Farm sale prices have cooled across the state after a record run

Price trends across state at the end of 2023 consolidated at below peak levels of the year before.

This is according to the latest analysis of national farm sales which saw most markets bounce back after a sluggish start to last year.

The Elders property update reveals average growth rates rose nationally more than 10 per cent last year, the eighth successive rise.

Elders' deep dive into property sales showed the national median price of farmland rose to $8625 per hectare last year.

For South Australia, the annual median price in 2023 was $6175/ha down from the 2022 peak of $6346/ha although still well above 2021 levels of $4320/ha.

Elders Real Estate's SA sales executive Adam Chilcott said land use within the regions of SA were so diverse it was difficult to track quarterly trends in land values at a regional level.

"For example, within SA regions, land sales could be to viticulture, cropping or livestock and the mix of these property sales can affect median sale values," he said.

"However, what is clear is the strong long-term upward trend."

The analysis also found lower sales volumes last year across most regions.

Regional price trends fluctuated across SA with the higher value, higher rainfall areas being variable around a higher price trend.

Values in marginal areas were more volatile around the higher price trend.

Nationally, farm land is doubling in value every seven years.

Many buyers have been priced out of the market by the stellar rise of farm prices, which experts say are set to continue.

The strongest performing state was Tasmania with annual median price rises of 58.7pc, followed by Western Australia and Victoria with 17.6pc and 14.6pc, respectively.

Land prices in Queensland rose 10.2pc, NSW was up 9.1pc while South Australia was down 2.7pc and the NT fell 0.9pc.

South Australia in particular was coming off the back of spectacular price rises in previous years.

Elders general manager (farmland agency and agribusiness investments) Mark Barber said property prices have been remarkably resilient.

"This latest rise pushes the five-year compound annual growth rate to 10.1pc, a rate that, if sustained, would see property prices double every seven years," Mr Barber said.

"In comparison, these returns compare favourably to the top performing Australian equities and Sydney residential property."

After facing some headwinds including falling commodity prices, rising input costs and poor seasonal outlook through the early part of 2023, the key drivers turned in favour of rural landholders from mid-2023.

Key commodity prices stabilised, input costs fell, weather conditions improved, and interest rates peaked.

This combined to sharply lift confidence across the rural sector and provide the impetus for price rises in 2023, Elders said.

One driver for continued high prices is the low number of properties for sale - Elders say farm offerings 13.9pc as farmers reacted to a softening in market conditions in the early part of 2023

"By the end of 2023 we saw farmers terms of trade start to recover, and seasonal conditions improved despite earlier dire predictions," Mr Barber said.

This led to a rebound in farmers' confidence and the price volatility from early in 2023, reversing in the second half of the year.

The Elders property update is based on data for every rural property sale above 40 hectares in Australia from Corelogic before applying its own analysis.

"Robust seasonal conditions combined with an improvement in terms of trade for Australian farmers look set to underpin rural property values through to spring 2024," the report states.

"The main threat to this outlook could be geopolitical events that may unsettle shipping lines and cause spikes in freight rates and key input prices (oil and fertilser).

"Demand for agricultural land will continue to be underpinned by family and corporate investors alike as a 'safe haven' investment in times of instability for global equities."