Increase in value of agricultural land exceeds all other property types, report finds

Australia Broadcast Center

26-05-2025

Farmland has increased in value more than any other Australian property type over the last two decades, a report has found.
The Australian Property Institute's (API) inaugural valuation report shows the value of agricultural land has increased by 256 per cent since 2005, compared to 154 per cent for housing over the same period.
The strongest growth was recorded in western Victoria's Wimmera region, where land values have skyrocketed by more than 800 per cent amid demand from the renewable energy, grain and grazing sectors, according to the report.
API chief executive Amelia Hodge said it was surprising that some that farmland had outperformed metropolitan property categories.
"It's really interesting that the Wimmera region has come out the winner over 20 years," she said.
"Agricultural land has come out nationally as the best performing category."
Australia's smaller capital cities outpaced Sydney and Melbourne in housing value growth over the last two decades.
In Adelaide prices rose by 175 per cent since 2005 and by 172 per cent in Hobart.
Sydney residential property prices grew by an average of 171 per cent during that time.
Prices in Brisbane and Melbourne increased by 169 per cent.
Inflation rose by 67 per cent over the same period.
The API report drew its comparisons using data from the Australian Bureau of Statistics, the Australian Bureau of Agricultural and Resource Economics, Suburbtrends and Colliers Edge.
The Gold Coast was the top performing regional residential market and six other Queensland regional cities were in the top 10.
Wimmera-based real estate agent Nick McIntyre said it used to be hard to sell farmland in the region.
"You look back 20 years and we were in the middle of the Millennium Drought and prices were going nowhere," he said.
Mr McIntyre said a "perfect storm" of low interest rates, strong commodity prices and favourable seasons had driven prices up.
"We saw property prices double and double again – and in some instances double again – from about $1,000 to $2,000 to $4,000 to even $8,000 an acre," he said.
The API report noted the rise in the value of farmland in the Wimmera was also driven by the conversion of land into solar farms.
But Mr McIntyre disagreed with that assessment and attributed the growth to production capacity.
"Seasons are very reliable and even in the driest of years they can almost always get some sort of crop, whereas that's not always the case in other areas," he said.
Minyip farmer Ryan Milgate said the swing towards grain growing and away from livestock production had boosted prices.
"The change in our farming systems and our ability to successfully grow crops like lentils, I think, has underpinned why the Wimmera is such a sought-after cropping area," he said.
But Mr Milgate said high land values had put a lot of pressure on those who had expanded and he expected prices to flatten out.
"The capital value of the land doesn't reflect the capacity of the land to produce, so one of the real issues is there has been a real squeeze in return on investment," he said.
"It's important to note the vast majority of farmers are here for the long-term and the capital value of our land is just a number on a piece of paper.