UPDATE: A significant downturn in Australian farmland values has been confirmed, as the national median price drops to $9,885 per hectare for the first half of 2025, according to the latest report from Bendigo Bank Agribusiness. This represents a concerning 3.1 percent decline year-on-year, marking the first stall in growth since 2013.
As transactions plunge to a record low of just 3,104 sales, down 11.5 percent from last year, the ramifications for the agricultural sector are profound. With South Australia and New South Wales being the only states to register price increases, the overall trend indicates a substantial cooling in the farmland market.
Why this matters NOW: The cooling of farmland prices comes after 12 years of consistent growth, raising alarms among industry analysts and farmers. Sean Hickey, Senior Agricultural Analyst at Bendigo Bank, emphasized that “ongoing consolidation of landholdings and tighter margins have curbed buyer urgency,” reflecting a shift in the market that could have lasting effects on food production and farming operations.
The decline is attributed to various factors, including fluctuating commodity prices, rising input costs, and interest rates, which have dramatically altered buyer behavior. Notably, properties are taking longer to sell, particularly in regions still grappling with the impacts of drought and poor seasonal conditions.
In the first half of 2025, the state-by-state analysis reveals that Queensland’s farmland median price decreased by 3.4 percent to $9,558 per hectare, while Victoria saw a more severe decline of 10.4 percent. Tasmania faced a staggering 20.1 percent drop, with the median price falling to $17,575 per hectare.
What’s next? Experts predict that improved seasonal conditions may lead to a rebound in buyer interest, particularly in grazing properties, where recent positive rainfall has bolstered demand. However, the weak cropping prices remain a significant barrier, especially in regions still recovering from drought.
As agricultural stakeholders navigate these turbulent market conditions, the focus will be on how easing interest rates and improved weather patterns could potentially revive the farmland market in the coming months.
For those in the agricultural sector, this is a critical juncture. The financial viability of small to medium-sized producers is increasingly under threat as they struggle to compete with larger operations benefiting from economies of scale. The question remains: will the market stabilize, or is further decline inevitable?
This report serves as a crucial indicator for farmers, investors, and policymakers as they prepare for what could be a challenging year ahead in the agricultural landscape. Stay tuned for more updates as the situation develops.
