TASMANIAN rural property over 40 hectares jumped in value by 16.1 per cent last year, according to Landmark Harcourts' Benchmark report.
The report, which collated data of State-wide sales for the 12 months to November 2013, suggested larger holdings (40ha plus) appreciated the most, while blocks smaller than 40ha dropped in value by 2pc.
Landmark Harcourts Tasmania director John Hewitt said the sale of a few larger aggregations may have boosted the overall value of these larger holdings, which averaged a median price of $6200/ha for its 153 sales.
A 655ha cropping property at Longford sold for $7 million while 896ha of grazing land at Tomohawk sold for $2.6m and a viticulture block (464ha) made $2.4m.
Dairy proved the most expensive with land at Circular Head, selling at $12,351/ha, followed by Meander Valley holdings, which cost $9387/ha.
Despite it being the most expensive in the State, Rabobank Tasmania Manager Greg Bott said dairy land "had just stopped".
"Since 2009, when land values dropped after a low milk price, it's been very difficult to sell dairy farms," said Mr Bott, who added new money was required to reinvigorate a dawdling market.
"If you talk to farmers on the ground, they're not talking the prices that they were in 2008."
He said there was a dislocation between the current asking price for dairy farms and buyer expectation, particularly given current market conditions.
"The general sentiment of those who are looking to buy is that they should be even cheaper," he said.
Mr Bott said there were a few run-down dairy farms available for sale, which had dragged the market down, but the core issue of a lack of buyers remained.
"The past two periods of growth in land values in Tasmania have been off the back of waves of New Zealanders coming over to buy properties," he said.
"There's been almost none of them coming over since 2009."
He said declining land values meant farmers had less equity to borrow money to put back in the market.
Cumulative sales in the Northern Midlands were higher than in any other region in the State at $23.5m, av $8885/ha, which Mr Hewitt attributed to good poppy and prime lamb prices.
He also expected irrigation schemes - the Lower South Esk scheme, completed in October last year, and the Midlands scheme, which will go live during the 2014-15 irrigation season - to improve the value of land in that area by encouraging further investment to capitalise on the water access.
Beef properties were becoming more irregular, Mr Hewitt said, but an area of concern was intensive cropping land, which was "under pressure at the moment".
A recent Rabobank report titled Tasmania's Future with Irrigation suggested the problem with the State's vegetable industry was scale.
Average farm sizes were 32ha which, according to senior analyst Marc Socio, was not giving farmers economies of scale.
The report showed income for farmers with planted areas of 20-70ha was considerably lower than for their mainland counterparts.
About 80 of the 153 sales of larger holdings last year were for properties of 40-100ha.
Dairy land, according to Mr Bott, was "ready to turn the corner" and just needed the impetus of consistent medium-term milk prices.
Mr Hewitt said despite high farmgate milk prices - Fonterra Australia recently announced a closing milk price of $6.80-$7 for the season - the benefits would take a while longer to filter through to land values and market activity.
"A lot of investors like to see the numbers before they invest," said Mr Hewitt, who had received interest from Europe, NZ and China.