Australian farmland prices are set to rise again this year, but growth will be slower than in the past three years, according to the yearly snapshot from Rabobank.
The agricultural lender forecasts farmland value will increase in the next 12 months across all sectors by five per cent per hectare, with cropping land to outperform grazing land.
“Land prices will maintain their growth trend, but not for all sectors and regions,” the report said.
“Land that is used to produce crops like wheat, lentils, canola and cotton, will take the lead in price growth, because they have a better price outlook than other commodities,” report author Vitor Pistoia told AAP.
After three consecutive years of “double-digit” growth, the momentum in agricultural land price increases will slow in 2024, as farm profitability levels come off record highs.
Last year farmland prices increased by 11 per cent on average, while it increased by almost a third the previous year.
The data shows the number of farms being sold continues to drop too, with national sales declining 35 per cent in 2023. This varied across the states with transactions down 43 and 44 per cent in Western Australia and Victoria, but only six per cent in South Australia.
“Large deals – with sales above the A$10 million threshold – also declined, down 33 per cent year on year and about in line with the decline in all farm sales,” Mr Pistoia said.
The report analysed over 1500 sales from 2023 and over 11,000 sales from across the country since 2019.