Farmers are busy consolidating their land holdings, bank lender says

The bank says foreign and institutional funds are now making up a larger share of buyers in the rural property market.

NAB's head of valuations and property advisory, Mark Browning, said consolidation was the key word in farming.

"In recent years we've also seen records set in some commodity prices, swinging overcorrections, and bounce backs almost as fast," he said.

"But rural property markets are not too tightly tied to the short-term or commodity cycles.

"Buyers are generally more concerned with longer-term factors and business planning - investing in good cropping or grazing land is a decision made with an eye decades beyond the next sales season."

NAB's analysis of its lending business over the past year also revealed farmers appetite to invest.

"Despite an adverse interest rate environment, a projected dry summer and some difficult trading conditions, demand for credit from the agriculture sector grew by 9.1 per cent," the NAB report found.

NAB's Regional and Agribusiness Horizons Report 2024 released today expected neighbour-to-neighbour land sales will remain typical.

"We will likely see fewer intra-regional purchases as farmers consolidate and grow their core business," Mr Browning said.

The report said foreign and institutional funds are making up a larger share of buyers and are interested in cropping and enterprise properties worth more than $50 million.

For foreign buyers in particular, any transaction made while the Aussie dollar is under US70 cents reflects a favourable purchase, the report found.

"As the pace settles and the agriculture industry starts to look further into the future, market participants and strategies are evolving," Mr Browning said.

"Further consolidation and segmentation, rather than diversification, are expected over the horizon," Mr Browning said.