Elders launches industry-leading rural property update
Elders recently announced the launch of a quarterly industry update reporting on rural property trends.
Elders Rural Property Update is the only one of its kind to provide quarterly data and analysis on the value and volume of rural property at national, state, and regional levels.
Released in April, the update has shown a significant increase in the national price of farmland rising to $7,060/ha, up 18.4 pc compared to 2020, a record rate of appreciation at national level.
Tom Russo, Elders Executive General Manager Real Estate says the quarterly updates are data-backed, high frequency insights into the booming rural property market, complemented by analysis and commentary from Elders’ rural property experts across Australia.
“In 2021 we saw even greater confidence in the agriculture sector off the back of exceptional seasonal conditions, high commodity prices and favourable interest rates,” Mr Russo says.
“There remains a seemingly insatiable appetite for Australian farmland from both local players and large institutional investors. Elders’ updates will support decision making in this area and provide greater insight into the drivers behind, and outcomes of, future trends.”
The Rural Property Update shows price per hectare continued to rise in Q4-2021, with the national median price per hectare increasing by 3.6 per cent (pc) to $7,635/ha, driven by strong demand in Queensland (+26.9 pc), South Australia (+32.0 pc) and Tasmania (+37.7 pc). In contrast, median price hectare decreased in New South Wales (-0.7 pc) and Western Australia (-25.2 pc).
Annually, national median price per hectare equated to a significant increase of 18.4 pc in 2021 to $7,060/ha, led by robust performance in Western Australia with a 41.0 pc increase. Western Australia has been the strongest performing market over the past three years with 2021 recording the highest increase in median price per hectare in the current growth phase, driven by the strength of the grain industry and a tight supply or properties.
Findings show that transaction volume increased by 3.4 pc in 2021, to 9,098 properties, the highest volume since 2017. This increase was caused primarily by an influx of listings in the South Australian market (+18.1 pc), particularly in cropping regions, and an increase of 13.5 pc in New South Wales the country’s largest rural property market by transaction volume.
Despite positive growth in transaction volume for the 2021 calendar year, volumes have been declining at quarterly level since Q2-2021, a sign that supply could tighten further in 2022. This phenomenon has been exasperated by minimal sell side drivers – aside from profiting from high prices and generational changes, there are minimal reasons for sellers to list.
“Sellers looking to egress the sector are benefiting from relatively tight transaction volumes driving prices higher and making for a more competitive sales landscape,” Mr Russo says.
“With a number of factors driving confidence in rural property investment and interest rates to remain relatively low, we expect supply will tighten further in 2022, suggesting further growth in media price per hectare.”
Elders source transactional level data for every rural property sale above 40 hectares in Australia from Corelogic before undertaking in-depth analysis. All commentary and insights are formed from the extensive local experience of the Elders rural real estate network, as well as the in-house analysis team who specialise in agricultural commodities and assets.
Download your copy of the Rural Property Update and subscribe to future editions.