AGRICULTURAL LAND:Land prices may have crashed in recent years, but there is still a farmer-led demand for good land
FARMERS HAVE always said “land will always hold its value because God is not making any more of it”. True, but the fact is the value of land fell in the first half of this year to €9,500 from last year’s average price of €10,200.
That being said, there is still a strong demand for land, especially good land, as farmers are looking at having dramatically to increase output when the Common Agricultural Policy (Cap) is reformed and milk quotas end, in 2015.
A new confidence has crept into the farm sales market as a result of this and the recent publication of the Harvest 2020report, which is the Government programme to drive this expansion.
Edward Townsend, at estate agents Colliers, reckons land prices have fallen by 60 per cent since the boom years and no longer do you find solicitors, developers and speculators at farm sales.
“Despite that, there is still a demand for good land, but the market is now farmer-led and this year, for the first time in many, dairy farmers have had a good year and they are coming back into the picture,” he said.
He said tillage farmers were also prepared to buy land and there was activity in the market though not at nearly the same level as in previous years.
He said the company recently put an 80-acre farm near a Munster town up for sale with an asking price of €1 million. Although it sold later, after the auction, it did not reach the asking price. “I am still confident there is a demand for land and there is no doubt the larger farms will be snapped up – there is no bother selling them at all,” he said.
The Irish Farmers Journalreporter Shirley Busteed, who has been carefully monitoring farm sales in Ireland for a number of years, said several trends were emerging in the farm sales area.
Her research showed the average price of land in the State in 2010 was €10,200 over the year but her survey of land sales in the first six months of this year found prices had fallen to an average of €9,500.
“There were almost 19,300 acres offered for sale during the first half of this year and that is back 14.2 per cent on last year and just half of the volume of three years ago,” she said.
She said the main feature of sales since the recession is they have gone “local” and where there are adjoining working farms, land has been making reasonable money.
On the other hand, when farms go for sale where the neighbours are part-timers and have lost their off-farm income, land is harder to sell and much depends on its quality.
Busteed is also convinced there is “still some money around” in farming circles from the compulsory acquisition of farmland for road building and that this could be seen in recent sales in the Carlow/Kilkenny/Waterford area and in Co Meath.
Busteed’s research has shown the least amount of land offered for sale this year was in Co Sligo and the most was in Co Galway.
Both she and Edward Townsend agree it is much easier to sell larger farms and they gave as an example the recent sale of 110 acres at Kilsallaghan, between Ashbourne and Swords, which went for €1.4 million.
This is another trend in the market – in recent times more farms over 100 acres are coming up for sale.
Recent examples have been a 135-acre residential dairy farm near Lissarda, Co Cork, a 147-acre residential farm at Clonshaugh, Co Dublin, and a 127-acre residential holding at Athy, Co Kildare.
Busteed found that in the first six months of this year, 420 farms or land parcels were offered for sale – a decrease of 15 per cent from 498 farms in the same period in 2009.
Auctioneers who handle land sales say the reform of the Common Agricultural Policy (Cap), which will mean the ending of milk quotas in 2015, is bound to impact on the value of farms but as of now having quota with land is seen to be a valuable asset.
The most recent land sale recorded was a 11.5-acre parcel of tillage land in Co Wexford.
The property, just six miles from Enniscorthy, was sold for €10,500 per acre by auctioneer Michael Keogh of Wexford Farmers Co-operative, a total of €121,000.
