Farm sales are getting fewer, and the median price for Australian farmland continues to rise - as much as 17 per cent in South Australia last year. In total, almost $9 billion in agricultural property changed hands nationally in 2018 according to detailed Rural Bank research into farmland values. Bullish median farm sale prices in SA, Queensland (up 15.7pc) and Victorian (up 14.1pc) were well above national price growth of 10.7pc. Despite drought raging across much of NSW and Queensland, and testing seasonal conditions in many other parts of the country, last year's national per hectare result was also the fifth annual rise in a row. It translated into a 20-year national average price growth rate of almost seven per cent. Demand was strongest for mid-sized cropping and grazing properties, while corporate-sized aggregations and smaller farms tended to experience less pricing tension. NSW and Western Australia prices lagged behind the national trend, but were still well into positive territory at 9.6pc and 3.8pc respectively. Only Tasmania experienced a dip in its median per hectare price - down five per cent compared to 2017. "Overall, the figures show remarkable strength and confidence in agriculture's future, with all states experiencing growth of 5pc to 7.5 per cent since 1998," said Rural Bank chief executive officer, Alexandra Gartmann. "Farmland values have comfortably outgrown the consumer price index, which is good news for Australian landowners." The upbeat price and demand trends revealed by Rural Bank's annual Australian Farmland Values report have coincided with more robust results on corporate farming returns highlighted by another market barometer, the Australian Farmland Index. Despite seasonal setbacks, the index registered 16.1pc annualised return growth for the year to March 31. The AFI tracks production earnings and asset valuations across a portfolio of 48 horticulture, grain cropping and livestock holdings worth about $1.1b, including assets managed by Rural Funds Management, Laguna Bay Pastoral and Gunn Agri Partners. RELATED READING: Although the index actually fell to a 2.54pc return for the March quarter as drought forced up water and stockfeed costs and cut crop yields, the overall rolling average return grew from 13.8pc in the year to December 31. Index co-ordinator, Frank Delahunty, noted since its inception in 2015 the portfolio had enjoyed a total return of almost 14pc. Latest results were helped significantly by permanent horticulture farming investments, such as citrus and nuts, showing strength in the "below average rainfall period". "Annual cropping and livestock investments have been impacted by the season, but are still showing good performance, especially compared to other asset classes," he said. However, limited east coast soil moisture had presented concerns about current cropping season prospects and dented investors' land acquisition sentiment. Coincidentally, the number of agricultural properties sold across Australia last year slipped 9.5pc on 2017 figures, to 8250, according to Rural Bank. Its farmland values report recorded a total 8.7 million hectares sold, valued at $8.99b. Transaction numbers have actually been shrinking since 2007 when 11,775 properties changed hands. NSW, SA and Tasmania recorded last year's biggest transaction volume decline - down 18pc, 12.6pc and 11.7pc respectively. Ms Gartmann believed the long-term trend of fewer transactions showed, regardless of drought, agricultural land was becoming much more tightly held. "In line with this we expect values to keep rising due to tighter supplies of available farmland and increased competition for fewer parcels," she said. "This is undoubtedly good news for farmland owners, but it has profound implications for those looking to get into the market, either via succession or new entrants to the sector." She noted how farmland ownership really mattered to a farmer's overall business, and to agribusiness investors. "It secures most of our farm debt, underpins a large proportion of farm business balance sheets, it is a critical asset that enables farm production and provides an equity base for further growth." Rural land had also proven its investment worth, with Australia's average annual price growth rate running at 6.8pc since 1998. Buyers were now looking beyond seasonal and commodity cycles and investing accordingly, pushing up land prices, particularly for holdings with access to reliable rainfall and water. Reflecting that trend Rural Bank's eastern Australia sales head, Jonathon Hewitt, said Victoria's rural property market last year was powered by demand for south western property, particularly from northern buyers wanting quality grazing land. Other regions experienced less activity, particularly the dry North West. Similarly in Queensland, "there were fewer sales at the low end of the market, which could have been influenced by drought in marginal areas". Drought crimped NSW transaction numbers, but demand was high for quality farmland in every region, resulting in more high value sales. Western sales head, James Robinson, said SA's Yorke Peninsula achieved a 91pc lift in median price, but the state's top national ranking for per hectare values was due largely to strong south eastern price gains. Good seasons and buoyant livestock prices enabled producers to compete hard for attractive land. In WA, where transactions lifted 9.1pc, median price rises of up to 30pc occurred in traditionally higher rainfall areas following several strong seasons, notably at Ongerup, Broomehill and Victoria Plains. Tasmanian prices were down as fewer mainland buyers were bidding, but agents made 9.7pc more sales, particularly mid-sized cropping and grazing properties.