Farmland hot property – rising to $7,635 per hectare nationwide | Queensland country life

The ‘insatiable’ demand for farmland around Australia shows no signs of abating despite sky-high prices.

One of the country’s largest rural property companies, Elders Ltd, has taken a close look at national sales results and found that scorching demand for farmland has driven prices up almost 20% over the last year. to the previous year.

It was a record increase.

The value of rural goods traded domestically last year totaled $13.3 billion, an increase of $1.7 billion from 2020.

The latest Rural Seniors Property Update shows that the price per hectare continued to rise in the last quarter of 2021, with the national median price per hectare increasing by 3.6%.

Over one year, the increase was 18.4%.

The national median farmland price is now $7,635 per hectare.

The elders collated prices for every sale of rural property over 40ha in partnership with Corelogic (with the exception of Tasmania where properties over 30ha were also used).

The Elders’ executive general manager (real estate), Tom Russo, said last year that confidence in agriculture was even higher due to exceptional seasonal conditions, high commodity prices and interest rates. low.

“There remains a seemingly insatiable appetite for Australian farmland from local players and large institutional investors,” Mr Russo said.

Land price increases are driven by strong demand in Queensland (up 26.9pc), South Australia (up 32pc) and Tasmania (up 37.7pc).

On the other hand, the median price per hectare fell in New South Wales (-0.7 pc) and Western Australia (-25.2 pc) compared to their already high levels.

States with the increase have seen strong demand for high quality broad properties and highly sought after lifestyle properties, particularly in South Australia and Victoria.

Source: Elders.

In New South Wales, more cropland sold at the end of last year, which traditionally attracts a lower price per hectare than high-rainfall pasture and style plots. of life.

The national rise during the year was driven by WA’s staggering 41% increase, driven by strength in the grain industry and a tight supply of properties.

The number of sales transactions increased by 3.4% in 2021, to 9,098 properties, the highest volume since 2017.

Alumni said the rise was mainly driven by an influx of listings in the South Australian market (up 18.1%), particularly in agricultural regions, and a 13.5% increase in New Zealand. South Wales.

According to Elders, the volume of farmland for sale is expected to tighten further this year, as volumes have been declining since the middle of 2021.

According to the elders, the reasons why people, many of whom are neighbours, are willing to pay record prices are the same reasons why most farmers cling to their land, creating this situation where demand exceeds demand. offer.

“Perhaps the most important long-term factor driving house prices is the belief that strong market fundamentals continue for most Australian agricultural production,” Elders said.

“Demand is strong for Australian grains, oilseeds, meat, dairy and fiber, with experts, family farmers and investors believe that this is likely to continue for some time.

MORE READING: Cheap debt will keep agricultural prices high.

“However, we have recently seen rural property values ​​rise faster than commodity prices, indicating a greater influence of non-commodity price factors, such as low interest rates and access to equity from existing farms, influencing land purchase decisions.

“This has made farm families the most competitive sector of the rural property market.”

Apart taking advantage of high prices and generational shifts, there’s little reason for sellers to sign up, says Elders.

“Sellers looking to exit the industry are benefiting from relatively tight trading volumes that drive up prices and create a more competitive selling landscape,” Russo said.

“With a number of factors bolstering confidence in rural property investment and interest rates remaining relatively low, we expect supply to tighten further in 2022, suggesting further growth in the median price to the hectare.”

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The story National farmland price rises to $7,635 per hectare first appeared on farm online.

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