Qld farmland prices settle

By Fiona Gowers

Queensland land prices rose 20 per cent last year, with a 10pc increase predicted in 2023.

Growth, however, will fail to reach the 30 per cent surge recorded in 2021 and 2022, according to a new report from agribusiness lender Rabobank.

After Australia’s farm sector recorded three strong financial seasons – underpinned by high commodity prices and good weather conditions - the bank is forecasting “low doubledigit” percentage growth in agricultural land prices for the year ahead.

Rabobank said in its latest Australian Agricultural Land Price Outlook that a significant slowdown in the “pace of price growth” was expected from 2024, potentially through to 2028.

Farmers’ reduced appetite to buy land is due, it says, to already sky-high farmland prices, higher interest rates and the predicted onset of an El Nino dry period, which may reduce agricultural yields.

“Commodity prices are likely to remain at good levels for farmers for the next one to two years,” said RaboResearch agriculture analyst Vitor Pistoia.

“However, the drier forecast may result in lower yields and reduced margins, while rising interest rates will curtail long-term investment plans.

“Currently, cash already available in the system and stocks of grains and livestock ready to enter the market remain the key factors driving land price growth.”

Rabobank concludes that the boom in land prices, which exploded in 2020 when the drought ended, has likely run its course.

Although, it doubts prices will drop, as they have in the residential and office markets.

Rabobank’s latest land price outlook report - supported by farmland sales data from Digital Agricultural Services and excluding lifestyle rural property sales - shows agricultural land prices across the country rose by 29 per cent (median price per hectare) in 2022.

Cropping land increased by 29pc, livestock grazing land by 26pc and dairy by 29pc.

In other states, NSW recorded a year-onyear increase of 19pc, lifting the average price per hectare there to $9401.

Median land prices in Victoria jumped 28pc in 2022 after a massive 40pc increase the year prior.

South Australia recorded the highest growth in agricultural land prices of all states, a gain of 34pc.

In Western Australia, prices paid for farmland reached a record high of $6000/ha last year, after a 22.5pc increase.