Queensland Rural Market Report H1/26

Rural Queensland is navigating a more complex market environment, with mixed seasonal conditions and rising cost pressures shaping both agricultural performance and property market activity. While some regions continue to benefit from strong demand, the broader outlook reflects a transition to more selective conditions.

Agricultural output across Australia is forecast to decline 4.9% to $104.45 billion in FY26, with export values expected to fall 8%. At the same time, broadacre farm profits are forecast to drop 70% in FY27 as higher input costs and softer revenues place increasing pressure on margins.

Economic and seasonal drivers

The economic backdrop remains mixed, with Australian growth improving to 2.3% in FY26, alongside elevated inflation of 5.0%, contributing to higher operating and financing costs.

Seasonal conditions across Queensland are varied, with stronger rainfall in northern regions supporting production, while southern and central areas remain drier. A warmer winter outlook and the potential influence of El Niño are expected to sustain above-average temperatures, reduce soil moisture recovery and increase bushfire risk in some parts of the state.

Rural property market

Transaction activity has softened notably, with 728 rural property sales recorded in 2025, down 30% year-on-year and below long-term averages.

In contrast to declining volumes, price growth has been strong. The average rural property price rose 28.2% to $8,740 per hectare, following significant gains of 84% over the past five years.

Demand remains strongest for grazing assets, particularly in regions benefiting from favourable conditions, while lower-quality and arable assets are more exposed to margin pressures and softer buyer demand.

Commodities and farm performance

Commodity markets continue to deliver mixed outcomes. Livestock prices are expected to ease, with cattle forecast to decline 3.4% and lamb 9.1% in FY27 as demand softens.

At the same time, several sectors are showing resilience, including wool (+11.9%), cotton (+8.7%) and wheat (+22.1%), supported by global supply dynamics.

Rising input costs remain a key challenge, with fuel, fertiliser and feed expenses expected to stay elevated. Combined with drier conditions in some regions, this is increasing reliance on supplementary feeding and placing further pressure on farm profitability.

Outlook

Rural Queensland is entering a period of rebalancing, with lower transaction volumes and divergent performance across regions and asset types. While short-term pressures remain, strong demand for quality grazing land and long-term fundamentals continue to underpin the market.

As conditions stabilise, opportunities are emerging for buyers, while premium assets in well-performing regions continue to attract interest in a more selective market.