3 . RISE IN FARM PRICES
While high commodity prices have flowed through to house prices in many regional communities , it has of course also driven up farm prices . Rural Bank has been tracking median farm prices since 1995 . Since then , farm prices have risen from $ 1,000 a hectare to $ 6,000 per hectare . Like with most property types , COVID-19 has driven a sharp acceleration . This is not just because farms have become more profitable over the past two years , but also because of similar things that drove the housing market - very low interest rates , much easier access to finance and very high savings rates .
The majority of demand has come from local buyers . Over the past five years , the proportion of foreign owned land has increased only slightly from 13.6 per cent to 13.8 per cent . Reopening of international borders may change this , particularly given the strong performance of agricultural commodities in Australia over the past two years .
The outlook for farm prices remains strong . Values are expected to continue to grow off the back of strong demand , increasing profitability , strong commodity prices and low interest rates . Fewer transactions are also taking place due to consolidation of parcels and longer holding times .
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