The price of agricultural land increased by more than €700 per hectare over the first three months of this year compared with the first three months of 2003.
Preliminary figures issued by the Central Statistics Office yesterday show the average price per hectare paid for land in January to March this year was €14,665, representing a 7.8 per cent increase on the same three months in 2003.
However, the CSO warned yesterday that the prices being paid for land had to be carefully set against the very limited amount of agricultural land which comes on the market each year.
Last year, for instance, agricultural land sales accounted for 0.2 per cent of the total of farmed land in the State.
The average land transaction size was nine hectares in the first quarter of the year, representing a decrease of 4.3 per cent over the fourth quarter of 2003.
The CSO said that its figures exclude sales outside the range of €500 per hectare to €35,000 per hectare on the basis that the purchaser may intend to use the land for non-agricultural purposes or such sales may be within families.
It excludes transactions in Dublin because of the uncertainty of the continuing use of the land for agricultural purposes. It also excludes transactions of under two hectares and identifiable forestry transactions as such land will not be used for agricultural purposes.
The average prices being paid for agricultural land has been increasing since 2000. The average price being paid in early 2000 was €11,429 per hectare.
In the first quarter of 2001 it rose to €12,649 and in the same period in 2002 it reached €14,202 per hectare. By the end of 2002 the price had dropped back to €13,026 but recovered to €13,601 by the first quarter of last year.
There are major regional variations. Land in the west and Border regions sometimes makes upwards of €2,000 per hectare less than in the mid-eastern region which has returned the highest prices since 2000.
There has been a steady increase in land prices over the last three years. However it is unclear what will happen to land values from the end of this year when the link between farm production and direct payments is broken when so-called "decoupling" is introduced.