Southeast sees land prices fall 4.6% last year as Connacht bucks the trend
The auction rooms of the country were quieter places this year with a sharp decline of 28pc in the volume of land sold under the hammer compared to 2015 and a similar decline in the total revenue generated by these sales.
A survey of 162 auctions held in the course of 2016 shows that while the average price per acre paid for ground in the public arena fell by a marginal 1.6pc the real story is in the volume.
Uncertainty is the word on everyone's lips when it comes to explaining the drop in sales volumes. Commentators attribute the decline to the uncertainty in the dairy industry in particular, the uncertainty caused by Brexit, and a reluctance on the part of banks to loan money for land purchase. Many auctioneers also point to the increase in the numbers of long-term letting arrangements that appear to have eaten into the sales figures as land owners opt for letting because of favourable tax breaks.
There are many regional variations in the figures and while Connacht/Ulster appears to buck every trend, the figures in the west and north west have been skewed by the headline sale of 2016 when a beautiful 135ac farm near Oranmore in Co Galway was bought at auction by Supermac himself, Pat McDonagh for €3.2m or €23,700/ac.
The sunny southeast suffered the most dramatic declines. The counties of South Leinster saw a drop of 4.6pc in the average price per acre, with a decline of 35pc in the volume of land sold publicly, and a massive drop of 40pc in the amount of money generated by land sold at auction.
However, land in the region still commands a premium price, and at €11,528/ac beat the national average by 13pc.
Munster, which saw a massive 25pc drop in average price of land sold in the province between 2014 and 2015, showed a modest recovery in 2016 with the price increasing to €9,512 /ac or 5pc up on 2015 figure. However the volume of land sold at auction in Munster declined by 28pc, in line with the national trend.
The average per acre price for land suffered its biggest drop in North Leinster where it fell by 8.5pc compared to last year. In 2015 the average price per acre in this part of the country was €10,098 while last year it dropped to €9,238/ac. The volume of land sold declined by 21pc, while the amount of money generated in the auction room declined by 28pc.