Farmland sales fell off the cliff across Victoria last year, down almost 60 per cent on the year before.
The amount of the land traded fell to 104,446 hectares, the smallest area in the last 28 years.
Thanks to record median prices of $13,366/ha, despite that low volume of sales, it was still the fourth most valuable selling year since 1995 - worth a total of $1.3 billion.
One of the nation's biggest farm lenders, Rural Bank (part of the Bendigo and Adelaide Bank group), say a number of market "headwinds" have softened the market.
Farmland values across the state rose for seventh consecutive year as strong demand and tightened supply applied upwards pressure on the median price per hectare, the bank said.
The median price rose by 26.3 per cent in 2022, a minor slowdown from a 30.4 per cent rise in 2021.
The upwards shift in median price per hectare was consistent across all of the state's regions - only the third year since 1995 all regions have seen growth in their median price.
The Rural Bank report showed growth last year was led by the Central region which recorded a 52.3pc increase in median price per hectare.
This was closely followed by the Mallee with a rise of 45.3pc.
Growth in the Ovens Murray, South West and Wimmera regions was marginally lower but still strong at 34-36 per cent.
The lowest growth rates were seen in the Goulburn, South and West Gippsland and East Gippsland regions which were still very strong at 21-23 per cent.
This was the second year in a row, and only second time in the last 28 years, that all regions in Victoria saw price growth of at least 20 per cent.
The number of farmland sales fell by 44.6pc to 1007 in 2022.
This was the lowest number of transactions on record for the state.
Rural Bank said the biggest drops occurred in the Central and East Gippsland regions with falls of 55-59pc.
Falls of just under 50 per cent occurred in South and West Gippsland, Ovens Murray and Mallee regions.
Kathryn Davies, Rural Bank, Victoria said: "Victoria's farmland values continued to break records again in 2022 following a year of strong growth in 2021.
"The slowdown in transactions numbers reflects buyer caution and deeper business consideration off the back of rising interest rates and input costs.
"With good growing conditions, an easing in some commodity prices from record highs and continued higher interest rates, purchasers are conducting deeper analysis to ensure that higher purchase prices don't harm the overall returns that can be generated.
"This will likely lead to lower growth in property prices for 2023."
While analysts say land prices will keep rising it will be at a slower pace to signal the end of the record run.
Only a tightened supply of farms for sale last year kept those headwinds at bay and saw yet more price records.
The bank points to an "inflection point" to finally slow the growth in values recorded right around Australia.
Farmland sales last year equated to 8.8 million hectares of land valued at $11.7 billion.
READ MORE: See our list of big property sales for 2022
For comparison, wheat exports from last year's bumper harvest have been valued at $14.2 billion and in 2020-21 red meat and livestock exports totalled $14.6 billion.
The amount of land which changed hands is similar in size to a European country such as Hungary.
The bank's annual deep dive into Australian Farmland Values said some of the drivers of the farmland price boom in recent years had changed.
Tracking every farmland sale annually for almost three decades, the 2023 Rural Bank report is the longest running analysis of the farmland market in Australia.
Interest rate rises are starting to bite, agricultural commodity prices began to fall during the second half of 2022 plus the cost of key farm inputs hurt cash flows.
Although, as Rural Bank's analysts point out, farmland values are still expected to rise as demand still outstrips supply but not to the same extent as recent years.
Rural Bank's head of agribusiness development Andrew Smith said: "While there was enough momentum to sustain growth in farmland values in 2022, the continuation of these headwinds into 2023 could begin to drive a slowdown in growth."
Mr Smith said it was unlikely farmland values had yet peaked or were headed down.
"Rather, the new level of interest rates, downturn in commodity prices and potential for a drier finish to 2023 points to farmland values reaching an inflection point.
"Growth is still expected in 2023, albeit at a slower rate than the previous two years."
The Rural Bank report said farm land prices kept rising last year for the ninth consecutive year.
Land prices jumped another 20pc last year, following the 20pc rise the year before.
The national median price per hectare for Australian farmland is $8506 per hectare.
According to the bank's many years of data, farm prices have risen by 167pc in nine years.
Hold onto your broadbrimmed hats, the Northern Territory recorded a stunning price growth of 108pc.
Across the states in 2022, Tasmania soared on its median price per hectare with a 54.9pc lift.
Victoria, South Australia and Western Australia all recorded growth of more than 20pc closely followed by Queensland and NSW with increases of 15.9pc and 18.9pc respectively.
According to Rural Bank records, was the first time growth of over 15pc was recorded across all states and territories in 28 years..
The supply and demand equation came into play as the number of farm properties available for sale last year fell sharply.
Nationally, the number of farmland transactions fell by 34.3pc to 6588 - the lowest level of transactions in 28 years.
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