Value of NSW farmland surges 26 per cent to $200bRural land values in the Hunter wine region soared in 2021, according to the Valuer General.

Value of NSW farmland surges 26 per cent to $200b

Strong demand for quality farmland, hobby farms and lifestyle estates sent rural land values soaring 26 per cent during the height of pandemic, the latest annual report from the NSW Valuer General shows.

Led by a 43 per cent rise in values in the Murray agricultural region centred around Albury and 31 per cent gains in the Hunter wine region, the total value of rural property in NSW rose above $200 billion for the first time over the 12 months to the end of June 2021.

In percentage terms, these gains surpassed a 25 per cent rise recorded in the $1.8 trillion residential sector, and another booming real estate sector, industrial, which gained 23 per cent over the same period.

“[Rural land values increases were driven by] strong commodity prices, limited supply and sustained demand for good quality farming, mixed cultivation and grazing lands,” said NSW Valuer General David Parker.

Dr Parker said it was the third year of gains for the rural property sector, after 5 per cent rises in the drought-affected 2020 and 2019 financial years.

In the Murray region in south-western NSW, an area dominated by agricultural activity, especially livestock grazing, the Valuer General said demand for farmland was driven in part by increased long-term confidence in the rural sector, “with a significant number of purchasers being existing landholders looking to expand their farming operations”.

In many rural regions, increase in value was driven by a combination of demand for farmland for grazing or cultivation, and city folk buying hobby farms or lifestyle estates.

In the commutable Hunter region, where rural land values increased by 31 per cent, the Valuer General noted there was “strong demand from city-based purchasers looking to relocate to rural properties that are lifestyle in nature”.

“Some of the strongest increases were experienced by smaller rural holdings in Pokolbin, which encompasses rural lifestyle properties, vineyards, wineries, and short-term accommodation,” Dr Parker said.

Rural property values in the Blue Mountains rose 31 per cent, and 20 per cent in the Hawkesbury.

These increases, the Valuer General said, were mainly due to “strong demand for rural/lifestyle properties, combined with increased demand from purchasers transitioning to remote working, which also had a positive influence on rural land values”.

Dr Parker said a 25 per cent rise in Orange was “underpinned by growth in regional residential markets and a continued trend of metropolitan purchasers seeking affordable lifestyle options in regional areas”.

In the Riverina farming region around Wagga Wagga and Griffith, demand for irrigation and cultivation land drove a 57 per cent rise in land values in places such as Berriquin.

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