Prices up but land sales fall

TASMANIAN farmland values have continued to rise despite a fall in transaction volumes.

A report from Rural Bank shows the state’s median price rose to a record high of $24,492 a hectare in the first six months of this year, a 7.5 per cent increase on a year earlier.

This was the sixth halfyearly period in a row that Tasmania’s median price rose year on year. 

However, the pace has slowed across the past two years with the first half of 2024 having the lowest rate of year-on-year growth in this recent period of increases.

The median price was also up 16.5 per cent from the second half of 2023.

However, the pace of growth has slowed, and even declined in some regions, as the pool of buyers has shrunk.

Due to low sales volumes the percentage changes look dramatic and average prices are volatile. 

Hesitancy has crept into buyer sentiment due to higher interest rates and recent periods of dry conditions and low livestock prices. 

Looking ahead, there is growing optimism of conditions improving that may entice some buyers back into the market. 

The report shows farmland values in the state’s North-West steadied in the first six months of this year, dropping by just 0.2 per cent with a median price per hectare of $28,827.

In the North the median value jumped 42.5 per cent to an average of $25,100 a hectare while in the South prices fell by 57.8 per cent to $8260 a hectare. 

The report says transaction volumes in Tasmania have tightened dramatically in the past 12 months. The number of transactions more than halved from the first to the second half of 2023.

The first half of 2024 saw a 14 per cent rise in sales from this record low level, lifting up to 49 transactions. Combined, the last 12 months recorded 92 transactions while the first half of 2023 alone had 97 transactions.

The bank says the low number of sales was driven by fewer properties being listed for sale and properties taking longer to sell as buyers fail to reach vendor asking prices. Expectations of lower prices have then fed into a reluctance to list properties for sale.

Despite the big variation in prices, the one consistent trend across the Tasmanian regions was a very low number of transactions. The North-West and North saw transactions lift from their record lows in the second half of 2023, while transaction volume in the South fell for a third consecutive half-yearly period to a new record low. 

Values in the state’s NorthWest have now entered a period of relative stability in the past 24 months following a doubling of sale values between 2019 and 2022.