Australian farmland prices have fallen for the first time in over a decade as the property market adjusts to slower demand, tighter margins, and changing seasonal conditions. After 12 years of uninterrupted growth, the first half of 2025 brought a cooling period that saw both buyers and sellers taking a step back, according to Bendigo Bank’s latest Unpacking Ag podcast.
Senior Agricultural Analyst Sean Hickey said the market had clearly hit a pause. “Properties are taking longer to sell as the result of current market conditions which have pushed the number of farm sales downward to a 30-year low,” he said.
Hickey noted that many buyers in marginal areas were delaying purchases or rethinking expansion plans altogether, particularly in cropping regions where soft cereal prices and lingering drought had curbed enthusiasm. “Ongoing strength in livestock markets revived sentiment in 2025, which should prove supportive in terms of demand for grazing properties over the back half of the year where seasonal conditions were positive,” he said. “But we saw a real divergence in terms of commodity prices for the livestock and cropping sectors over the last 12 months, which has shifted demand for grazing versus cropping land.”
He added that improved rainfall across much of the country could restore momentum. “The improved rainfall totals we saw across the country are also expected to remove a key headwind to demand over the back half of 2025 and into 2026, so it will be interesting to see if this pattern continues.”
Agricultural Analyst Joe Boyle said that while widespread distressed sales had not emerged, the earlier dry conditions had dampened appetite. “Dry conditions across much of the country in 2025 were a major headwind to demand, contributing to diminished buyer appetite,” he said. “Dairy farmers are benefitting from a rise in farmgate milk prices, but margins across the dairy sector remain under pressure which is limiting price growth in those dairying areas.”
Boyle said the lack of feed had pushed up costs across parts of South Australia and Victoria, affecting demand for grazing land, though the outlook was improving. “Limited feed for livestock also remained an issue across South Australia and Victoria with feed and fodder costs skyrocketing, impacting demand for grazing properties, however, we see Queensland and New South Wales remaining well positioned for growth in 2026.”
With interest rates expected to ease and seasonal conditions stabilising, the analysts expect modest recovery ahead. “We’re beginning to see a general shift in sentiment towards a more positive tone, at least from a high-level perspective,” Boyle said. “A further rate cut or two, combined with the hope for some better seasonal conditions have the potential to remove or at least reduce some of those major demand headwinds, so we’re anticipating a return to modest growth across 2026.”
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