The median value of Australian farmland increased by 5.3% last year following a 6.8% rise in farmland values in 2014, according to Rural Bank and Rural Finance’s inaugural Australian Farmland Values report. Source: AFDJ eNews
The report’s findings are good news for Australian farmers and emphasise the underlying strength of property values throughout the country.
While national growth reflects strength in the sector overall, performance of farmland prices in each state varies due to their respective industries, as well as geographic and economic variables.
To further understand the local value of farmland, the report features a comprehensive analysis of Australian farmland property values and key national, state and regional trends.
Since 1995, the median price across all states has recorded average annual growth above 5% outpacing inflation and proving the inherent long-term value of Australian farmland and the resilience of land prices despite ever-changing market conditions.
Speaking at the launch of the new report at an Agribusiness Australia event in Sydney, Rural Bank and Rural Finance Managing Director and CEO, Alexandra Gartmann, said the report’s findings confirm how the value of farmland is actually tracking.
“The new Australian Farmland Values report provides insights into a key asset of the farm business and how well that asset is holding its value in the context of the market as a whole,” she said.
“There is little doubt that the agriculture sector has good underlying strength. This report shows that over the long term, farmland values have increased ahead of inflation.
“This long-term growth in land prices reflects the strength and resilience of the industry and demonstrates the real value of farmland across Australia’s agricultural sector.”
The report was produced by Rural Bank and Rural Finance’s specialist market insights division Ag Answers and is based on real farm sales since 1995.
The analysis draws on more than 220,000 transactions, accounting for 264 million hectares of land with a combined value of $124 billion.
Ms Gartmann said that average annual growth in farmland value of more than 5% in each state over the last 20 years shows the strength in the value of this key asset over the long term.
“We know that a majority of farmers are in it for the long haul and this provides some assurance that, despite the inevitable bumps on the road that we see in any agricultural sector, and the changes in seasons and commodities prices, the value of the farmland itself is unaffected,” Ms Gartmann said.
“With this in mind, it supports our view that the future for agriculture is bright,” Ms Gartmann concluded.