The first valuation report by the Australian Property Institute (API) reveals that farmland has experienced the most significant value growth over the past 20 years, surpassing all other property types.

The value of agricultural land has jumped by 256 per cent since 2005, compared with 154 per cent for housing during the period.

Meanwhile, industrial properties like warehouses and factories have seen their values rise by 164 percent, and commercial properties, including retail and office spaces, have increased by 143 percent.

The big gain for farmland was powered by high commodity prices, favourable weather conditions and, until recently, low interest rates.

The report found the biggest hike was in Victoria’s Wimmera region, where land values have bounded by 802 per cent, driven by rising demand for renewable energy.

Grain and sheep farms have historically been the backbone of the area’s economy.

API chief executive Amelia Hodge said farmland bettering capital city property values was a shock for some people.

But she also warned the push for renewable energy put pressure on land in rural areas.

”Our economy is being transformed by the structural shift from fossil fuels to renewables, which will benefit the planet, but in some areas threatens the ongoing viability of scarce agricultural land, to be replaced by vast new solar energy farms.”