South
Australia
draws on transactional data from every rural land sale in Australia. This data is supplied by Corelogic and analysed by Elders. Every effort is made to clean the data in order to provide an accurate account of price and volume movements.
Elders uses a range of analytical techniques to achieve robust and repeatable analysis. Our dataset is subject to the following criteria:
⋅ Only transactions above 40 hectares (ha) are included, except for Tasmania where transactions above 30ha are included.
⋅ Transactions which list a primary purpose that isn’t classed as rural are excluded.
Local government areas (LGAs) which fall within a metropolitan area are excluded from the analysis.
Outliers by price per hectare are excluded. This involves visual and statistical assessment of all $/ha values for a region, and this is performed every quarter.
Several data fields are available in the Elders dataset, including median price per hectare, transaction volume, value, area, date of sale and land use. The quarterly update focuses on median price per hectare growth and transaction volume.
This data is not intended to be a valuation of any one property and is merely a method of tracking growth over time for a given dataset.
Definitions within the update include:
CAGR – refers to the compound average growth rate for a given period.
QoQ – quarter on quarter growth
YoY – year on year growth
1yr rolling performance - the median price per hectare for one year from the latest data point.
For example, the 1yr rolling median $/ha for Q2-2022 runs from 01/07/2021 to 30/06/2022; the next quarter will roll to the 01/10/2021 to 30/09/2022. The dataset changes by one quarter at a time which helps smooth out volatility and give an indication of long-term trends.
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may not be
accurate
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or
Agricultural land continues to be a highly sort after investment from incumbents and new entrants alike. Elders Rural Property Update shows continued strong growth with low sales volumes.
During the second quarter of 2022 there has been some convergence of commodity prices and property values which is to be expected over the longer term due to the close correlation of these indexes. The commodity price index has fallen this quarter and property prices have continued to grow. This is perhaps the most important lead indicator of rural property values.
If commodity prices soften further this may result in slower property price increases. In recent months we saw interest rates continue to rise but there have been early signs of a slow-down in inflation around the world. However, the probability of a recession in some of the largest economies in the world is increasing. As a large exporting nation, recession may lead to deduced demand for some of our agricultural products softening commodity prices further.
However, if fears of recession increase, investors will look for assets that will maintain their value – defensive assets. Agricultural land produces food and fibre that people need even in difficult economic times, which will continue to support land values.
During turbulent economic times, landowners have fewer choices to invest the proceeds of land sales. This reduces the incentive to sell land, particularly if seasonal conditions remain favourable. The Rural Property Update shows a strong relationship between supply and demand across all areas. Continued low supply will lead to support for land values.
The Elders Rural Property Update provides valuable property information and insights every quarter, building an invaluable database of information on land values and their relationship with other aspects of the economy and the agricultural sector.
As always, our experienced team in the field, in every major agricultural region in Australia, can provide the local context for the Elders Rural Property Update and its implications for your rural land investments. Mark Barber General Manager Farmland Agency and Agribusiness Investments
shows a strong increase in median price per hectare at national level driven by a rebound in transaction volume in New South Wales. This contributed to a higher proportion of grazing and lifestyle properties in the overall mix compared to Q2-2022.
Nationally, median price per hectare increased by 11.2 per cent (pc) in Q2-2022, taking the quarterly median price to $7,339 per hectare (ha). Transaction mix swung back to higher priced states, particularly New South Wales, with transaction volume was 2.3pc higher totalling 1,569.
At state level, Western Australia recorded the highest growth in median price per hectare in Q2-2022, up 42.6pc compared to Q1-2022 at $8,157/ha. South Australia recorded the second largest increase, up 20.8pc in Q2-2022 to $6,429/ha. In contrast, median price per hectare declined in Victoria, down 10.2pc to $11,369/ha.
Transaction volume tightened further in six of the seven states analysed, with only New South Wales recording an increase, up by 38.3pc in Q2-2022.
The national one year rolling median price per hectare increased by 3.3pc in Q2-2022 to $7,452/ha. The one year rolling median price per hectare increased across all states and territories, ranging from a 19.1pc increase in the Northern Territory to a 0.6pc increase in Victoria.
The value of rural property traded totalled $3 billion, up 1.6pc compared to Q1-2022.
