Summary: The booming market for farmland has hit an inflection point as declining commodity prices, dry weather outlook, and higher interest rates impact sales.
After years of growth, the market for farmland is experiencing a turning point due to declining commodity prices, a dry seasonal outlook, and higher interest rates. The median price per hectare grew by only 0.1% in the first half of 2023, signaling a slowdown in growth. The volume of transactions has hit a 28-year low, with the lowest number of willing sellers in a generation. However, cropping areas with good seasonal conditions, such as the Great Southern region in Western Australia, continue to see steady farmland values. Family corporate farms have been the driving force behind farmland value growth, as they are willing to pay higher prices for adjacent or nearby land.
Tags: farmland, sales, declining commodity prices, dry weather, interest rates, market, transaction volume, cropping areas, family corporate farms