Ararat farmland value bucks national trend

Farmland value across the nation has increased but not in Ararat. 

The Rural Bank and Rural Finance’s 2016 Australian Farmland Values report conducted by Ag Answers an examination of farm sales all the way back to 1995 gave a positive picture of farmland value in Australia.

The report was based on more than 230,000 transactions.

It identified a general trend that over the last 20 years, farmland across Australia has seen an average growth rate in price of 6 per cent and one of 3 percent over the last 10 years.

In 2016, the median value of Victorian farmland rose by 12.9 per cent. Victorian farmland of a total value of $1.1 billion was traded. 

LAND VALUE: Despite Ararat farmland values showing a decrease in the last few years, farmland across Australian has shown a long term value increase.

LAND VALUE: Despite Ararat farmland values showing a decrease in the last few years, farmland across Australian has shown a long term value increase.

Total value of farmland traded in 2015 was 14.1 percent higher than in 2016 however and farmland transactions showed a decrease of 18.7 percent. 

Ararat saw an estimated 47 farmland sale transactions in 2016. However, the median cost per hectare of farmland in 2016 was $3,817, down on the three year average of $7448.

In the south-west region of Victoria, high value sales in the Pyrenees, North and South Grampians, Glenelg, Hepburn and Moorabool saw an increase in farm land value of 13.3 percent.

However, fewer sales in the Colac-Otway municipality, Northern Grampians and West Wimmera meant a 2016 transaction decrease of 14.6 percent. 

“Ararat falls into a couple of sub regions which cover the central highlands and the southwest. At the municipality level, it has decreased,” Rural bank general manager Agribusiness Andrew Martin said.

 “It is the trend that is important over time. Not just one year. A different region means different outcomes.” 

Some of the factors that the report did not include were transactions passing land between family members and small farms in an effort to exclude the impact of lifestyle farming on the figures. 

“We try to get a view of actual sales. We leave out sales that do not reflect true market value,” Mr Martin said.