Following on from Q1-2022, interest rates continued to rise in what will become a consistent trend for the coming quarters. Despite interest rates being the most topical driver of property markets they haven’t had the most impact in the first half of 2022.
Instead, operating factors and seasonal conditions have controlled listings. Every state and territory recorded a decline in transaction volume over the past year; as volumes tighten the quality and type of properties selling varies considerably. As the pool of transactions shrinks, quarterly median price per hectare becomes more volatile, increasing the importance of understanding the underlying trend, which remains positive in every state and territory.
Potential sellers remain torn between selling at high prices and running profitable businesses. Spring and Summer will no doubt provide an increase in buying opportunities, but we expect any increase in supply to be met with a high level of demand into 2023.
Elders Rural Property Update aggregates transaction data from 39 regions across Australia. To get in touch please refer to the ‘For More Information’ page at the end of this update.
select
drivers
as favourable as
rate rises and a decline
these factors,
Australian commodity prices remain high across most categories, barley (+31pc YoY), canola (+18pc YoY), wheat (+26pc YoY), beef (+4pc YoY) and skim milk powder (+37pc YoY). Lamb and wool prices are currently the exception, trade lamb (-16pc YoY) and eastern wool indicator (-8pc).
⋅ Business interest rates continue an upward cycle, medium business rates increased 0.77pc during Q2-2022 and a further 0.44pc in July, taking the average to 3.8pc. Large business rates increased by 0.94pc in Q2-2022 and a further 0.46pc in July, taking the average to 2.95pc.
⋅ Debt to Agriculture, Forestry and Fishing increased by 8.7pc in Q2-2022 to $101.2 billion, however, the balance declined by 1.3pc in July as borrowers paid down debt.
⋅ The National Farm Management Deposit (FMD) balance at the high point of the year in June was $6.8 billion, 9.1pc higher than June 2021, highlighting the strong level of liquidity in the industry.
The gap between commodity prices and rural property prices closed in Q2-2022, driven in part by increasing property values and a slight decrease in commodity prices. The likely outcome from the above drivers is that rural property prices will continue to grow in the second half of 2022, supply is tightening across the country which will drive demand higher for properties that do list. Buyers are looking to be more informed compared to previous years, however, long term confidence in the industry remains high.
Following on from Q1-2022, interest rates continued to rise in what will become a permanent trend for the coming quarters. Despite interest rates being the most topical driver of property markets they haven’t had the most impact in the rst half of 2022.
Executive Summary, page 6
rolling performance
“Spring will see a continuation of strong demand for rural land from incumbents and new entrants alike.
“Supply will remain low as landowners prepare for what is shaping up as an above average harvest albeit with weather related challenges. The grazing sector on the east coast also looks set for a strong spring with an abundance of good quality feed.
“We don’t expect to see any change in the low levels of rural land on the market in Spring. It’s unlikely this scenario will change while trading conditions remain favourable and alternative asset investment classes remain uncertain.”
Mark Barber
Elders GM Farmland Agency & Agribusiness Investments, Australia.
“Demand for agricultural land remained strong in the first half of 2022 driven mostly by confidence in a continuation of buoyant commodity prices and favourable seasonal conditions in Southern Australia.”
Mark Barber Elders GM Farmland Agency & Agribusiness Investments, Australia.National median price per hectare increased by 11.2pc, driven by strong growth in Queensland, South Australia and Western Australia.
Transaction volume rebounded in Q2, primarily due to growth in New South Wales. However, supply remains tight across the country.
In contrast, the 1yr rolling median price per hectare increased by 3.3pc in Q2 to $7,452/ha, the twelfth consecutive quarter of growth. Rolling transaction volume declined for a fourth consecutive quarter, down by -10.8pc to 7,541.
Median $/ha: $8,158 +11.2% +15.7%
Transactions: 1,569 +2.3% -36.7%
Value traded: $3.0b +1.6% -24.9%
“Landholders are torn between the temptation to sell whilst properties are in such great condition and values are so strong and the opportunity to generate strong profits on the back of good prices and seasons.
“Farmers are managing significant rises in input costs and overall operating cost increases alongside interest rate rises. Interest rates are still low in comparison to historical levels however buyers are certainly being more mindful considering recent rate increases and the likelihood of further rises.
