the most growth in value in the past 20 years, led by Victoria’s Wimmera region where values soared by a staggering 802 per cent, driven by the popularity of converting traditional farms into new solar farms, according to the report.

Elsewhere Tasmanian farmland increased in value by 689 per cent, 662 per cent in Queensland’s Central North, 594 per cent in the NSW North West Slopes and Plains and by 471 per cent in the West and South West Queensland regions.

In the NSW Riverina, farmland prices have grown exponentially by 400 per cent, while Victoria’s Southern and Eastern farmland ranked as the 10th largest asset growth nationally in the past two decades, with a 346 per cent increase.

Victorian Mallee farmland also ranked inside the top 25, placing 23rd after recording a 289 per cent increase in value.

State-by-state Tasmania led the way with its almost 700 per cent of growth, followed by Victoria with 362 per cent, Queensland with 334 per cent plus South Australia with 282 per cent and NSW with 276 per cent.

As recorded across much of the country, the report identified agricultural valuations surged most notably between 2020 and 2022 as record commodity prices, exceptionally good seasons and low interest rates elevated farm profits.

The report also noted renewable energy projects had boosted farmland prices through their payments to landholders to host wind turbines, solar farms and transmission lines.

Cited in the report, TDC Services director Tom Everitt said they had assessed various energy projects in Victoria in recent years.

“On one hand, we see some landholders seeking the best deal for themselves, whereas others are more conflicted and have broader issues with these types of projects,” he said.

“There is absolutely no one-size-fits-all approach. Therefore, it’s critical that projects work closely with landholders to identify work to resolve these matters.”