Land values keep on rising

Rural farmland values are going up and up according to a recent Rural Bank report, and northern Victoria is reaping the rewards.

The median price per hectare in the region hit $7399 in 2020, up 0.9 per cent and follows a 16.1 per cent increase in 2019.

The prices saw more than 62,850ha of land sold in 2020, with significant growth in a number of local council areas.

“Favourable seasonal conditions saw a rebound in transaction volume in lower priced municipalities in 2020, altering the transaction mix compared to 2019,” the report found.

“Median price per hectare increased in the municipalities of Mansfield, Moira and Shepparton.

“In contrast the municipalities of Indigo and Towong reported a decline due to an increase in the proportion of mid-priced transactions compared to 2019.

“In 2020, the volume of transactions increased by 8.6 per cent to 617, rebounding from a decrease of 3.6 per cent in 2019.

“Transaction volume for most municipalities rebounded in 2020, led by Mitchell and Moira increasing by 11 each.”

According to Matt Gill and Melissa Walsh, who work at the Bendigo and Shepparton branches of Rural Bank, it’s an ongoing trend.

“The northern region saw strong demand for land in 2020 due to favourable seasonal conditions and strong commodity prices,” they wrote in the report.

“Cropping and grazing land in the Campaspe and Loddon municipalities was highly sought-after.

“While the market remained relatively competitive in the north-east, outside of areas impacted by bushfires. Reliable grazing land attracted interest in the valleys. While the lifestyle segment of the market remains hot around Mansfield and Alexandra.”

Buyers increasingly sought to snap-up properties in the mid-range, with prices for parcels of 50 to 100ha and 110 to 150ha experiencing price jumps of 9.7 per cent and 1.1 per cent on media cost/ha respectively.

However, while those with parcels of 150ha experienced a 14 per cent year-on-year jump in the number of transactions, cost per hectare fell by about 15 per cent on the year prior.

“Historically, parcels greater than 150ha have returned the highest compound annual growth rate, however, a decrease in the media price per hectare in 2020 caused the 10-year CAGR (compound annual growth rate) to decrease slightly, equalling the CAGR of parcels between 50 to 100ha,” the report found.

The total value of farmland traded in Victoria in 2020 was about $1.2billion, a 17.1 per cent increase from 2019.

This was driven by both an increase in transaction volume across the state and an appreciation in land values, according to the report.