Increasing land values – A growing source of disputes?

The property market across metropolitan Western Australia has been making headlines with rapid price increases. However, farmland values are setting an even stronger pace. According to the 2023 Rural Bank report released in May 2024, farmland values have outpaced the housing market for the last decade, with WA leading the nation in recent growth.

While the Rural Bank’s mid-2024 report showed a 12.1% dip in median price per hectare since late 2023, WA farmland still sits at a 24.7% year-on-year increase, holding a median of $6,846 per hectare. This sustained increase highlights the lasting strength of farmland as an asset, but it also brings its own challenges.

For most agricultural businesses, land is not only their most valuable asset but also their most versatile—serving as a site for crops and livestock, a home, a security for financing and, for some, a leasing or sales opportunity. With favourable economic conditions, many farm operators see this as a prime time to expand, sometimes bringing in the next generation or acquiring neighbouring properties.

Yet, with greater land value often comes greater complexity. The importance of solid, regularly reviewed land and succession arrangements cannot be overstated, particularly in family enterprises. Disputes over succession, especially where non-farming family members are involved, are all too common and can cause significant emotional and financial strain if not addressed early.

One of the key disputes we often see is around succession planning and how the increased value in farmland can create friction among family members. If succession planning is unclear or doesn’t fully account for all family members, even those not directly involved in the farming enterprise, the increased land values can intensify conflict when trying to create a fair future plan.

If you are experiencing friction over your land arrangements, the best approach is to tackle it early—before it escalates into a full breakdown of relationships. Mediation and other alternative dispute resolution methods are invaluable tools, helping families navigate these sensitive conversations and plan for the future constructively.