Agricultural land prices in Australia rose 20% in 2021 and achieved the highest growth in 27 years.
According to the Australian Agricultural Land Value Report by Rural Bank, the median rural land rose for the eighth consecutive year in 2021, rising 123% in total and now at $ 7,087 (US $ 5,008) per hectare. ..
The report also revealed that the total amount of agricultural land traded in 2021 reached a record high of 10.8 million hectares, for a total of $ 15.6 billion.
Senior Agricultural Analyst at Rural Bank Michael Curtis said the number of farmland transactions nationwide has increased by 22.5% over the past year.
In comparison, the total area of Australian farmland sold in 2021 was larger than that of the European country Portugal.
“This is partly because farmers continued to sell rather than sell during the 2018 and 2019 droughts,” Curtis said in a comment received by AAP.
He said farmland prices were growing at a slightly faster pace than that of the housing market over the last 18 years.
“Housing prices in the Australian capital are rising by about 5.4% annually, compared to Australian farmland, which is rising by about 8.4% over the same period.”
Median per hectare rose by more than 30% in Western Australia, Queensland and Victoria in 2021, while South Australia, Tasmania and New South Wales recorded slower growth. The Northern Territory was the only jurisdiction that witnessed price declines.
At the same time, the median price increase in some parts of Tasmania was more pronounced than in any other region, at 50.9%. However, slowing growth elsewhere in the state reduced the overall median increase in Tasmania’s rural land to 7.6%.
It is worth noting that Tasmania’s median agricultural land price was $ 14,730 per hectare, the highest in the country.
Dean Lalor, Senior Agribusiness Relationship Manager at Rural Bank in Launceston, said:
In general, Western Australia recorded the most significant median increase of 36.3 percent in 2021.
Meanwhile, in the Northern Territory, the median price fell 18%, despite a 65.2% rise in 2020.
The report found that many favorable conditions for farmers were responsible for the record rise in farmland value.
“Companies, family owners, lifestylers and tree fellers are all fueling competition between different real estate market segments,” said Simon Dundon, General Manager of Sales Partnerships and Marketing at Rural Bank.
Nonetheless, Dandon said there were signs that buyers were beginning to be cautious about buying farmland.
“The outlook for higher interest rate and margin challenges from higher input costs can weaken demand and slow growth in real estate value,” he said.
“The significant rise in value in recent years has made some real estate unaffordable for many farmers and infeasible as an independent business. This acts as a barrier to new entry into the industry. So don’t ignore it. “
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Alfred Bui is a Melbourne-based Australian reporter with a focus on local and business news. He is a former small business owner and holds two master’s degrees in business and business law. Contact him at [email protected]