The fall in country land values has been dramatic, writes JACK FAGAN

THE INTERMINABLE debate over the fall in property prices invariably focuses on the collapse in the Dublin housing market. The depth and range of that slump is frequently seen as the quintessence of everything that has gone wrong with our economy.

Few have noticed that the same holds true for rural Ireland and, in particular, our rolling farmland and grand country houses. These have fallen in value by at least as much as properties in cities and towns and, in most instances, are even more unsaleable than urban dwellings because of the banking crisis.

Though there have been relatively few significant sales of country estates over the past year, the recent auction of the 550-acre Castle Annaghs estate on the River Barrow in south Co Kilkenny shed considerable light on the top end of the market. Originally valued at €16 million, the prestigious estate made nothing like that kind of money, selling at auction for a mere €6.075 million – the equivalent of about €11,000 per acre.

Castle Annaghs did not catch the attention of the fast-dwindling stock of gentry still lucky enough to have a few quid in an offshore bank. It did, however, attract envious interest from a small group of tillage and dairy farmers and, after a desultory opening bid of €3 million, the prized estate was knocked down to one of the milkmen for what has to be a bargain price.

Even on a much smaller scale, the demand for country houses with their own lands has fallen away because of the chaotic business climate and the banking debacle. Meath expert Raymond Potterton says there is “no huge interest in traditional country houses at the moment”. Buyers with an aspiration for country-style living usually made a lot of money in business first or cashed in on the sale of valuable homes in places like Castleknock.

Neither of these avenues are open to business people at the moment and, even though land prices have fallen from €20,000 to €25,000 to around €12,000 an acre, it is now difficult to shift it, says Potterton. The changed environment has also ended a buying frenzy by “hobby farmers” who frequently bought up to 50 acres within easy commuting distance of Dublin for horsebreeding. Once the stable block was in place, the planners of Meath and Kildare, in particular, were only too happy to clear the way for these so called “breeders” to build vulgar, oversized, suburban-style houses to impress relations and irritate neighbours.

Newbridge country agent Paddy Jordan says he has a number of farms on his books but will not be offering them for sale on the open market because the vendors were unwilling to accept the present deflated land values of €10,000 to €15,000 per acre. There were, however, a certain number of buyers in the market for farms of over 200 acres in Leinster only suitable for tillage and grazing. “Having a big house on it can be more a hindrance than a benefit as it often needs a lot of money spent on it.”

Many of the farmers looking to buy now are understood to be holding considerable quantities of cash after selling land under compulsory purchase orders to facilitate the construction of new motorways. Pat O’Hagan of Savills estimates that the value of country estates are now back to 2002 levels – down by 30 to 50 per cent – and says that, while they may drop a bit more, they are now becoming “quite affordable”.

Hugh Hamilton, the doyenne of country estate agents who quit at the top just 10 years ago, is in no doubt about the prudence of those who bought some of the great Irish estates over the years. He sold the 1,671-acre Abbey Leix estate in 1994 for a mere £3 million. He also sold both Straffan House and Humewood a number of times. Hamilton’s last big sale was the Guinness-owned 78-acre Farmleigh estate in the Phoenix Park bought by the State in 1999 for £23 million.

If the exchequer finances deteriorate any further, they may bring Hugh Hamilton out of retirement to flog it yet again. Now, wouldn’t Derek Quinlan be in his element living next to the president and the American ambassador. On second thoughts, he’d never move northside.