Double digit growth in rural property values in 2021 The rural property market performed strongly in 2021, Elders analysed data provided by Corelogic which suggests a 13.6 per cent (pc) increase in the national median price per hectare to the end of September.
The current growth phase for rural property values is being driven by low interest rates, strong commodity prices and generally favourable seasonal conditions aligning with periods of relatively high prices across most major commodities.
Elders Head of Agribusiness Investment Services, Mark Barber shares his thoughts on the market in 2021.
These factors have boosted farm profitability, increasing debt servicing capacity. Higher farm incomes, strong balance sheets, and low debt cost are making family farmers strong competitors for rural property. Institutional and corporate investors are also looking for investment opportunities as rural property is seen as a long duration, capital secure asset class producing competitive returns.
National rural property performance Year
Median $/ha
% change
2018
$
5,061
7.7%
2019
$
5,520
9.1%
2020
$
5,999
8.7%
2021
$
6,815
13.6%
Data: Corelogic, analysis by Elders. This analysis is current to the end of September 2021 and includes all eligible farmland transactions above 40 hectares.
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Looking at 2021 more closely the market has aligned for several industries specifically beef and grain. Wet conditions have aided restocking and led to bumper crops around the country. Queensland has experienced a boom in transactions off the back of rainfall opening options for beef producers.
While elsewhere in the country, grain farmers have enjoyed a rare luxury of favourable seasonal conditions, high yields and high prices, Western Australia is the state with the most to gain from this situation and our analysis suggests double digit growth is indeed on the cards for the third year in a row. In terms of transaction volume, the analysis has suggested increased activity in Queensland, New South Wales and Western Australia, continuing the momentum from late 2020. This is significant considering there has been an increase in median price per hectare despite increased supply in these states, something which demonstrates the current confidence in the agricultural industry. Elders looks forward to continuing to provide analysis on Australian rural property using Corelogic data with the intent to provide our customers and the broader industry with valuable insights in 2022.
