On The Land
14 May, 2026
Farmland sales ‘subdued’
HIGHER farm costs exacerbated by the US-Iran war, the prospect of further interest rate rises and a mixed outlook for agricultural commodity prices were leading to a “weaker growth cycle” for Australian farmland prices this year and likely until 2031.
A new report from Rabobank said the median price per hectare was set to increase by approximately 2% in its “base case” forecast, which was well below the average annual growth rate of approximately 11 % over the past decade.
The agribusiness specialist bank report, the Annual Australian Farmland Price Outlook, was based on analysis of more than 2000 sales from 2025 from a data set of over 16,000 sales across the country since 2019.
This year’s forecast was a continuing trend of “constrained growth” in Australian farmland value.
Report lead author, RaboResearch commodity analyst Paul Joules, said the market had now transitioned into a “new phase’, which was likely to persist to 2031, driven by higher interest rates, softer commodity pricing and rising input costs.
“A key challenge, and one likely to remain a recurring theme in 2026, is the supply shock stemming from the Iran war,” Mr Joules said.
“The conflict has already driven fertiliser and diesel prices to exceptionally high levels, which are expected to have a material impact on margin potential across the sector.”
These impacts “underpin RaboResearch’s view” that (farmland) sale activity would be “subdued”.
Mr Joules said there were also signs the RBA could raise interest rates further in 2026, following recent hikes.
Last week’s lift in Australia’s inflation to 4.6% was also higher than expected and would add another factor to the report analysis.
Looking ahead, the report said conditions for farm budgets would continue to be challenging, with farmers under “significant pressure” compared to 2025.
Also based on the 2025 comparison, the report said grazing land was expected to outperform arable cropping land because of resilient livestock commodity prices.
