The median value of New South Wales farmland skyrocketed by more than 10 per cent in 2016, according to Rural Bank’s new Australian Farmland Values report.
The findings underline the resounding strength of New South Wales’ farmland value and shows the average annual median price of the State’s farmland has increased on average by 6.7 per cent per annum over the last 20 years.
The estimated number of farmland transactions in 2016 increased by 2.6 per cent – the most since 2007 – while the area of farmland traded also increased by 7.4 per cent when compared with 2015.
In 2016, a total of 1.95 million hectares of farmland was traded in New South Wales at a total value of approximately $3.48 billion.
The report features a comprehensive analysis of Australian farmland property values and key national, state and regional trends such as commodity prices, climatic conditions and other sectoral factors, lending rates and the broader investment environment.
Produced by Rural Bank’s specialist market insights division Ag Answers, the report is based on real farm sales since 1995 and draws on more than 230,000 transactions, accounting for 278 million hectares of land with a combined value of $132 billion.
Rural Bank Regional Manager Agribusiness, John Ellwood, said that a more than 10 per cent increase in the median value of the State’s farmland for the second consecutive year, highlights the strength of the asset and the long term viability of farmland as an investment option.
“In many regions of New South Wales, demand increased along with sales activity in 2016 mainly thanks to the strength of the livestock sector in the State.
“With the number of buyers in the market outstripping supply, farmland value increased throughout 2016 as older listings were sold, and new to market listings moved reasonably quickly.
“Given the high demand and low supply, farmland prices were driven up across all regions of the State, particularly in those areas with land capable of providing multi-industry opportunities, which continue to be highly sought after by farmers and investors,” Mr Ellwood said.
All regions of the State – with the exception of southern New South Wales – recorded significant increases in the median value of its farmland in 2016.
Median value per hectare in northern New South Wales increased by 10.8 per cent in 2016 with areas such as Inverell, Kempsey and Clarence Valley performing particularly well.
Farmland values in central areas of the State also jumped dramatically with the average median value increasing by 12.3 per cent year-on-year in municipalities such as Bathurst, Lithgow and Mid-Western.
“The value of New South Wales’ farmland continues to soar. 2016’s report once again reinforces the State’s standing as the most consistent state or territory for farmland value growth over the last 20 years. It is a huge boost for farmland owners there and ensures farmers can look to the future with optimism,” Mr Ellwood concluded.