Experts jump the gun with 'undervalued' property call
Irish farm prices still high compared with other EU countries
Published 15/06/2010 | 05:00
I was told many years ago not to write about the price of farmland. The reason I was given was that it is a topic so dear to Irish farmers' hearts that any attempt to add a bit of realism to the subject or talk down prices would not be popular.
As usual, I ignored the advice then and am doing so again, prompted by a recent report by the influential Standard & Poor's rating agency on property prices in Europe.
About four years ago I was criticised for suggesting in this column that farmers should consider selling some farmland or buildings and thereby eliminate borrowings.
Farmland in Meath and Kildare was freely making between €20,000 and €30,000 an acre for smaller parcels, and the prospect of netting say €250,000 for 10 acres of maybe an outlying holding seemed too good an opportunity to miss.
Time has proved that me correct, but there is nothing to be gained from moaning about lost opportunities. What happens tomorrow and on into the future is all that counts.
So what have we learnt from the past? Well, we are all now experts on asset bubbles and have learnt to our cost that the higher an asset rises beyond its true value, the further it then falls. Standard & Poor's are suggesting that property in Ireland could now be undervalued and that the price reductions may have been overdone.
Good for them. I wonder, though, why they think this when our prices are still ahead of those in other European countries.
Leaving aside the previously popular places for buying houses and apartments such as Croatia or Spain, let us look at more familiar economies such as France and our close neighbour, Britain. Farm properties in France are selling for a fraction of what they currently fetch here and good farms can be still be bought in Britain for less than in Ireland.