“Most of the pastoral areas have experienced unseasonal rainfall and have a solid body of feed. Listings are expected to continue to attract strong buyer interest.”
Rob Anderson, State Real Estate Manager, QLD/NT
“Supply will continue to tighten, driven in part by wet weather disrupting listings and a positive outlook for prices and seasonal conditions. Demand remains high for all categories of rural property and prices are reflecting this situation.”
Rob Anderson State Real Estate Manager, QLD/NT
Median price per hectare increased by 13.1pc in Q2, driven by strong growth in the South and West regions.
Transaction volume declined slightly in Q2, however, there was a higher proportion of smaller parcels in the South region, contributing to the increase in median price per hectare.
The 1yr rolling median price per hectare increased by 9.2pc in Q2 to $6,178/ha, the tenth consecutive quarter of growth. Rolling transaction volume declined sharply down 15.5pc to 1,569.
QoQ
YoY (Q2-2022 vs. Q2-2021)
Median $/ha: $7,229 +13.1% +38.7%
Transactions: 311 -1% -48.1% Value traded: $633.2m +19.4% -47.3%
volume
“Commodity prices remain strong and interest rate rises seemingly not impacting enthusiasm.
“We expect the selling season to run later than normal this year, due to the wet, with a number of farm auctions being postponed until onsite inspections can be conducted.”
Richard Gemmell, State Real Estate Manager, NSW
“Spring has sprung with early sown crops, that aren’t waterlogged, showing great potential and should continue with some fine sunny weather.
Median price per hectare eased 2.5pc in Q2, driven by a greater proportion of large parcels transacting in lower priced regions, partially offset by a lift in livestock property sales.
Transaction volume rebounded in Q2, increasing by 38.3pc, primarily in the North West and Riverina Murray regions, reflecting demand for larger parcels of land.
The 1yr rolling median price per hectare increased by 4.1pc in Q2 to $7,603/ha, the seventh consecutive quarter of growth. Rolling transaction volume decreased by 8.6pc to 3,302, continuing the downward trend.
QoQ YoY (Q2-2022 vs. Q2-2021)
Median $/ha: $8,095 -2.5% +17.4% Transactions: 711 +38.3% -30.4% Value traded: $1.4b +51.3% -9%
“Sales activity varied across the state throughout the winter months with a greater percentage of transactions centred around livestock production in the slopes and tableland districts.”
Richard Gemmell State Real Estate Manager, NSW
“We are expecting to see a healthy volume of assets present to the market throughout the spring period, with sellers wishing to capitalise on continued strong market conditions. Demand is still outweighing supply, with quality assets being very well received and strong results being achieved.”
Nick Myer, State Real Estate Manager Victoria/Riverina and Tasmania
“The first half of 2022 has seen continued growth throughout most sectors despite rate rises. Continued strong commodity prices coupled with excellent seasonal conditions have contributed to this ongoing performance.”
Nick Myer State Real Estate Manager Victoria/Riverina and TasmaniaMedian price per hectare decreased 10.2pc in Q2, driven by a decline in prices in the Central, Gippsland and South Central regions.
Transaction volume eased 13.4pc to a new low of 175. Supply remains tight particularly in South West Victoria which experienced the steepest decline in sales in Q2.
The 1yr rolling median price per hectare increased by 0.6pc in Q2 to $11,628/ha, the smallest increase since Q1-2021. Rolling transaction volume tightened further, down by 16.1pc to 993.
QoQ YoY (Q2-2022 vs. Q2-2021)
Median $/ha: $11,369 -10.2% +1.5%
Transactions: 175 -13.4% -52.1%
Value traded: $224.8m -17.4% -53.0%
Median price per hectare declined by 8pc in Q2, driven by declines in the Northern and South Tasmania regions.
Transaction volume increased in three regions however this was offset by fewer sales on the Islands of Tasmania. Larger, lower priced transactions made up a greater proportion of the total compared to Q1.
The 1yr rolling median price per hectare increased by 5.4pc in Q2 to $11,600/ha, the second consecutive quarter of growth. Rolling transaction volume declined by a further 29pc to 110, the tenth consecutive quarter of decline.
