The cost of Australian farm land continues to increase with prices up 20 per cent in the past 12 months, marking a ninth consecutive year of growth.
The latest data from Rural Bank shows the price of agricultural land has risen 167 per cent since 2014, fuelled by strong demand and increasingly tight supply.
“Farmland values maintained strong growth momentum in 2022 as the national median price per hectare increased by 20 per cent to $8506 per hectare,” said Rural Bank’s Andrew Smith.
The data showed 2022 as the first time in almost three decades that growth of more than 15 per cent was recorded across all states and territories.
But that growth is expected to slow down in the next 12 months.
“The likelihood of lower farm incomes in 2023 has the potential to cause prospective buyers to reassess their purchasing intentions and consequently lead to a shallower pool of buyers,” the report stated.
“We do expect this current year to still see growth but not at the same level,” said Mr Smith.
Some of the biggest price hikes were seen in Tasmania where on average buyers paid 55 per cent more per hectare for agricultural land last year.
“I think what we had found with Tasmania is that it was coming off a lower base historically,” said Mr Smith.
Victoria, South Australia and Western Australia all had prices increase by more than 20 per cent on the previous year.
The Northern Territory recorded 108 per cent growth but Mr Smith said the figures tend to be skewed because of the small number of sales.
Queensland also recorded a big increase in the price of land and took out the title for the most land bought and sold with 2,497,556 hectares traded.
“We’ve seen some some strong sales in Queensland with just under two-and-a-half million hectares of land traded, and the price was up 19 per cent for the year,” said Mr Smith.
He said farming families were behind the purchases.
“We’ve seen a number of larger businesses aggregating their holdings,” Mr Smith told AAP.
The report found the farmland market continued to experience growth at a time when the residential sector had slowed down.
“The national average price of residential dwellings fell 5.3 per cent across the year following growth of 25 per cent in 2021,” the report said.
But while farmland values were up in 2022 there were far fewer sales nationally, with the number of transactions down by 34 per cent to 6588.
The report concluded 8.8m hectares of land was bought and sold last year, worth a combined value of $11.7b.
“The total number of hectares of Australian farmland sold in 2022 equates to an area similar in size to that of a European country, such as Hungary,” Mr Smith concluded.
(Australian Associated Press)