News of the rapid increase in "land-only" values coincides with a confirmation from the NSW and federal governments that work had officially begun on the long-awaited bypass, with a start on fencing, building demolition and the relocation of utilities.

A joint state-federal statement on Thursday said work had started on fencing, demolition and the relocation of utilities, with more geotechnical investigations and surveys ahead.

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A tender to design and build the project should be signed by the middle of this year, after three firms - Acciona Constructions, Fulton Hogan and John Holland - were shortlisted in November.

As the Newcastle Herald reported in mid-December, Transport for NSW had already bought most of the property needed, but Singleton Council and a group of farmers were holding out for better offers. Some said they had rejected final offers from Transport, to find the Valuer General offering them less.

Putty Road market gardener Chris McNamara said three of Transport's four offers were less than half the amount ascribed by the valuer hired by the family.

"Then the VG became involved, and its final offer was 62 per cent of our independent valuation and 11 per cent less than Transport's highest!" Mr McNamara said.

He said Transport wrote in September to say it was taking the property by compulsory acquisition because a "timely agreement had not been reached".

"And now we find that while they are driving our valuations down on one hand, they are boosting them for rates purposes, on the other," Mr McNamara said.

According to the latest VG valuations for the year to July 1 last year, rural land in the Singleton, Muswellbrook, Upper Hunter, Dungog and Cessnock council areas rose by 72.2 per cent in 12 months.

This was driven by "increased demand for rural lifestyle properties with remote working options and proximity to city centres".

It said "good seasonal conditions and strong commodity prices have driven very strong increases in the region's primary production properties".

A VG report on Singleton showed the value of 3764 rural properties - which include coal mines - had risen from $2.78 billion in 2019 to $3.56 billion in 2021 and $7.2 billion in 2022.

The VG said Singleton rural land virtually doubled in value in the year to July 1, an increase of 97.8 per cent.

The overall Singleton increase was 92.6 per cent, or almost four times the statewide average of 24 per cent - a figure based on analysis of 67,000 property sales.

Maitland MP Jenny Aitchison said yesterday that the land acquisition system was "broken", and that Labor would "change the law to ensure negotiations are in good faith" from the start.

Asked about the difference between this week's big land value increases and the allegedly low Singleton offers, the VG said compulsory acquisition valuations were peer reviewed.

The process was "transparent" and unhappy landholders could take Transport to the Land and Environment Court.

Progress on the bypass project was outlined in a joint statement this week by federal Labor MPs and their Coalition state counterparts.

The statement said Canberra had committed $560 million to the bypass and the NSW government $140 million.

Major work was expected to start late this year with an opening to traffic three years later in late 2026, weather permitting.

NSW Regional Roads and Transport Minister Sam Farraway said the eight-kilometre project bypassed five sets of traffic lights and removed about 15,000 vehicles a day from the town centre.

Federal Hunter MP Dan Repacholi said more than 26,000 vehicles, including 3700 heavy vehicles, traversed Singleton every day.

Mr Repacholi said reducing traffic through Singleton would boost the town's economy and make travel safer.

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