The national median price per hectare rose to $8142/ha from $6891/ha in 2021 - NSW land values were up 19.9pc.
Prices for farm land across Australia are continuing to stun experts.
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The value of rural property has zoomed way past other investment opportunities such as the share market or residential real estate.
According to a deep dive into farm sales by one of the nation's leading rural real estate firms, Elders Ltd, farm land values jumped another 18.1 per cent last year on top of a 18.2pc rise the year before.
The national median price per hectare rose to $8142/ha from $6891/ha in 2021.
The value of farms is basically doubling every seven years.
Average growth rate compounded over the past five years was 10.5pc to the end of 2022, indicating the median price per hectare is doubling about ever seven years, Elders' analysts found.
In NSW, results in 2022 showed a strong increase in price, up 19.9pc to $8508/ha, the fourth consecutive year of double-digit increases.
Top performing regions included West and North West NSW.
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Sales volumes fell sharply, down by 41.9pc to 2333, with smaller parcel sizes dominating the overall transaction mix.
The median price per hectare rose by 20.5pc in recent sales, driven by increases in the Hunter, Northern Tablelands and Riverina Murray regions.
An international clothing manufacturer paid about $120 million for the major Murrumbidgee Irrigation Area farming operation Gundaline across 14,916ha (36,858 acres), Gundaline features 6000ha of flood irrigation country backed by access to surface and groundwater entitlements, as well as more than 17,000 megalitres of water storage. Picture supplied
Sales volumes held firm, rising by 0.7pc, primarily due to a decline in the Central and sharp increase in the Riverina Murray.
Elders Real Estate state manager in NSW, Richard Gemmell said sales of farmland across the state continue to occur with good competition reported by most of their agents, despite the expected increase in listings.
"Auction results throughout the Central Tableland districts continue to be in positive territory, with some very good listings in the pipeline about to hit the market that will provide some great opportunities for discerning investors," Mr Gemmell said.
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"With production being reinstated to align with more average seasonal conditions than we experienced at the end of 2022, throughout the cropping districts there has been a flurry of activity with paddock preparation in readiness for planting.
"There is some speculation around the traps as to how the market may react to interest rate rises and commodity prices, in particular beef, however, we continue to experience strong sale results across the board."
NSW real estate agents are expecting a big rise in the number of farm properties for sale over the next year.
Even though farm prices are staying sky high, there is much less land offered for sale, helping to drive the momentum along with stellar agricultural commodity returns.
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Elders' experts said the landscape for rural property has already changed this year.
At this year's ABARES conference, Australian farm production was found to have boomed beyond expectations, heading to a record value of $90 billion for 2022-23.
But drier seasons, increasing export competition and tighter global economic times are returning to chew into farmgate earnings.
Large scale 1645 hectare grain and grazing operation Warranoy sold at auction for $28 million. The sale price is equal to about $17,021/ha ($6891/acre). The farm is located on the South West Slopes near Young. Picture - supplied
There is also some uncertainty on how the season will unfold with the end of the La Nina climate influence and predictions of a developing El Nino.
Elders general manager (farmland agency and agribusiness Investments) Mark Barber said "some volatility" had crept into agricultural operating conditions.
He said it was still likely the relative performance of rural land as an asset class compared to other investment options is playing a strong role in investment decisions.
"Land holders are reluctant to sell out of agriculture unless they see viable investment options in other asset classes. Similar sentiment is held by buyers.
"Ongoing volatility in financial markets is likely to be supportive of farmland values.
"Cost pressures continue to erode margins, but there is limited evidence of a sustained change in demand for food and fibre.
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"We are seeing rising demand for farmland that can provide carbon sequestration and biodiversity credits," Mr Barber said.
"The farmland based carbon and environmental 'services; market will continue to evolve in 2023 and is likely to have an increasing impact on farmland values."
The volume of farm sales fell markedly over 2022 by 37.5pc to 5794 sales totalling $11.5 billion.
Elders market insights specialist, Matt Ough, found prices were still incredibly strong in most markets compared with 2021.
Mr Ough said it highlighted the resilience of rural property as an asset class.
Bernafay is principally 2767 hectares of flat, open plain country with creeks which sold for $6.52 million. The sale price of the cropping, sheep or cattle property is equal to about $2356/ha ($953/acre), setting a new benchmark for Nyngan district values. Picture supplied
Dwelling values in Australia fell 5.3pc in 2022, marking the largest calendar year decline in home values since 2008.
Meanwhile, the All Ordinaries share market index fell 8.2pc for the calendar year.
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In contrast, rural property prices surged to new heights in every state and territory, Mr Ough said.
Elders says it sources data for every rural property sale above 40 hectares in Australia from Corelogic before undertaking in-depth analysis to remove non-agricultural land uses and statistical outliers.
