Australian farmland values are at record highs — but the farm profitability picture underneath them varies so dramatically by state and enterprise type that serviceability assessments for rural loans need to be treated as individual cases, not national averages.
Ray White group head of research Vanessa Rader's (pictured) latest analysis shows the national median farmland price reached $11,032 per hectare in the March quarter of 2026, building on the $10,979 per hectare recorded across the full year of 2025. Transaction volumes, however, fell to 1,055 nationally for the quarter — down 35% on the same period a year earlier, reflecting a market where vendors with strong operating returns have little financial incentive to sell.
The state-level picture is varied. Queensland recorded a 14% lift in median price year-on-year — matching the national median of $11,032 per hectare — alongside a 45% fall in volumes. Victoria saw the largest price movement of any state, reaching $16,268 per hectare against a similarly sharp volume contraction.
South Australia was the exception, with prices essentially stable at $10,415 per hectare and volumes down just 7%. Western Australia continued its longer run upward trajectory, reaching $7,650 per hectare, underpinned by strong production fundamentals.
The volume decline has a clear driver: operating returns are making voluntary sale an unattractive proposition.
In sheep and wool country, the numbers are particularly striking, with the National Trade Lamb Indicator at the 10th decile of its historical range and the wool market's Eastern Market Indicator at its highest point since March 2019. Producers running those enterprises are watching prices that make selling the land underneath those returns a difficult decision to justify.
The cattle sector tells a similar story. Rader noted that "cattle producers across eastern Australia entered 2026 with the National Young Cattle Indicator sitting close to 30% above year-ago levels, and the Eastern Young Cattle Indicator tracking at the 9th decile of its 10-year range."
When a grazing property is generating returns at that level, the incentive to sell weakens considerably regardless of what buyers are prepared to pay.
The picture is markedly different for cropping operations, where input cost pressures are cutting sharply into margins. The Middle East conflict has pushed domestic diesel prices more than 30% above pre-conflict levels and urea prices more than 80% higher — a significant burden given fertiliser and fuel account for close to a third of variable costs for crop farmers. ABARES forecasts average broadacre farm business profit will fall 70% in 2026–27 to around $65,000 per farm, with cropping operations bearing the heaviest load, average profit forecast to drop from $810,000 to $280,000.
The state-level profit forecasts make the divergence concrete. Rader observed that "NSW farm businesses are forecast to average a loss of $16,000 in 2026–27, shifting from a $161,000 profit the prior year," while Western Australian farms are forecast to average $151,000 despite a significant step down from the prior year.
ABARES acting executive director David Galeano put it plainly: "Farmers' decisions over the last few months have been shaped heavily by seasonal conditions and gross margins. Despite the headwinds facing the sector, farmers who have received favourable rainfall are making the most of the opportunity."
Despite the input cost pressures weighing on cropping operations, the structural conditions supporting farmland values remain intact. Rader wrote that "the farm property market is well supported heading into the second half of 2026," with prices holding or rising in most states, underpinned by vendor confidence and a supply environment she described as "among the tightest on record."
The federal budget's $1.1 billion Cleaner Fuels Program creates longer-run structural demand for canola as a feedstock, adding support for cropping land values in Western Australia and South Australia where canola production is concentrated.
For brokers writing rural and agribusiness loans, the headline land value story is broadly positive — but the income picture underneath it is deeply uneven. A beef producer in Queensland and a cropping operation in NSW are operating in fundamentally different financial realities right now — and the loans that serve them need to reflect that.
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