Factors Influencing Farmland Price Trends in 2026
Rabobank’s latest annual Australian Farmland Price Outlook anticipates modest growth in farmland prices for 2026, with an expected increase of approximately two per cent in median price per hectare. This prediction follows a year of 0.4 per cent growth in 2025, which marked a recovery from a 2.6 per cent decline in 2024. The growth remains below the decade’s average of 11 per cent annual increases.
Rabobank’s RaboResearch division attributes the moderated growth outlook to mixed agricultural commodity prices and elevated farm input costs, partly due to geopolitical tensions, including the Iran war. Additional factors influencing this outlook include the prospect of further interest rate hikes, which could put pressure on land values.
In 2025, grazing land prices saw a notable increase of three per cent, unlike arable land values, which declined by one per cent. This was supported by lower interest rates, as the RBA cut the official cash rate by 75 basis points. The interest rate cuts made land acquisitions more attractive.
Paul Joules, a RaboResearch commodity analyst, remarked, “Our base case forecast expects Australian agricultural land values to continue rising in 2026, with the median price per hectare projected to increase by around two per cent year-on-year.” He noted that this moderate growth cycle is expected to persist until 2031.
2025 Land Value Insights
Grazing land showed substantial growth in regions like South Australia and New South Wales, with increases of 23 per cent and 22 per cent respectively. However, New South Wales experienced an 11 per cent decrease in arable land values. The report also highlights a rebound in foreign investment during 2024/25, with a 34 per cent rise in new foreign capital, amounting to AUD 7.1 billion, primarily invested in livestock land.
Looking ahead, Rabobank suggests that challenging farm budget conditions will continue in 2026, driven by rising input costs and interest rates. Potential El Nino conditions could further impact agricultural production. Grazing land is expected to outperform arable land again, buoyed by resilient livestock prices. Meanwhile, modest gains in grain and oilseed prices are anticipated, though global supply constraints might limit these improvements.
Rabobank’s analysis emphasises that the market has transitioned into a phase of moderate growth, likely to persist over the coming years. Higher interest rates and softer commodity pricing will influence land value trends. As a result, stakeholders should prepare for a more stable but slower growth environment in the agricultural sector.
Last updated: 29 April 2026, 7:04 pm
