Tasmanian farmland is mirroring housing, and soaring in price.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
It is the nation's most expensive farmland per hectare, and by a big margin.
According to Rural Bank's Australian Farmland Values report, Tasmanian farmland values increased for the third consecutive year in 2021, with the median (mid-point) value per hectare sold up by 7.6 per cent to a record high $14,730.
That was more than double the national median of $7087, with Victoria the only other state to top $10,000 ($10,583).
IN OTHER NEWS:
However, Tasmania (minus 15.2 per cent) and Western Australia (minus 6 per cent) were the only states or territories where the volume of transactions decreased, to 189 in Tasmania's case.
Transactions were up by 22.5 per cent nationally to 10,032, amid what the bank described as a surge in demand.
"Farmland values across Tasmania have continued to trend higher in 2021 as constrained supply, low interest rates and rising demand supported values," Launceston-based agribusiness relationship manager Dean Lalor said.
"This supportive macroeconomic environment has driven a continued desire for expansion amongst both large family growers and corporate farms, ensuring strong buyer competition across most of the state.
"The Northern and North-West regions have consolidated the large median increases reported in 2020, while the South region recorded significant growth after several years of declining prices.
"The year ahead could potentially see more caution come into the market as underlying fundamentals become less stable."
The bank said the number of hectares sold nationally during the year was bigger than Portugal.
"Stronger agricultural commodity prices coupled with a second consecutive year of favourable seasonal conditions in most areas improved cashflows and strengthened balance sheets, with support from record low interest rates and confidence in the long-term outlook for the agricultural sector all combining to see a surge in the buying power of Australian farmers," the bank's general manager, sales partnerships and marketing, Simon Dundon, said.
"Strong demand has made the market for farmland incredibly competitive.
"We have seen many farmers looking to acquire neighbouring blocks to expand the scale of operations or looking to regions further afield to diversify their land holdings, meaning that many properties are fiercely sought after by multiple cashed up and competing buyers.
"Median prices increased to new record highs in every state, except the Northern Territory, with the supply of land on the market also increasing."
He said the strength of demand exceeded the rise in supply, driving prices higher.
"Corporates, family farmers, life-stylers and tree-changers are all fuelling competition across the various property market segments which has seen the national median price record the largest year-on-year increase in dollar terms per hectare in the past 27 years, and the largest rise in percentage terms since 2005," Mr Dundon said.
"However, signs of buyer caution are beginning to emerge.
"The prospect of higher interest rates and margin challenges from higher input costs could dampen demand and slow the rate of growth in property values."
He said the strong rise in values in recent years would make some properties unaffordable for some farmers and unviable as stand-alone operations.
Mr Dundon said that was a barrier to new entrants to the industry.
"As it stands, 2022 is shaping up to be another strong year for Australian agriculture and the longer-term fundamentals remain strong," he said.
"This should continue to fuel interest from buyers, with enough demand still in the market to push prices higher again in 2022."
Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content:
- Bookmark www.examiner.com.au
- Make sure you are signed up for our breaking and regular headlines newsletters
- Follow us on Twitter: @examineronline
- Follow us on Instagram: @examineronline\
- Follow us on Google News: The Examiner