Opportunity knocks

About Us

Services

News and Market Insights

Browse

Terms

Vendor confidence across Australian farmland remains firmly intact heading into the second half of 2026, even as the sector confronts just how directly climate variability is shaping farm profitability. Average annual farm profit fell by 23 per cent between 2001 and 2020 due to the effects of seasonal variability, with the risk of very low farm returns having doubled since 2000, based on ABARES analysis. For a market where farmland values have continued to climb even as transaction volumes ease, this is prompting a more deliberate conversation among buyers, owners and financiers about how climate exposure factors into land value.

Australia has warmed by an average of 1.51 degrees since 1910, with a significant decrease in winter rainfall across southern Australia. That trend has been impossible to ignore over the past year, from flooding across Queensland, New South Wales and Victoria to drought conditions in the southeast followed by the Victorian bushfires this January, events that together illustrate how compounding these impacts can become. A growing number of regions are becoming harder to insure as premiums rise in response to extreme heat and bushfire risk, a cost increasingly factored into how buyers assess a property's long term holding cost.

This is playing out unevenly across the country, reinforcing a theme that has defined the farmland market for some time. The national median value reached $10,832.71 per hectare in the twelve months to March 2026, up 2.9 per cent on the $10,529.39 per hectare recorded in the year to March 2025, even as sales volume eased to 6,893 transactions, down 4 per cent on the year prior. That divergence looks set to persist as buyers become more selective about where and how they deploy capital. Properties with reliable water access, diversified production systems and demonstrated resilience to seasonal extremes continue to draw the strongest competition, while more marginal or single enterprise holdings in higher risk zones face a more cautious pool of purchasers. For vendors, this means water infrastructure, ground cover management and evidence of adaptive practice are becoming a more central part of the sales conversation than they were even a few years ago.


Wheat yields could decline by between 5 and 41 per cent by 2080 without adaptation, longer term modelling suggests, with the most significant impacts expected across Western Australia's cropping zones. More recent CSIRO work on climate ready wheat and sorghum varieties has identified breeding opportunities to better withstand higher temperatures, reduced water availability and shifting flowering windows, protecting the long term productivity of Australia's $4.5 billion wheat and sorghum industry. Separate CSIRO research into seasonal forecasting for irrigators in the New South Wales Riverina has shown that combining forecast rainfall and evapotranspiration data with on-farm conditions can materially improve both whole farm returns and water productivity, an approach with clear relevance for cropping regions further west.

Livestock production covers well over half of Australia's agricultural land. Wool production could fall substantially in parts of southern Australia by 2050 without adaptation, according to longer term modelling that continues to inform why genetic selection and pasture management are drawing increasing investment today. CSIRO's FutureFeed research into low methane feed supplements is helping the beef and sheep sectors work toward emission reduction goals while supporting productivity, a combination increasingly relevant as buyers weigh both production risk and compliance cost into their assessment of grazing country.

Export markets are placing growing weight on sustainability credentials, with environmental measures from major trading partners tightening requirements around traceability and emissions reporting. Properties able to demonstrate strong environmental practice are better positioned to support production destined for these higher value, higher scrutiny markets, adding a further layer to how buyers weigh a property's long term earning capacity.

None of this diminishes the fundamentals underpinning farmland as a long term asset. Australian producers remain among the most efficient in the world on a per hectare basis and the properties continuing to draw the strongest competition into the next cycle will be those combining genuine production capability with clear preparedness for a more variable climate, a combination increasingly recognised as core to how land is valued rather than a peripheral consideration.

Back to top