Young Victorian farmers priced out as rural land values skyrocket

While corporate giants snapped up Victoria's farmland at record prices, the number of young farmers able to buy their first property has plummeted. See the details.

Young farmers in Victoria are not justifying the cost of buying their first parcel of land, opting instead to lease or sharefarm.

Young farmers have been priced out of Victoria’s rural property market, with the number taking up stamp duty exemptions and concessions halving in the past four years.

State Revenue Office records show in 2020-21, 175 young farmers under 35 applied for the Victorian government’s stamp duty exemption or concession on parcels of land worth up to $750,000.

But that number dropped to 97 the following year, as the average rural land price jumped from $8114/ha to $10,583/ha in 2021-22, despite the Reserve Bank of Australia setting interest rates at less than 1 per cent.

By the time rural land prices hit $15,000/ha in 2023-24 young farmer applications had slumped to 69, climbing back up to 96 in 2024-25, as rural land prices eased slightly.

As property prices soar the number of young Victorian farmers claiming stamp duty exemptions on their first block of land has slumped. (Source: State Revenue Office)

Victorian Farmers Federation president Brett Hosking said “the opportunity for young people is less as land prices get bigger”.

But he said getting young people into farming was “an eternal problem, we just haven’t worked out”.

Existing family farms and corporates are able to spread the cost of a new block across the rest of business, but young farmers say they struggle to generate the rates of return needed to cover loan repayments, amid soaring input costs.

Birchip Cropping Group extension senior manager Grace Hosking said about half the 400 members of the group’s young farmer network had opted to share-farm or lease land instead of trying to buy.

“I think over the past few years we’ve had to really focus on other options,” Ms Hosking said. “More than half (of the BCG’s 400 young farmer members) would be leasing or sharefarming.”

The BCG is working with Agriculture Victoria to find neighbours, agronomists and others who can mentor young farmers, as well as holding catch-ups to help them manage costs, machinery inventories and lift their fertiliser efficiencies.

Quambatook grain grower Brent Sheahan said he and his two brothers were able to claim the stamp duty exemption, but the threshold of $750,000 had failed to keep pace with soaring land prices.

“You can’t buy a block of land for that,” Mr Sheahan said. “It should be $2m to $3m at least.”

The Mallee grower is the first to admit he and his brothers “had to use dad’s equity” to buy their 600ha, and that it was virtually impossible for any young farmer to now by land on their own.

He said unlike home buyers, who only had to find 10-20 per cent of a property’s value to get a loan, young farmers had to find 40 per cent of the agricultural land’s value.

Soaring costs also meant costs as a proportion of operating returns had risen from 55 per cent a few years ago to 75 per cent today.

Meanwhile corporate players have dominated the rural property market over the past year, in the form of major pension funds, European family offices and even the agricultural investment arm of the Mormon church.