FARMLAND sales and values in the Mildura municipality have slumped, while the wider Mallee region has recorded its eighth consecutive year of growth.
Growth in the median price per hectare in 2022 was led by the Central region, which recorded a 52.3 per cent increase, closely followed by the Mallee with a rise of 45.3 per cent, according to the Rural Bank Victoria’s Australian Farmland Values 2023 report.
But while key Mallee local government areas of Buloke and Swan Hill rose by 79 per cent and 37 per cent respectively, farmland in the Mildura local government area fell by 17 per cent in 2022.
Moorabool, west of Melbourne, was the only other LGA in Victoria to record a downturn in farmland values, a 33 per cent decline.
Mildura’s farmland value last year sat at a median $1453 per hectare, well below Swan Hill at $3397 and significantly down on Buloke’s $7536 per hectare.
The longer-term compound annual growth rate for Mildura was also well below Mallee overall at 4.9 per cent over the past five years (23.5 per cent overall for Mallee); 2.8 per cent over the past 10 years (13.9 per cent overall); and 3.9 per cent over the past 20 years (9.3 per cent overall).
The Mallee region overall recorded an eighth consecutive year of growth in its median price per hectare in 2022 following a 25.5 per cent rise in 2021.
Growth accelerated to 45.3 per cent in 2022 following a 25.5 per cent rise in 2021, helping the median price to more than triple over the past eight years with growth of 275 per cent since 2014.
Rural Bank Victoria said that similar to other areas of the state, a drop in supply available on the market contributed to the price growth in 2022.
Transaction volume for the Mallee fell 42.9 per cent to 60, including just seven in the Mildura LGA, a record low for the region.
This was a reversal of the growth trend in the preceding two years.
The decline in transaction volume was most dramatic for larger parcel size with an 81 per cent decline in the number of transactions larger than 400 hectares in 2022.
The number of transactions smaller than 200 hectares remained relatively steady.
As a result, parcels smaller than 200 hectares accounted for 57 per cent of the region’s transactions, up from 33 per cent in 2021.
There was an increased proportion of transactions above $5000 a hectare, which jumped from 21 per cent of total transaction volume in 2021 to 48 per cent in 2022.
Overall, Victorian farmland values increased for the seventh consecutive year in 2022 as strong demand and tightened supply applied upwards pressure on the median price per hectare.
The median price increased by 26.3 per cent in 2022, a minor slowdown from a 30.4 per cent rise in 2021.
This was only the third year since 1995 that all regions have seen growth in their median price and the second year in a row, and only second time in the last 28 years, that all regions in Victoria saw price growth of at least 20 per cent.
Rural Bank Victoria agribusiness manager Kathryn Davies said Victoria’s farmland values, overall, continued to break records again in 2022 following a year of strong growth in 2021.
“The slowdown in transaction numbers reflects buyer caution and deeper business consideration off the back of rising interest rates and input costs,” she said.
“With good growing conditions, an easing in some commodity prices from record highs and continued higher interest rates, purchasers are conducting deeper analysis to ensure that higher purchase prices don’t harm the overall returns that can be generated.”
Ms Davies said this would likely lead to lower growth in property prices for 2023.