Australian farmland values hit record highs as growth slows

Australian farmland reached a national median price of $10,516 per hectare in 2025, up 2.8 per cent year-on-year, according to Bendigo Bank Agribusiness’ 2026 Australian Farmland Values Report.

However, the bank said the annual growth rate was now the slowest seen in 12 consecutive years of growth, pointing to a more selective and fragmented market.

Bendigo Bank Agribusiness Senior Manager Industry Insights, Eliza Redfern, said buyers were no longer purchasing broadly across the market.

“A subdued start to the year gave way to a more confident market in the second half driven by improved seasonal conditions, three RBA cash rate cuts, and strong livestock prices,” Redfern said.

“However, widespread, uniform growth has fallen, and buyers are now more discerning, prioritising asset quality, water security, and long-term returns,” she said.

The report found South Australia recorded the strongest annual growth, with farmland prices rising 20.4 per cent, while Western Australia climbed 6.7 per cent and Queensland rose 5.8 per cent.

Victoria was the only mainland state to record a slight decline, falling 0.4 per cent amid dry conditions and cautious buyer sentiment, while Tasmania dropped sharply by 20.6 per cent due to limited transaction volumes and market volatility.

Rabobank’s latest Australian Farmland Price Outlook painted a similarly restrained outlook for the sector, forecasting national farmland prices to rise by around two per cent in 2026.

Rabobank RaboResearch commodity analyst, Paul Joules, said the market had shifted into a weaker growth cycle after the boom years experienced earlier in the decade.

“Our base case forecast expects Australian agricultural land values to continue rising in 2026, with the median price per hectare projected to increase by around two per cent year-on-year,” Joules said.

“And the expectation is for similarly moderate growth in land values from 2026 to 2031, with the market having firmly entered a weaker growth cycle, driven by higher interest rates and softer commodity pricing.”

Rabobank found grazing land continued to outperform cropping country in 2025, with grazing land values rising three per cent nationally while arable land prices slipped by one per cent.

The bank said elevated fertiliser, diesel and input costs — worsened by the Iran war — were likely to weigh further on farm margins in the year ahead.

“A key challenge, and one likely to remain a recurring theme in 2026, is the supply shock stemming from the Iran war,” Joules said.

“The conflict has already driven fertiliser and diesel prices to exceptionally high levels, which are expected to have a material impact on margin potential across the sector.”

Further RBA interest rate hikes in 2026, following two increases earlier this year, could place further pressure on farmland value growth, Joules added.

Despite the moderation in price growth, both reports noted Australian farmland continues to deliver strong long-term returns, supported by resilient livestock markets and ongoing demand for high-quality agricultural assets.