A decline in farm sales has helped keep Victoria as one of the best performing rural property markets across Australia.
Buoyed by another solid spring/ summer season, the annual median price rose 15.3 per cent to $14,441/ha, the eighth successive year of gains.
The latest analysis of national farm sales saw markets bounce back after a sluggish start to last year.
The Elders property update reveals average growth rates rose more than 10 per cent last year, the eighth successive rise.
Elders' deep dive into property sales showed the national median price of farmland rose to $8625 per hectare last year.
Victoria has been one of the best performing rural property markets across Australia, with recent gains pushing the five-year compound annual growth rate to 12.7pc.
Like other east coast markets, property values recovered strongly across Victoria late in 2023 after a dip in the first half of the year to finished the year well above levels at the end of 2022.
Victorian prices have fluctuated closely around a solid upward long-term price trend for the past few years, before breaking upwards in the second half of 2023.
By the end of the year, activity had recovered to levels close to the previous year, however, this was below the levels of 2020 and 2021.
Elders Real Estate sales executive (Vic/Tas) Nick Myer said the market has witnessed a reset over the past year across most sectors.
Mr Myer said there has still been a "continuation of strong demand for quality rural and lifestyle assets in key regions of Victoria and Riverina".
Australian farm land is doubling in value every seven years.
Many buyers have been priced out of the market by the stellar rise of farm prices, which experts say are set to continue.
The strongest performing state was Tasmania with annual median price rises of 58.7pc, followed by Western Australia and Victoria with 17.6pc and 14.6pc, respectively.
Land prices in Queensland rose 10.2pc, NSW was up 9.1pc while South Australia was down 2.7pc and the NT fell 0.9pc.
South Australia in particular was coming off the back of spectacular price rises in previous years.
Elders general manager (farmland agency and agribusiness investments) Mark Barber said property prices have been remarkably resilient.
"This latest rise pushes the five-year compound annual growth rate to 10.1pc, a rate that, if sustained, would see property prices double every seven years," Mr Barber said.
"In comparison, these returns compare favourably to the top performing Australian equities and Sydney residential property."
After facing some headwinds including falling commodity prices, rising input costs and poor seasonal outlook through the early part of 2023, the key drivers turned in favour of rural landholders from mid-2023.
Key commodity prices stabilised, input costs fell, weather conditions improved, and interest rates peaked.
This combined to sharply lift confidence across the rural sector and provide the impetus for price rises in 2023, Elders said.
One driver for continued high prices is the low number of properties for sale - Elders say farm offerings 13.9pc as farmers reacted to a softening in market conditions in the early part of 2023
"By the end of 2023 we saw farmers terms of trade start to recover, and seasonal conditions improved despite earlier dire predictions," Mr Barber said.
This led to a rebound in farmers' confidence and the price volatility from early in 2023 reversed in the second half of the year.
The Elders property update is based on data for every rural property sale above 40 hectares in Australia from Corelogic before applying its own analysis.
"Robust seasonal conditions combined with an improvement in terms of trade for Australian farmers look set to underpin rural property values through to spring 2024," the report states.
"The main threat to this outlook could be geopolitical events that may unsettle shipping lines and cause spikes in freight rates and key input prices (oil and fertilser).
"Demand for agricultural land will continue to be underpinned by family and corporate investors alike as a 'safe haven' investment in times of instability for global equities."