![Australian farmland among world's best Australian farmland among world's best](/images/transform/v1/crop/frm/silverstone-agfeed/2067035.jpg/r0_0_1024_683_w1200_h678_fmax.jpg)
THE values of farmland worldwide have increased by an average of 20 per cent per year since 2002 with Australia not far off the pace, according to a new report.
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The Global Farmland Index, created by Savills research in London, documented the extraordinary annual growth with the best results coming from the emerging markets where major improvements in infrastructure fuelled farm productivity.
Australian farmland recorded annualised growth over that time of about 15pc, behind New Zealand at about 17pc. The two countries were the best of the advanced economies.
Savills director of international land markets and author of the report, Hugh Coghill, said the regulatory environment for foreign investment of farmland was a major determinant in the demand for such property.
"The knowledge and understanding of the restrictions and policy on foreign ownership is crucial," Mr Coghill said. "For example, a new law recently introduced in Uruguay bans sovereign wealth funds but private investors will not be affected."
He said eastern European countries had experienced considerable change in their land market policy and had also seen very high rates of growth.
The highest rates were recorded in the emerging markets of Romania at 40pc, Hungary at 25pc and Brazil also at 25pc.
Savills forecasts Brazil and Romania to outperform the index at 40pc annualised average growth.
Savills head of research Ian Bailey said those countries with more flexible foreign ownership regulation were likely to see increased growth above and beyond other real estate sectors.
"With the exception of markets with regulatory constraints, farmland in general has significantly outperformed residential and commercial assets. That is a trend which we forecast will continue for the short to medium term," Mr Bailey said.