The report is the longest-running analysis of the farmland market in Australia and has tracked every sale annually for almost three decades.

It found the number of farmland transactions was down to its lowest level in 28 years, while sales were 40 per cent lower than a year earlier.

“Farmland transaction volumes are the lowest in a generation as potential vendors sit tight and more caution is exercised by purchasers weighing up their options,” Greg Kuchel from Rural Bank said.

Kuchel said there has been a drop in demand for grazing properties with the price of sheep and cattle falling, although demand remains high for good cropping land following strong results.

“While the overall national trend was a lack of growth in land values, median price growth in cropping regions generally kept pace with recent years as demand was sustained into early 2023 following another strong winter crop in 2022, with median values increasing in SA, Western Australia and NSW,” Kuchel said.

The median price of farmland in the first half of 2023 was only 0.1 per cent higher compared with a year earlier but a state-by-state breakdown tells a different story.

Source: Rural Bank Australian Farmland Values Report.

South Australia, Western Australia and New South Wales had the strongest year-on-year growth in the first half of 2023, with prices in the West and NSW increasing by around 15 per cent.

SA recorded a bump of around 13 per cent.

“South Australia was a standout with the North recording the largest rise in median price per hectare nationally with more than 82 per cent half on half and more than 203 per cent growth year on year,” Kuchel said.

The strong growth was driven by a substantial rise in median prices across cropping properties in particular.

“The Yorke and Mid-North also performed strongly with both these regions recording some stellar numbers for half on half transaction volumes,” he said.

The report found that the Adelaide/Fleurieu region has the third most valuable farmland in Australia at $17,500/hectare and the state’s median price per hectare was 12.9 per cent higher year-on-year.

Declining livestock prices are expected to weigh on the grazing property market over the back half of 2023 but in Murray & Mallee, values lifted to record levels over the first half of 2023.

“Half-yearly transaction numbers were also lower year-on-year, though were still the second highest recorded since 2017 – and the Eyre Peninsula median price also continued to trend higher,” Kuchel said.

-with AAP