The recent era of fast-rising Australian farmland values has stalled, with prices rising just 0.1 per cent nationally in the first half of 2023 compared to the same period in last year, according to farm financier, Rural Bank.
And prices were down 3.9 per cent compared to the second half of 2022 as the number of farms changing hands continued to decline in the face of growing headwinds for the industry.
Rural Bank’s Australian Farmland Values Mid-Year Update put the change in farmland fortunes down to a shift in the drivers underpinning agriculture’s recent rising trend.
“The major drivers of farmland values – commodity prices, seasonal conditions and interest rates – all moved towards settings less supportive of fuelling strong demand for land purchases and are expected to continue to remain less favourable for price growth in the second half of 2023,” the report said.
“In addition, interest rates are set to remain at or near the current level, further hampering buying power.”
NSW farmland values rose the most across the country, up 14.9 per cent from the first half of 2022 to an average price of $8,649/hectare on 778 transactions, which were down 36.9 per cent. At the other end of the spectrum Tasmanian farmland values lost 24.7 per cent to an average of $14,034/hectare through just 60 transactions, down 63.9 per cent.
The declaration of El Nino conditions across Australia will likely dampen demand further as businesses adjust to conditions.
