Australian rural sales limited, however continue to grow values

Post east-coast drought, 2020 and beyond has resulted in record-breaking production, combined high commodity prices for Australia’s major agricultural products and growing demand for livestock has aided in continued upward pressure in land values.

The current values recorded by ABARES farmland price indicator for 2023 highlight growth in most states, however there has been a significant decline in transaction numbers across the country. Volumes in 2023 are approximately 50 per cent down on pre-pandemic levels, with greater volatility emerging in smaller markets such as Tasmania which has recorded a 39.8 per cent increase over the last 12 months to $17,524/ha which is anticipated to correct over the coming years. Home to the greatest volume of rural land, Western Australia has witnessed sizable growth in values, up 9.5 per cent over the year to represent $9,350/ha while NSW and its rich rainfall and pastoral zones has seen over 16 per cent increase in values to $12,623/ha.

Over the longer term however, NSW continues to outperform recording annual growth rates of 20.8 per cent over the last 20 years, followed by Victoria (18.6 per cent) and South Australia (18.3 per cent).

Offshore interest in the agricultural sector has continued to take a step backwards after 2022/23 data recorded foreign ownership across the sector of 12.3 per cent from 14.1 per cent the prior year. Furthermore, the most recent data from September 2023 highlights a quiet start to the financial year, recording just $1 billion in transactions, tracking 50 per cent behind the prior, quiet year.

Across the agricultural sector there are expectations of continued high production with improved productivity in cropping resulting in greater grain production. While there have been declines a variety of commodity prices across Australia, improved technologies and management practices is expect to lead to continued strong volume growth. For livestock however an increased demand for protein has seen significant increases in outputs and values with export levels also increasing to drought affected United States and other emerging nations which has had a positive impact on farm values.