BROADACRE land values have been on the rise across Australia and on a faster trajectory than other commodities, according to a recent report from Rabobank.
Titled 'Over Shot and Undershot: Unlocking Opportunities to Buy Australian Cropping Land', the report analysed broadacre farmland prices over the past five years.
Authored by Rabobank agricultural analyst Wesley Lefroy, the analysis found Australian cropping land to have risen by 9.1 per cent in five years, compared to 5.1pc in dairy land values and 2pc for pastoral grazing land.
"Demand for cropping land has been particularly intense over this period, which has accelerated the increase in cropping land prices, relative to other commodity sectors," Mr Lefroy said.
"Initially, we saw demand for cropping land swell as a result of a string of favourable seasons, which enabled farmers to expand."
He said that price growth varied significantly between regions, making inter-regional property purchases "more compelling for farmers".
The report wrote that micro or regional factors have typically been bigger drivers of land price movements, for example rainfall (volume, timing and consistency), access to regional centres, regional confidence and different soil types.
These factors can all influence local market's supply and demand and create different price trajectories for varying regions.
Over the past five years, cropping land values remained the lowest compared to the other States, with the central Wheatbelt seeing 1.4pc in growth, the South Coast had an increase of 2.6pc and the Great Southern rose by 3.2pc.
The report attributed this slowing of growth to "unique soil types and variable rainfall in some areas of WA, namely the central Wheatbelt".
That being said, in Rabobank's land price outlook report 'More Smoke, Less Fire', released in July, WA had the biggest increase in land prices with 28pc, compared to the national average of 15pc.
This recent report found a weak correlation between Australian broadacre land prices and absolute land prices, the rate of land price growth and yield potential.
