Climate has always shaped Australian agriculture.

Rainfall reliability, drought exposure and land productivity influence farm performance, profitability and long-term land value. Yet historically, the relationship between climate risk and farmland value in Australia has been difficult to measure.

Property transaction data, climate datasets and productivity indicators have traditionally existed in separate systems across multiple state jurisdictions. This fragmentation has meant that much of the industry’s understanding of how environmental conditions influence rural land prices has remained largely anecdotal.

The Australian Rural Property Sales Report 2025, released by DAS, addresses this gap by integrating rural property sales with climate and productivity data to quantify how environmental factors are influencing land values across Australia.

Using the DAS Rural Sales Dashboard, the analysis examined every rural property transaction  across Australia in 2025, linking each sale with rainfall reliability, drought exposure and long-term land productivity.

The results show that climate risk is already being priced into Australia’s farmland market.

Key findings: What is driving farmland values in Australia?

How rainfall reliability affects farmland values

Rainfall reliability is one of the strongest predictors of farmland value. Across Australia’s central agricultural zones, the analysis found that each additional millimetre of average annual rainfall corresponds to approximately $9–12 per hectare in land value.

This relationship creates a significant pricing gradient between low-rainfall and high-rainfall farming regions. Higher rainfall areas consistently transact at higher per-hectare values due to stronger agricultural productivity and more stable farming conditions.

How drought exposure affects farmland value

Historical drought exposure also shows a strong relationship with land values. Regions with higher cumulative drought exposure typically transact at lower price intensity. For example:

• Regions with no recorded drought years since 1995 recorded median farmland values of approximately $19,972 per hectare
• Regions with four or more drought years recorded median values closer to $7,200 per hectare

This suggests that long-term climate stress is already reflected in farmland pricing across Australia.

How land productivity influences farmland prices

Land productivity, measured through Net Primary Productivity (NPP), also shows a strong pricing relationship.

NPP measures the amount of biomass generated by land systems over time and reflects the underlying productive capacity of soil, vegetation and climate conditions. NPP results can vary between neighbouring properties due to differences in land management and farming practices over time.

The report found that Australia’s highest productivity farmland transacted at nearly three times the per-hectare value of the lowest productivity land. This demonstrates that biological productivity remains a key structural driver of rural land value.

Which regions had the most rural property activity?

Queensland led national activity in 2025, with seven of the ten most active Local Government Areas located within the state, particularly across the Darling Downs region. This reflects strong activity across grazing and mixed farming systems.

Tasmania experienced the largest regional increase in farmland values nationally. One northern Tasmanian Natural Resource Management Region recorded a $10,839 per hectare increase in median land value within a single year, driven by demand for high-quality grazing and mixed farming land.

Why this analysis matters

Australia’s rural property market is increasingly shaped by environmental performance. Regions with reliable rainfall and strong productivity tend to command higher per-hectare values, while areas with greater climate variability often transact at larger scale with lower pricing intensity.

For investors, lenders, insurers and rural property professionals, understanding how climate risk affects farmland values is becoming increasingly important as climate variability continues to influence agricultural performance.

How the analysis was developed

The report was developed using the DAS Rural Sales Dashboard, a data product designed to improve transparency and high speed price discovery for the Australian rural property market.

The platform integrates:

• Rural property transaction data
• Land use mapping
• Rainfall and climate indicators
• Long-term productivity metrics

By linking these datasets, DAS enables rural property transactions to be analysed alongside the environmental conditions that shape agricultural performance.