WA farmland values take a dive as north, south struggle
The average value of WA farmland took a dive in 2017, falling by 6.5 per cent.
The decrease, based on the median value per hectare, follows a 3.1 per cent increase in 2016, according to Rural Bank’s third annual Australian Farmland Values report.
The number of farmland transactions completed also decreased across the State, as well as the area and value of those transactions.
In 2017 there were an estimated 677 farmland transactions across WA, in which about 483,000 million hectares changed hands for close to $788 million.
According to the latest report, farmland values were driven up across three of the five regions of WA addressed in the report.
Values decreased markedly in the northern and southern regions of the State. However, the eastern part of WA region recorded more than 50 per cent increase year-on-year.
Rural Bank said there was a smaller volume of low value sales in 2017 compared to 2016, which led to a significant increase in the median value per hectare in the east. Strong growth occurred in Yilgarn, Westonia, Koora, Narembeen and Mount Marshall.
The 2017 report reveals that while land values are flat over five and 10 years, since 1998 farmland has increased at a solid annual growth rate of 5 per cent.
Rural Bank regional manager for agribusiness Tim Batger said results of the 2017 report highlighted the importance of taking a long-term view.
“While 2017 saw a decrease in the WA farmland median value, it’s important to keep in mind, farmland is a long-term investment,” Mr Batger said.
“Volatile climate and market conditions characterise farming across the country and as a result, it is inevitable these — alongside many other factors — will contribute to fluctuations in farmland values.
He said despite falls in farmland values recorded in two of the five regions of the State, buyer interest in WA was strong in 2017 – underpinned by corporate investor enquiry – particularly around the central Wheatbelt.
The report is produced by Rural Bank’s specialist market insights division Ag Answers, which tracks the median price of commercial farmland per hectare based on data collected over a 23-year period.
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