Farmland is still a safe haven for investors despite current slump in sales
Published 24/08/2016 | 02:30
'How much is land making around here", is a question many Irish people ask when they travel to another part of the country. But of course, the unique selling habits of Irish farmers actually make it very difficult to interpret very much at all about the underlying value of land in a particular county or region.
Irish land doesn't change hands too often. And when it does, an individual farmer who really wants a particular property, might be willing to pay a price well above the underlying economic value.
Headline figures show how land prices nationally have been falling. They dropped by around 9.9pc on average last year to €8,914 per acre. It was the sixth year in a row that the national average failed to break the €10,000 per acre level.
These falls might convince some people that farm land is a "buy" right now, especially when you consider that it was making in the region of €20,000 per acre back in 2007.
But just like buying a house in Ireland today, forget about what it was valued at in 2007 because it was probably never really worth that at all.
The value of something at a moment in time is what somebody is willing to pay for it. The long term economic value is something entirely different. And the wider figures would suggest that land prices in Ireland may well have further to fall.
If you look at the Revenue Commissioners' figures for farm income in 2014, filed this time last year, an interesting pattern emerges.
Bearing in mind that the figures do not take account of what type of farming it involves, average incomes in Waterford were the highest in the country at €38,115 that year.