Australia’s once-booming farmland market has ground to a halt. After years of surging prices driven by pandemic-era demand, national agricultural land values have plateaued at around $9,600 per hectare – marking a turning point in one of the most dramatic rural property cycles in the country’s history.
“Australia's farmland price boom has hit the brakes,” said Nerida Conisbee (pictured), chief economist at Ray White. “After explosive growth that saw national agricultural land values more than double since the pandemic began, prices have essentially plateaued.”
In 2021 and 2022, Australian agricultural land values rose around 25% annually. But by 2024, national growth had slowed dramatically – to just 2%.
“The numbers tell a compelling story of a market that has fundamentally shifted,” Conisbee said. “It's a dramatic deceleration that signals rural property markets are entering a new phase characterised by regional divergence rather than uniform national growth.”
Surprisingly, this cooling has occurred despite strong commodity prices and generally favourable seasonal conditions. The traditional drivers of farmland demand remain, but other factors are reshaping the rural property landscape.
According to Rabobank’s 2025 Australian Farmland Price Outlook, farmland values are projected to grow modestly by 3% in 2025, following a 6% decline in 2024. This pullback comes after a substantial 79% surge in values between 2020 and 2023, reflecting a recalibration of the market.
One of the starkest signs of market change is a collapse in transaction volumes. Only 2,258 rural properties changed hands in 2024 — less than half the annual average in the mid-2010s.
“Transaction volumes have collapsed to their lowest levels,” Conisbee said. “This suggests low levels of distress – no one is being forced to sell. But also lower levels of buy demand.”
The slowdown reflects caution in the face of global economic uncertainty. Farmers and investors who might have bought or sold are now holding back, creating an unusual mix of price stability and market stagnation.
“Farmers and investors who might previously have transacted are holding off, creating an unusual combination of price stability and market paralysis,” Conisbee said.
Though the national average has flattened, rural land markets across the states are now moving in very different directions.
“Western Australia bucked the national trend with robust 18.7 per cent growth in 2024, while New South Wales experienced a sharp 24.4 per cent correction that wiped out much of its recent gains.”
Tasmania continues to post the highest rural land values in the country – over $18,000 per hectare – while the Northern Territory remains the most affordable at around $5,000, despite seeing growth of 11.9% in 2024.
“These divergent paths suggest local factors – from mining activity to lifestyle migration patterns – now matter more than broad national agricultural trends,” Conisbee said.
A closer look at specific land uses reveals major contrasts in performance. Dairy farming, typically a stable sector, was unusually volatile in 2024, with prices soaring 83% in Tasmania but falling 45% in South Australia due to drought.
“The decline in South Australia is being driven by drought conditions in this state,” Conisbee said. “The result in Tasmania is more surprising as this state is also experiencing drought however it may reflect fewer transactions, and perhaps slightly better weather conditions.”
Forestry emerged as the strongest performer of 2024 with growth of 48.6%, reflecting rising investor interest in carbon farming. Meanwhile, traditional cropping land fell by 3.8% nationally, indicating a tougher period ahead after years of strong returns.
Hobby farms continue to fetch eye-watering premiums – over $229,000 per hectare – driven by ongoing lifestyle migration.
“The hobby farming sector continues to command extraordinary premiums… a reflection of ongoing lifestyle migration trends and the premium city residents will pay for rural amenity,” Conisbee said.
The outlook suggests the national rural property market is entering a new phase. Uniform price growth has given way to a patchwork of regional stories, shaped by local conditions, new economic drivers, and evolving land use.
“Australian agriculture is undergoing structural change. Carbon farming, for example, is creating new sources of land value.”
With prices largely stalled and transaction volumes down, the market appears stuck in a holding pattern.
“Prices may have stopped rising rapidly, but the lack of transaction activity means fewer options for buyers,” Conisbee said. “This holding pattern is likely to continue for a while longer however ongoing interest rate cuts are likely to create more opportunities for both buyers and sellers.”
Future trends will depend on monetary policy and global commodity dynamics.
“The timing of this shift will largely depend on how aggressively the Reserve Bank cuts rates and how quickly agricultural commodity prices respond to global economic conditions,” Conisbee said.
With global supply issues and geopolitical uncertainty continuing to support commodity prices, farmland values remain underpinned – but for the market to regain momentum, more rate cuts may be needed.
“If rates fall meaningfully over the coming months, we could see transaction volumes recover well before prices resume their upward trajectory,” Conisbee said.
