The annual report, by the agribusiness banking specialist’s RaboResearch division, said a positive outlook for key agricultural drivers was expected to see agricultural land prices rebound in the year ahead.
Meanwhile in a different report, Dairy Australia says dairy farmland values are continuing their decade-long climb.
F. P. Nevins & Co Rochester branch manager Tony Hooppell said the market was moving slower than they’d like, but some farm types were kicking off.
“It's just sort of travelling along, we’re selling a few, but cash is a little bit tight,” Tony said.
“If we had good farms, they’re sort of going, but they’re not going out the door like they were a couple of years ago.”
He said with not many properties up for sale, it’s a bit hit or miss, but in terms of types, broadacre was doing well and smaller, lifestyle properties were on the rise.
RaboResearch’s analysis found overall farmland prices had contracted in 2024, with the median price per hectare across all agricultural land types nationally decreasing by six per cent on the previous year.
But Gagliardi Scott Real Estate director Darren Scott said the dairy sector, in particular, was on the rise.
“I think the milk industry will pick up next year,” Darren said.
“It’s a little bit quiet at the moment, but we’re in a real dry spell.
“They’re still worth what they’re worth, but there’s just not as many buyers.”
RaboResearch expects the Australian farm sector will “enter a new period of steady growth”, reflecting the “more normalised on-farm margins” that are anticipated.
Kevin Hicks Real Estate director Kevin Hicks said the weather was a factor in why interest was lower than normal.
“The dairy sector has improved, commodity is always a challenge, they don’t get well enough paid for their product, but I think some of the better farms in that space have improved,” Kevin said.
“Horticulture is still struggling a little bit, but it’s sort of improved, the commodity’s improved, and I think that’ll reflect on sale processes perhaps this year.
“The confidence will come with some rainfall sooner than later.”
Price moves also varied between land types and across the country, the data set showed, with Western Australia and South Australia bucking the national trend and recording increases in the median price of agricultural land.
The report said the decline in farmland prices observed in the 2024 land sales data was “unsurprising” considering the period of rampant growth in recent years and factors that had weighed on the agricultural sector in the past year.
The report found the median price per hectare for agricultural land declined by five per cent in NSW, Victoria and Queensland, while in Tasmania, it was down 12 per cent.
“The Goulburn Valley has remained pretty steady over the last 12 months,” Shepparton Real Estate rural and lifestyle sales executive Danny Berryman said.
“Quality land is still attracting good interest when it comes available and looking at the economic conditions, obviously the reduction in interest rates will have a positive impact.”
Shepparton Real Estate director Ryan O’Connor agreed with Danny, saying the landscape is ever evolving.
“I think it's just a changing environment at the moment,” Ryan said.
“The positive effects of the reducing interest rates are likely to only offset the effects of the low rainfall conditions at the moment, we expect the dry will have a positive impact on irrigated land prices though.”
The Dairy Farmland Values report, commissioned by Dairy Australia, highlights how farmland values across the eight dairying regions are some of the highest in the country.
Over the past decade, the Murray region (northern Victoria and southern NSW) recorded the strongest price growth, with the median land value surging 252 per cent; reflecting strong demand to purchase land in the area, exacerbated by the limited sales.
While Gippsland saw the smallest 10-year increase of 91 per cent, it remains the most expensive dairying region, with a median price of $20,882/ha in 2023-24.
The report outlines how the national median price per hectare has increased every year over the past decade, despite a fluctuating number of farms sold over this period, with annual growth above 10 per cent since 2019-20.
In 2023-24, the national median price in dairying regions hit the record level of $12,906/ha, off the back of tightened farmland supply, strong demand for productive land and a rebound in the livestock market.
Like most agricultural markets, the report said, land values shift in response to broader economic and climate conditions.
Between May 2022 and November 2024, the Reserve Bank of Australia lifted the cash rate 13 times, from 0.1 per cent to 4.35 per cent. These higher interest rates affected borrowing capacity and purchasing decisions for many, particularly those looking to enter the industry.
As such, there has been a decline in the number of farms sold nationally in the last three consecutive seasons.
Farm gate milk prices, rising input costs (especially for feed) and drier seasonal conditions in some areas, also slowed demand and resulted in sluggish land value growth across most dairying regions.
The report said the price barrier for those looking to enter the industry is now larger than ever, while making industry exits for smaller family farms more attractive.
For those looking to expand their footprint, the uplift in land value provides an increased ability to borrow, although the return on investment does become harder to justify amidst high operating costs.
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