![Growth rates around WA's farmland regions. Source: Rural Bank Australian Farmland Values 2024. Growth rates around WA's farmland regions. Source: Rural Bank Australian Farmland Values 2024.](/images/transform/v1/crop/frm/79654223/1dfdbe4e-8646-44f6-b5e4-49a007e1454e.JPG/r0_1172_1984_2869_w1200_h678_fmax.jpg)
FARMLAND property sale times have extended in WA, as acquisition decisions become more considered.
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In its 2024 Australian Farmland Values report, Rural Bank said though WA bucked the national trend to have a rise in farmland transaction volumes last year, there had been a shift towards properties that directly addressed "a need or present a clean business opportunity".
While family farming operations continue to buy quality properties - particularly in the Great Southern and other reliable rainfall areas - the more deliberative approach has opened a window for corporate investors to return to the market.
Given the longer timeframes for corporate investors to complete their due diligence, they have found it less feasible to compete in the soaring and fast-paced market of recent years.
The median price for farmland increased across all WA regions, except for the Great Eastern, meaning the State is alone in Australian in experiencing accelerated growth in farmland values.
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Northern
In the Northern region, the median price per hectare rose 47.2 per cent last year, to hit a record $3854/ha.
But the region was the only one in WA to see a drop in sales volumes, as demand outstripped supply and farmers moved to release larger landholdings to the market.
The Northern region led growth on a regional level, particularly driven by land-use changes on the eastern fringes of the Wheatbelt, which saw land traded for solar and wind farms at much higher prices.
Four consecutive years of growth saw the region's 20-year compound annual growth rate (CAGR) reach 7.9pc in 2023, while the five-year CAGR sits at 23.7pc.
CAGR measures the return on investment over time - for large capital companies a 5pc-12pc CAGR is considered good, while smaller companies would look to 15pc-30pc.
In the Northern region, farmland transactions reached a seven-year low of 49 sales, the lowest volume recorded in the State.
"Large properties saw significant growth, with median prices for parcels exceeding 300ha experiencing increases ranging from 80.7pc to 162.4pc,'' Rural Bank said in the report.
"While the decline in the smaller range might dampen the overall increase slightly, the relatively stable proportion of these size categories and the substantial growth in larger parcels saw the overall median price rise.''
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Central
The Central region had smaller but still strong growth in median values of 19.2pc year-on-year, to $5891/ha.
That means the region's median price has increased in five of the past six years.
The 20-year CAGR is now 9.8pc, the State's second highest.
While still strong, the pace of growth slowed from the 52pc and 54.9pc seen in 2021 and 2022 respectively.
"This could indicate buyers are placing greater emphasis on conducting thorough evaluations and aligning purchases with long-term strategic objectives leading to a more measures approach to farmland investment,'' the report states.
Almost half of sales were for farms of 50ha-200ha, though the median price in this range fell 57.2pc year-on-year.
Only two properties worth more than $15,000 were sold in this parcel size, compared with 21 in 2022.
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Great Eastern
The Great Eastern was the only region to see a decline in median price in 2023 of 12.4pc, to $1632/ha.
This followed a 60.8pc increase between 2021 and 2022.
The price softening saw the 20-year CAGR fall to 6.2pc.
The market was busy though, with more farms sold in 2023, the second largest seen across the State, though fewer 50ha-300ha properties changed hands and they were cheaper at a median of $3088/ha.
Bigger properties of 300-900ha were in demand - with the shift towards bigger properties a significant contributor to the region's median price.
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Great Southern
The Great Southern experienced exceptional growth in the median price in 2023, for its sixth consecutive year, and increased sales volumes.
Rural Bank said demand for mixed farming and cropping properties remained strong, helping lift the median price 30.4pc to a record $8493/ha in 2023.
It was a significant lift, which saw the 20-year CAGR lift to 10.9pc, the highest of any region over the period.
The supply of farms for sale rebounded last year, after four years of decline, to have the highest number of transactions.
"Growth in median price across all parcel sizes indicates broad-based demand for farmland in the region, not just for specific property types,'' Rural Bank states.
"This creates a general upward pressure on prices.''
The proportion of sales worth $6000 to $15,000 increased by more than half last year, which helped push the median price upwards.
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South West
There was a big rebound in prices in the South West, with a 38.8pc increase in median values last year, to $15,237/ha.
Rural Bank said the region had been volatile over the past decade, with prices dropping in five of the past 10 years, but reliable rainfall and high productivity still made the region's farmland an attractive investment.
However, the volatility meant the 20-year CAGR was the lowest in the State, sitting at 5.5pc in 2023.
Availability made a big jump, up 37pc to 100 transactions, driven by a rise in smaller properties of 80ha-100ha going onto the market.
The overall sales market was dominated by modest parcels of less than 120ha.
Rural Bank said demand for higher-price land also rose, with the proportion of sales of more than $10,000/ha increasing significantly to comprise 80pc of all transactions in the region.
"This shift towards premium-price, smaller parcels pushes the region's median price per hectare to a record high,'' the report states.
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Avon-Midland
Exception growth in Victoria Plains, Toodyay and Northam significantly skewed the trends for the Avon-Midland region, which has seen its median price increase for five of the past six years.
Median price hikes of 359pc, 325pc and 215pc in the three areas respectively, pushed the overall median price to $8219/ha.
It meant the Avon-Midland 20-year CAGR was 8.7pc in 2023.
Sales numbers, which had declined for two consecutive years, plateaued last year with the total land traded having the biggest regional decline, dropping by 45.8pc.
"This significant decrease can be attributed primarily to a sharp decline in large property transactions above 600ha - plummeting from 22 in the previous year to just six in 2023,'' Rural Bank states.
The increase in properties of 50ha-200ha onto the market also drove the growth in median values, with the proportion of transactions involving smaller, higher-priced properties naturally pushing median price values upwards.
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