Credit gap stalls sales
Published 05/01/2010 | 05:00
The agricultural property market will remain stalled throughout this year unless credit availability improves, auctioneers have warned.
Lack of credit has stifled the number of farm sales in the past 12 months and will con-tinue to do so until lending improves, they have predicted.
"Financial institutions are a vital cog in the whole wheel and unless the banks wake up, the whole system will stop," warned auctioneer Paul Murtagh from Murtagh Bros Real Estate Alliance in Mullingar. "This year will be more of the same."
Meath-based auctioneer Thomas Potterton insisted that banks were not lending, despite their claims to the contrary.
"If you can borrow 30-40pc of the purchase price of a property now, you are doing well," he said. "If the banks open up their doors at all, the market could get going again, but there is very little lending going on."
There appears to be consensus among auctioneers that land prices bottomed out last year. Tom Crosse, from GVM Limerick, said prices had fallen from an average of €12,000-€14,000/ac in early 2009 to around €10,000/ac by mid-year.
However, the majority of sales in late 2009 were closed at prices of between €7,000/ac and €8,000/ac. "It's closer to the economic value of land and probably the natural value of land at that level," he said.