FARMLAND prices in Australia have almost doubled over the past three years with low interest rates and healthy commodity prices contributing to the growth spurt.

The average per-hectare price for broadacre farmland rose by 93% from 2020 to 2023, according to new data from the Australian Bureau of Agricultural and Resource Economics and Sciences.

Jared Greenville from ABARES said the “extraordinary” growth in recent years can be put down to increased demand for land amid low interest rates and strong commodity prices.

“Farmland is often used to secure lending, so increases in value can both improve equity and drive investment,” Dr Greenville said.

But with commodity prices now lower and interest rates higher, prices are no longer expected to rise at the same rate.

“We wouldn’t expect the same kind of trend to continue on,” Dr Greenville said.

The biggest price hikes have been in high-rainfall areas, where the price has increased by 125% over three years to $9000 per hectare.

The wheat-sheep zone has also experienced strong growth, jumping by 80% to $3465 per hectare over the same period.

The average price of pastoral farmland increased by 130% over the three years to hit $1528 per hectare in 2023.

But not all areas experienced growth in that time with South Australia and Tasmania both recording small falls across the three-year period.

The data also examined and compared prices between 1992 and 2023, determining land had increased on average 1200% across Australia in those years.

Western Australia witnessed the biggest price hikes of around 2200% in that time, while South Australian farm prices recorded the smallest growth with prices up 20%.

Dr Greenville said the latest farmland price estimates can now be accessed through ABARES’ new Farmland Price Index online tool.

“Users can make price comparisons between farming zones or download data for their own analysis,” he said.