New South Wales Rural Market Report H2/26

Rural New South Wales is entering a more balanced phase, with softer rural property values, lower sales activity and ongoing cost pressures shaping market conditions. While farm profitability is forecast to weaken and some regions face elevated bushfire risk, the state's agricultural sector continues to be supported by its scale, diversity and long-term land value growth.

After a prolonged period of strong capital growth, rural property prices have adjusted in 2025 as buyers respond to higher operating costs, changing seasonal conditions and a more complex economic environment. Despite this moderation, rural land values remain significantly above historical levels, reflecting the enduring appeal of quality agricultural assets across New South Wales.

Economic and seasonal drivers

Australia's economic outlook remains mixed, with economic growth forecast to slow to 1.5% in FY27 while inflation is expected to remain elevated at 3.3%. Higher borrowing costs and ongoing operational expenses continue to influence decision-making across the agricultural sector.

Seasonal conditions across NSW are expected to vary by region. The Bureau of Meteorology forecasts above-average rainfall across northern inland areas between November and January, while rainfall prospects remain more neutral across southern and south-eastern regions. Temperatures are expected to remain above average across the state, contributing to a notably warm start to summer. At the same time, heightened bushfire risk is forecast across northern and south-eastern NSW, where drier conditions and high fuel loads are increasing fire danger.

Rural property market

Transaction activity has eased from recent highs. Rural NSW recorded 1,393 broadacre farmland sales in 2025, a decline of 19% from the previous year and below both five-year and long-term averages. Despite lower sales volumes, NSW remained Australia's largest rural property market, accounting for 39% of all rural property transactions nationally.

Property values have also moderated. Average rural property prices fell 9.4% in 2025 to $7,686 per hectare following several years of strong growth. Despite the decline, values remain 39% higher than five years ago and 216% above levels recorded two decades ago. Coastal NSW recorded the highest average farmland values at $10,852 per hectare, followed by Riverina and the Tablelands.

Commodities and farm performance

Farm operating conditions remain challenging, with elevated input costs continuing to affect profitability. Broadacre farm costs are forecast to remain around $734,000 per farm in 2026-27, while overall farm input prices are expected to rise a further 1.7%. Farm profitability is forecast to decline significantly, with average broadacre farm business profits expected to fall 39% as lower production volumes and weaker livestock returns place pressure on earnings.

Commodity conditions remain mixed. Livestock markets are forecast to soften, with cattle prices expected to decline 4.2% and lamb prices 4.6% in FY27. However, stronger outlooks are emerging in several key agricultural sectors, including wheat (+23.0%), wool (+15.3%), cotton (+12.3%), sugar (+4.7%) and dairy prices (+3.5%). These sectors may help offset weaker conditions elsewhere across the agricultural economy.

Outlook

Rural NSW is transitioning into a more measured market environment after a period of rapid growth. Lower transaction volumes and softer land values suggest a market reset, while elevated costs and seasonal uncertainty continue to influence producer sentiment.  

Nevertheless, the state's long-term agricultural fundamentals remain compelling. Strong food production capabilities, diverse commodity exposure and limited supply of quality farmland continue to support the market. As conditions stabilise, opportunities are emerging for buyers seeking scale and productivity, while premium agricultural assets remain well positioned for long-term growth