LAST year was a big one for Australia’s rebounding farmland prices, with median settlement values rising 9.3 per cent to almost double the gains achieved in 2015.
The median values for commercial rural properties had already jumped 5.3pc and 6.8pc respectively in 2015 and 2014.
Last year’s biggest performance was a whopping 35.1pc rise in Northern Territory, according to the research by Rural Bank’s AgAnswers farm sector insights division.
The second best performer was Victoria where transaction values jumped almost 13pc to be worth $1.1 billion, despite 18pc fewer property sales than the previous (drought) year.
Queensland followed with a 10.3pc rise on 2015 median values and a 43.5pc increase in the area of land traded (7.95m hectares) for $2.1b.
Then NSW, up 10.1pc for land sale prices after a 7.4pc increase in the area traded (1.95m hectares) at a total value of $3.48b.
The bullish NT results were despite a 26.4pc fall in the median price of larger cattle stations sold last year, with much of the price jump triggered by more Top End land sales north of Katherine, including less extensive holdings.
Nationally, last year’s real farm sale results were well above the past 20 years’ average gains of 6.4pc and through the roof compared with the past decade’s, still respectable, 3.2pc average growth increase.
In total, more than 230,000 transactions accounted for 278m hectares of farmland sold Australia-wide in 2016, worth a combined value of $132b.
AgAnswers compiles the farmland valuation data annually based on results recorded by relevant state and territory government departments.
It tracks the dollar a hectare trends for farmland, where possible eliminating the influence of small block and metropolitan sales or compulsory land acquisitions by single buyers.
The Rural Bank and Rural Finance research team noted the findings underlined a resounding strength of Australia’s real farmland as an asset class.
Median prices in most states have enjoyed 5.6pc average annual growth in the past five years and more than 6pc for the past 20 years.
Rural Bank’s agribusiness general manager, Andrew Smith, said the figures confirmed the long-term positive outlook for Australian agriculture.
“Despite variable seasonal conditions and ever-changing commodities prices, the sustained growth in land prices not only reflects the sector’s resilience, but investor confidence in Australian agriculture’s future growth prospects,” he said.
“It’s clear from the report you are likely to come out on top if you buy right and take a long term view when investing in agricultural farmland.”
While the performance of farmland prices in most states was buoyant, there was inevitable variability from state to state.
Median prices in Western Australia only lifted about 3pc and in South Australia by just 1.4pc, and fell in Tasmania by 0.4pc following a 12.8pc jump the previous year.
Tasmania suffered a 30pc drop in the amount of land area traded and a 15pc fall in the number of transactions, but the state’s south posted a 28.3pc jump in median prices over 2015 sales.
“There has been incredible growth across the eastern states in 2016,” Mr Smith said.
“While the remaining states have not performed so well in the same period – taking the long term view – the growth rate is remarkably consistent across the board.
“This will come as no surprise to those on the land, but perhaps we’re getting to a point where the investment community is recognising what we’ve always known – there’s a bright future in Australian agriculture.”