Rural property sales across Queensland reached $3.2 billion for last year

It marked the third consecutive year of growth and has Queensland experiencing increased price rises in seven of the past nine years.

This is the analysis of one of the nation's biggest farm lenders, Rural Bank (part of the Bendigo and Adelaide Bank group) which says nationally, a number of market "headwinds" have softened the market.

Remarkably for Queensland, the year-on-year growth of 18.9 per cent is actually seen as a slowdown but only in comparison with the amazing 31.3pc rise in 2021, Rural Bank found.

The lack of supply has been pushing prices up.

Queensland recorded 1785 farmland sales last year, down almost a third on the record-breaking 2021.

The West region recorded the biggest fall of 63pc, closely followed by Central with a 60.6pc.

The volume of land traded last year was 2.5 million hectares - the lowest amount sold in the last 28 years.

It was still the second most valuable year on record with $3.2 billion in sales.

The median price of farmland in all Queensland regions increased year-on-year for the second consecutive year, with all reaching record highs.

Queensland farmland values were characterised in 2021 by strong demand for smaller parcel sizes in regions closer to population centres.

Last year's results saw the strongest price growth in regions of larger properties driven by favourable conditions for crop or pasture growth and strong cattle prices.

Growth in the Western Downs outpaced other regions with a rise of 77.5pc year-on-year, while the West and Central regions rose 41pc and 33.2pc respectively.

The South East region retained the title of the highest median price per hectare in 2022, though the 13.4pc price rise was down on the previous year's lift of 24.8pc.

The slowdown was a common theme among other regions, best exemplified by the North region which recorded a year-on-year increase of 3.5pc compared with 21.1pc in 2021.

"Queensland farmland values continued to reach records in 2022, but growth slowed compared to 2021," Leah Weekes, Rural Bank, Queensland said.

READ MORE: See our list of the big property sales in 2022

"Increased prices were aided by favourable seasonal conditions and strong commodity prices which continued to see a consolidation of smaller farms into medium sized operations.

"While Queensland has seen a lot of interstate migration from the urban and lifestyle segments, with cheaper land values than other states, we've also seen farmers from other states affected by natural disasters diversifying both their geographical and commodity operations.

"The slowdown in farmland value growth is expected to continue and may plateau in the coming year, but prices are unlikely to fall significantly as there is still interest even at these higher-than-average prices."

Rural Bank's annual report, when considered with similar recent reports from Elders and Rabobank, points to the boom run of farm property sales likely reaching an end.

While analysts say land prices will keep rising it will be at a slower pace to signal the end of the record run.

Only a tightened supply of farms for sale last year kept those headwinds at bay and saw yet more price records.

The bank points to an "inflection point" to finally slow the growth in values recorded right around Australia.

Farmland sales last year equated to 8.8 million hectares of land valued at $11.7 billion.

For comparison, wheat exports from last year's bumper harvest have been valued at $14.2 billion and in 2020-21 red meat and livestock exports totalled $14.6 billion.

The amount of land which changed hands is similar in size to a European country such as Hungary.

The bank's annual deep dive into Australian Farmland Values said some of the drivers of the farmland price boom in recent years had changed.

Tracking every farmland sale annually for almost three decades, the 2023 Rural Bank report is the longest running analysis of the farmland market in Australia.

Interest rate rises are starting to bite, agricultural commodity prices began to fall during the second half of 2022 plus the cost of key farm inputs hurt cash flows.

Although, as Rural Bank's analysts point out, farmland values are still expected to rise as demand still outstrips supply but not to the same extent as recent years.

Rural Bank's head of agribusiness development Andrew Smith said: "While there was enough momentum to sustain growth in farmland values in 2022, the continuation of these headwinds into 2023 could begin to drive a slowdown in growth."

READ MORE: Queensland's top property sales of 2022

Mr Smith said it was unlikely farmland values had yet peaked or were headed down.

"Rather, the new level of interest rates, downturn in commodity prices and potential for a drier finish to 2023 points to farmland values reaching an inflection point.

"Growth is still expected in 2023, albeit at a slower rate than the previous two years."

The Rural Bank report said farm land prices kept rising last year for the ninth consecutive year.

Land prices jumped another 20pc last year, following the 20pc rise the year before.

The national median price per hectare for Australian farmland is $8506 per hectare.

According to the bank's many years of data, farm prices have risen by 167pc in nine years.

Hold onto your broadbrimmed hats, the Northern Territory recorded a stunning price growth of 108pc.

Across the states in 2022, Tasmania soared on its median price per hectare with a 54.9pc lift.

Victoria, South Australia and Western Australia all recorded growth of more than 20pc closely followed by Queensland and NSW with increases of 15.9pc and 18.9pc respectively.

According to Rural Bank records, was the first time growth of over 15pc was recorded across all states and territories in 28 years..

The supply and demand equation came into play as the number of farm properties available for sale last year fell sharply.

Nationally, the number of farmland transactions fell by 34.3pc to 6588 - the lowest level of transactions in 28 years.

Across the states, falls in sales ranged from 13.8pc in Tasmania to a 44.6pc fall in Victoria.

South Australia was the only state to record an increased number of transactions in 2022.

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