Australian farmland values have continued to grow in the first half of 2024, albeit at a slower pace. The median price of farmland in 1H 2024 is $10,141/ha, marking a rise of 12.2% compared to a year earlier. This growth signifies the 22nd consecutive half-yearly period of year-on-year growth. However, the median price in the first half of 2024 remained essentially unchanged from the second half of 2023, with a marginal fall of just 0.1%.

The number of farmland transactions has contracted as properties took longer to sell. Transaction volumes are at a record low, down 18.7% year-on-year and 4.8% below the second half of 2023.

Certain regions have seen stronger growth trends due to favourable seasonal conditions. Queensland, particularly in the Central Highlands and Southeast, and the Hunter and North Coast of New South Wales, have experienced robust growth. Tasmania also saw significant growth in the North, boosting the median price per hectare for the state.

On the other hand, Victorian values have plateaued over the past 18 months, with the first half of 2024 registering a half-on-half decline. Western Australia and South Australia both experienced dry conditions in the first half of 2024, which likely resulted in median prices falling from the record highs seen in the second half of 2023.

Neil Burgess, Rural Bank Senior Manager Industry Affairs, commented on the national situation, “At a national level, the story is essentially about stability in values with transaction volumes continuing to tighten as buyers increasingly fail to meet sellers’ price expectations."

Burgess further explained the variety in median price movements, “The recovery of livestock prices after a disastrous 2023 and an easing in crop prices helps explain the variety in the median price movements we have seen around the country. In general terms, the traditional drivers of farmland values have led to a more subdued buyer appetite.”

Looking ahead, Burgess predicts a holding pattern for farmland values in the second half of 2024. However, he remains optimistic about the longer-term outlook. ""These factors are set to keep farmland values in a holding pattern for the second half of 2024, however, the longer-term outlook appears optimistic as demand may again strengthen if current rainfall forecasts provide a good finish to 2024 and interest rate cuts begin in early-2025,” he said.

The major drivers of farmland values – commodity prices, seasonal conditions, and interest rates – were mixed across regions and commodities. The recovery of livestock prices after a disastrous 2023 and an easing in crop prices have led to a more subdued buyer appetite. Farmland values are expected to remain stable for the second half of 2024, but the longer-term outlook appears optimistic if current rainfall forecasts provide a good finish to 2024 and interest rate cuts begin in early-2025.