Australia’s rural property market appears set for a consolidation phase after an extraordinary five-year surge that saw farmland values more than double, according to Ray White Group head of research Vanessa Rader (pictured).
Rader says the fundamentals remain sound, but several indicators now point toward stability rather than further growth as producers turn more defensive.
“Five consecutive years of good rainfall have supported strong production,” she said. “But cropping enterprises could face margin compression, while livestock operations may benefit from better pasture conditions.”
That divergence is emerging at the same time broader market data is showing clear signs of levelling. Bendigo Bank figures indicate the national median farmland price slipped 3.1% in the first half of 2025 to $9,885/ha, marking the first time since 2013 that year-on-year growth stalled at the start of a year. Sales volumes also dropped to just over 3,100 transactions — a record first-half low — as tighter margins in cropping, dairy, and horticulture made buyers more cautious and shifted more activity into lower-priced states.
Rader says this cooling is not distress-driven but reflects a market preparing for the next stage of the climate cycle.
“The market’s memory of the devastating 2018–2019 drought remains fresh, and prudent operators are building resilience rather than expanding,” she said.
Transaction volumes have mirrored that mindset, falling to just 2,258 sales in 2024/25 as farmers and investors choose to hold land amid uncertainty. The lack of forced sellers has supported values despite the slowdown.
This shifting sentiment is also influencing buyer behaviour. Bendigo Bank notes that properties in marginal areas are taking longer to sell, with high land prices increasingly limiting the buyer pool to operators with stronger margins or economies of scale.
Rader says the wide variation across commodities means some sectors face more pressure than others, and buyers are responding accordingly.
Future activity will hinge heavily on interest rate settings. If the Reserve Bank delivers additional cuts, transaction levels may pick up earlier than prices. But Rader stresses that the rapid 25% annual gains seen in 2021–2022 are now firmly in the past.
Instead, she expects regional variation to dominate outcomes, with water availability, land quality, and proximity to processing infrastructure carrying far more weight than broad national trends.
“For rural property investors, this consolidation phase offers time to assess holdings and prepare for the next cycle, whenever it may come,” she said.
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