The fall in farm commodity prices has not automatically translating to a fall in rural property prices.
The latest analysis of rural property prices from Elders Real Estate says the 2023 spring sales "will be telling" as to which way rural property prices and commodity prices move because there are other factors at play.
The latest Elders update shows median farm land prices across Australia have risen 1.9 per cent to $7852 per hectare.
It is the fifteenth consecutive quarter of growth.
The main driver of the continued run of high prices is the lack of property on the market for sale.
The "transaction mix" is favouring higher priced properties, Elders said.
The results were similar at state level, with increases recorded for four of the seven states and territories analysed.
The largest prices rises were again seen in South Australia, median prices lifting by 5.7pc.
There has been a divergence between property and commodity prices.
"The relationship between the two variables suggests there could be more subdued growth in median price per hectare in 2023 given the outlook for softer commodity prices is expected to continue in the short term," Elders report found.
"These factors could be partially offset by tight supply which will continue to play a role in demand for quality properties as will seasonal conditions which despite drier forecasts have so far proved favourable across much of the country."
Elders general manager (farmland agency and agribusiness investments) Mark Barber said the farm property market remains strong supported by low volumes of property coming yp for sale.
Continuing declines in total property sale volumes demonstrates strong confidence in the sector by Australian farmers, he said.
"There has been a change in the mix of properties coming onto the market in some regions causing some variation in results across states, but this does not indicate any shift in general price trends.
"Whilst there has been some short-term softening in commodity prices, other factors are likely to start driving further demand for land."
Mr Barber said commodity prices have settled back to 2020 levels while rural property prices have continued to climb, even with interest rates rising.
Queensland
Elders state real estate manager (Qld/NT) Tim Lane said the supply of commercial scale listings across the state was "tightening up" at present which should continue to support the current rates per ha seen over the last 3-6 months.
"July will be a good guide to see if interest rates, commodity prices and access to capital start to affect the buy side of a transaction," Mr Lane said.
"To date there has not been any evidence of that with demand for scalable property still strong."
The one year rolling median price per hectare increased by 2.3pc to $6430/ha in the first quarter .
Transaction volumes favoured the larger parcels in the West and Central regions compared to the previous quarter.
NSW
Elders' NSW state manager Richard Gemmell said strong inquiry continued across all categories of rural land for the first quarter, together with an expected increase in listings from the previous quarter.
"Sales achieved of both grazing and cropping country exceeded expectations with the view that listings would decrease as winter approaches," he said.
"Seasonal conditions will continue to play an important role in decision making as the winter crop sowing window remains ajar awaiting beneficial rains."
The one year rolling median price per hectare increased by 2.3pc to $8185/ha in the first quarter driven by increases in the Hunter, North Coast and Riverina regions.
Most of decline in transaction volume came from the Riverina Murray and South East regions.
Victoria
State manager Nick Myer (Victoria/Riverina and Tasmania) said all regions of Victoria and the Riverina witnessed strong enquiry throughout the first quarter.
He said quality assets continuing to be met with strong demand and excellent sale results being recorded across all industry sectors.
The one year rolling median price per hectare increased by 0.6pc to $12,597/ha in the first quarter driven by growth in Gippsland and the South West region.
Transaction volume decreased sharply, shifting the transaction mix in favour of larger parcels in the Wimmera-Mallee.
Tasmania
Enquiry levels have remained strong over all asset classes in the first quarter with certain regions witnessing record sale averages, according to Mr Myer.
The demand for rural assets continues to stem from a combination of local, mainland and international investors.
"We expect this trend to continue throughout the balance of the year."
The one year rolling median price per hectare decreased by 6.9pc to $9786/ha in the first quarter driven by a contraction in higher priced parcels in the North West region.
South Australia
SA state real estate manager Phil Keen said cropping areas continue to perform strongly with examples of record prices in some areas.
"Grazing property demand has slowed driven by softer livestock prices," he said.
"We have seen some hesitation with potential sellers going to market despite close to or record high land prices."
Median price per hectare increased by 5.7pc to $6708/ha in the first quarter driven by a larger proportion of lower priced cropping parcels selling in the first quarter of the year.
Transaction volume increased driven by high volumes on the Eyre and Yorke peninsulas.
Western Australia
WA sale executive Simon Cheetham said the supply of quality WA farmland has remained tight "for some time", as noted by the drop in transaction volumes across the state.
"Buyer demand remains strong, with several transactions recently negotiated off market.
"Qualified buyers are positioning themselves to purchase those properties to be marketed during our late winter/spring selling season."
The one year rolling median price per hectare fell slightly by 0.7pc to $6306/ha in the first quarter.
However, growth remained positive at regional level particularly for eastern WA.
Northern Territory
Alison Ross from Elders Katherine said the demand for both pastoral and farming land across the Top End remains strong.
"Whilst there has been recent uncertainty around quarantine matters with Lumpy Skin detections in Indonesian feedlots, investors are still looking for agricultural investments for long term supply of beef," she said.
"The cotton gin (near Katherine) is moving closer to completion with most cotton now harvested and baled in the north, many producers have chosen to stockpile to avoid added freight costs for processing."
With only a few sales, the rolling median price per hectare fell by 8.1pc to $2084/ha in the first quarter of the year but analysts say the result "should be treated with caution" because of those low numbers.