Lands in the Yorke and North have experienced a drop in value according to Rural Bank's newly-released report, 2019 Australian Farmland Values.
Though these areas boast a higher median price per hectare in comparison to the South East and Eyre Peninsula, they've experienced slow growth.
In 2017, the average hectare was selling for $4,706, but in 2018 the same hectare was worth $4,257, shaving off $450 in value.
The 9.5 per cent decline has come off the back of a strong growth period, with land value having increased by 37.8 per cent in 2017.
What's the reason for the decline in the Yorke and North?
There are many variables at play, with drought undoubtedly being one of them. Purchasing property and expanding the business are long term decisions that aren't made lightly. Drought can affect buyer confidence; however, it isn't the only reason the regions have seen a price drop.
It could also be attributed to the higher cost of land in the Yorke and North areas, with lands in the Eyre Peninsula worth an average of $1,403 per hectare. An area in the Eyre Peninsula is worth a third of the Yorke and North, so unless large plots of land are being sold, the Yorke and North won't see the same type of growth the Eyre Peninsula is currently experiencing.
However, there is good news for Mount Remarkable, Orroroo Carrieton, Peterborough and the Copper Coast, regions which all enjoyed at least 30 per cent growth in land value.
Clare and Gilbert Valleys, Goyder and Northern Areas also experienced an increase in the number of transactions for 2018.
I wouldn't hang your hat up just yet: Over the past 20 years, the Yorke and North maintained an average annual growth of 6.2 per cent. With this in mind, land values are expected to increase for the region in the long term.
You can find Rural Bank's 2019 Australian Farmland Values report here.
Written by Erin Connellan