Median $/ha: $9,937 -8.0% +1.9%
Transactions: 21 -8.7% -68.2%
Value traded: $29.8m -41.5% -77.4%
Rolling
“Demand for all categories of agricultural land has continued unabated in South Australia. Interest rates whilst moving up for the first time in 11 years at this stage haven’t had a significant impact on values.
“Globally, world grain supply issues continue to impact Australian prices particularly with the eastern European War and the catastrophic floods in Pakistan. La Nina has the potential to assist production in southern Australia whilst negatively effecting production in competing countries such as South America.
“With a large harvest forecast and an expectation of high demand for Australian grain we expect operating conditions to remain positive in South Australia well into 2023.”
Phil Keen, State Real Estate Manager, South Australia
“Sustained high commodity prices, particularly livestock and grain, has helped fuel demand in SA. We expect a large spend on capital improvements post-harvest as confidence in the industry remains high.”
Phil Keen State Real Estate Manager South Australia.
Median price per hectare increased by 20.8pc in Q2 due to strong growth in the South East and Yorke Peninsula regions.
In contrast to Q1 there were fewer transactions in the lower priced Eyre Peninsula region which aided median price growth at state level.
The 1yr rolling median price per hectare increased by 12.5pc in Q2 to $5,076/ha, the strongest increase of the reported period. Rolling transaction volume decreased by 2.2pc to 747, coming off a peak in Q1.
QoQ YoY (Q2-2022 vs. Q2-2021)
Median $/ha: $6,429 +20.8% +73.1%
Transactions: 193 -15.7% -4.3%
Value traded: $340m -27.1% +15.3%
“For the most part, pasture and crop growth has been exceptional, with collective fingers crossed for another very high production year.
“Farmers continue to seek additional land to expand their operations, which has seen many properties sell quickly at record prices, maintaining the trend we have seen in recent years.
“Buyers are obviously factoring in global uncertainty, inflating inputs, commodity volatility and rising interest rates, however strong businesses remain confident in the future and opportunities within WA agriculture and are continuing to grow.”
Simon Cheetham, Senior Rural Real Estate Executive Western AustraliaMedian
Avon-Midlands
South West.
strong growth in the higher priced regions
fewer cropping transactions in the Central, Eastern and Northern regions. This altered the
mix towards higher priced regions such as Great Southern and Avon-Midlands.
1yr rolling median price per hectare increased by 2.9pc in Q2 to $7,131/ha, the eleventh consecutive quarter of growth. Rolling transaction volume decreased by 6.6pc to 768, further tightening supply.
QoQ
YoY (Q2-2022 vs. Q2-2021)
Median $/ha: $8,157 +42.6% +8.3%
145 -38% -27.1%
traded: $218.7m -51% +8.3%
We acknowledge the limited transaction volume
the NT increases short term volatility; quarterly data should be viewed with caution.
Median price per hectare eased slightly in Q2 driven by a higher proportion of lower priced transactions in the Outback region.
The 1yr rolling median price per hectare increased by 19.1pc in Q2 to $2,063/ha, continuing an underlying positive trend. Rolling transaction volume decreased by 10.3pc, after two quarters of growth.
YoY (Q2-2022 vs. Q2-2021)
Median $/ha: $1,860 -3.9% +46% Transactions: 13 -27.8% -31.6% Value traded: $94m -52.2% +43.4%
Territory)
Potential sellers remain torn between selling at high prices and running pro table businesses. Spring and Summer will no doubt provide an increase in buying opportunities, but we expect any increase in supply to be met with a high level of demand into 2023.
Executive Summary, page 6
The analysis above is replicated across 39 regions Australia wide, and is summarised by local government area. Elders clients enjoy exclusive access to these detailed levels of analysis and additional content via our expert real estate agents.
If you are considering selling or purchasing land, we encourage you to speak to our team and discover how expert local knowledge backed by data, can help you make an informed decision.
E: Elders.Communications@elders.com.au
W: eldersrealestate.com.au/contact-us/ Analysis
E: matt.ough@elders.com.au
Queensland and Northern Territory – rob.anderson@elders.com.au
New South Wales – richard.gemmell@elders.com.au
Victoria and Riverina (NSW) – nicholas.myer@elders.com.au
Tasmania - nicholas.myer@elders.com.au
South Australia – phil.keen@elders.com.au
Western Australia – simon.cheetham@elders.com.au
