Rabobank’s 2025 Australian Farmland Price Outlook anticipates a modest 3% growth in farmland values, following a 6% decline in 2024.
This downturn came after a significant 79% surge between 2020 and 2023.
“Buyers will be searching for value and, given the recent price drop, investment opportunities may present themselves in 2025 as buyers capitalise on weaker land values,” said Paul Joules, RaboResearch analyst.
While Rabobank noted a national dip in 2024 values, Bendigo Bank reported a continued rise, highlighting differences in data sources but a shared expectation of slower, steady growth ahead.
The 2024 data revealed a 13% drop in grazing land values, while arable land saw a smaller decline of 2.6%. South Australia and Western Australia bucked the national trend, with increases of 18% and 12% respectively.
Joules attributed South Australia’s growth to higher-value property sales, despite challenging seasonal conditions.
Rabobank’s report suggests easing pressures in 2025, with potential interest rate cuts and improved commodity prices.
“The 2025/26 outlook for key drivers is supportive of land values,” Joules said.
Early projections for winter crops and livestock production also point to a favourable year ahead.
Foreign investment in Australian agricultural land decreased by 38% in 2023/24, totalling $5.3 billion—the largest annual drop in 14 years.
Joules noted this decline reflects reduced corporate investment activity, particularly in the dairy sector, as profitability normalises.
While Queensland and New South Wales experienced growth due to favourable weather and livestock price rebounds, southern regions like Victoria faced declines. Victoria’s farmland prices decreased by 1% in 2024—the first drop since 2015—with significant declines in the North East and Wimmera regions.
These areas have been severely affected by drought, leading to reduced farm income and property transactions.
Both Rabobank and Bendigo Bank anticipate continued, albeit modest, growth in farmland values for 2025. Factors such as easing interest rates, improved commodity prices, and favourable production forecasts are expected to support the market, though challenges like drought and global trade uncertainties remain.
In other company news, Rabobank recently announced the appointment of Carolyn Colley to its board of directors.
