Demand for Australian farm land has come off the boil and basically flatlined in the first half of 2023, according to one of the nation's biggest farm lenders.
South Australia is still bucking the trend, farm sales in SA's north recorded the largest rise in median price per hectare nationally rising more than 203 per cent in a year.
Rural Bank (part of the Bendigo and Adelaide Bank group) says its research shows the boom run of farm sales has ended nationally.
Low sales volumes, which helped prop up the stellar prices, have now fallen to their lowest levels in the past 28 years.
Farmers waiting to offload land are now praying for the early demise of El Nino, interest rate falls and a bounce in commodity prices, especially for livestock.
South Australia's farm land valued fell marginally across the first half of 2023 but remained higher year-on-year with lower supply offering support.
The statewide median price fell to $6892/ha, a decline of 2.4pc over the past six months with analysts from Rural Bank saying a fall in median prices during the first half of the year is relatively normal.
Declining livestock prices are expected to weigh on the grazing property market over the back half of 2023 in South Australia.
Transaction volumes declined slightly with 501 sales recorded over the first half of 2023.
Half yearly sale volumes have been on the rise since 2020 with the marginal decline indicating landholders are now becoming increasingly hesitant to sell.
The Yorke Peninsula and Mid-North performed strongly with both these regions recording some stellar numbers for half on half transaction volumes.
The Adelaide/Fleurieu region has the third most valuable farmland in Australia at $17,500ha and the state's median price per hectare was 12.9pc higher year-on-year.
The North SA region saw the largest rise in median price per hectare in the nation driven by a substantial rise in median prices across cropping properties in particular.
Rural Bank expects falling livestock prices will weigh on the grazing property market over the back half of 2023 but in Murray and Mallee, values lifted to record levels over the first half of 2023.
Half-yearly transaction numbers were also lower year-on-year, though were still the second highest recorded since 2017 - and median prices across the Eyre Peninsula also continued to trend higher.
Rural Bank property analyst Greg Kuchel said farm land transaction volumes are the lowest in a generation as potential vendors sit tight and more caution is exercised by purchasers weighing up their options.
Mr Kuchel said the "prevailing view" was that interest rates would hold around current levels for some time.
The national median price of Australian farmland in the first half of 2023 rose 0.1 per cent compared with a year ago, Rural Bank said.
Good cropping land is in high demand in some regions, particularly WA and SA, but demand for grazing properties has cooled.
"There's simply less competition now with a smaller pool of prospective buyers," Mr Kuchel said.
Rural Bank said falling commodity prices(down 35 per cent from its peak in June 2022), drier conditions, means less income and less appetite from farmers looking to expand operations.
The bank's Farmland Values Report has tracked every farmland sale annually for almost three decades with extra data from Digital Agriculture Services.
Its mid-year analysis says after a sustained period of strong growth, farmland is now more tightly held and prospective buyers are carefully reassessing land purchasing decisions.
While the overall national trend was a lack of growth in land values, prices for cropping country generally kept pace with recent years with values rising in South Australia, Western Australia and NSW.
"In contrast, demand in grazing regions was weakened by declining livestock prices and far weaker median price growth in Victoria and the Northern Territory, followed by negative growth in Queensland and a dramatic decline in Tasmania, largely confined to the northern region of the state," Mr Kuchel said.
The standouts, according to Rural Bank, were the Great Southern region of WA and South Australia's north.
Other regions to perform strongly were Victoria's Mallee, western Queensland and the New England and northwest regions of NSW.
Other states
NSW
NSW was the only state to record growth from the second half of 2022 and has now overtaken Queensland to have the third highest state median value per hectare.
NSW was up 14.9pc compared with the first half of 2022 and 12pc higher than second half of 2022 with median value driven higher by strong growth in New England and North West, Riverina Murray and the North Coast.
Transaction volumes for the half-year were also the lowest in the last 28 years.
The median price per hectare of farmland continued to rise throughout the first half of 2023, with prices supported by this tightening of supply.
Victoria
Victoria saw more modest growth, but the most valuable farmland in Australia is still in Gippsland at around $25,000ha.
The median price per hectare in Victoria remained higher than a year earlier in the first half of 2023 - but fell from the record level of the second half of 2022.
The Mallee was a highlight up more than 46pc year-on-year, as was the Wimmera and Ovens Murray region with solid growth - but transaction volumes were also down.
Queensland
The median price per hectare for Queensland farmland fell in the first half of 2023 representing a year-on-year decline of 3.1pc and a 4.5pc fall from the last half of 2022.
Before 2023, Queensland had experienced a four-year run of increasing median price.
Notably, half of Queensland's regions recorded half-year increases with declines in the other half.
Western Queensland recorded the largest increase to median price per hectare of any region and Central areas the largest fall.
Western Australia
Western Australia saw the strongest year-on-year growth in the first half of 2023 and all regions except for the Southwest posted year-on-year increases in median price.
WA Farmland values have been on a strong upward trend in recent years with the state's median price in the first half of 2023 up almost 170pc compared with the past five years.
The first half of 2023 had the lowest number of transactions for a half-yearly period in a generation - the last 28 years.
Tight transaction volumes were a consistent theme across all regions in WA with year-on-year declines in transaction volumes ranging from almost 20pc for the Great Eastern to 72pc for the Northern region.
Values in the Great Southern region reached record highs over the first half of 2023 driven by a sharp decline in supply.
And in Great Eastern WA, after posting two consecutive halves of declining values the region rebounded in the first half of 2023 with a record median price.
Tasmania
North west Tasmania has the second most valuable farmland in Australia - but Tasmania still recorded a decline in the value of farmland in the first half of 2023 following an exceptional period of growth in the previous three years.
The median price per hectare in the first half of 2023 was 24.7pc than a year earlier - a distinct shift from the previous three half-yearly periods which had year-on-year growth ranging between 15-33pc.
Northern Tasmania's median price fell dramatically in the first half of 2023, to its lowest point since the second half of 2019 but this decline may reflect the low number of sales - being low-value grazing properties, rather than of an overall substantial decline in property values in Tasmania.