Farm Ireland
Independent.ie

Wednesday 26 April 2017

Land prices tumble in west and north

Stephen Kavanagh and Tom McDonald of SCSI at the launch of the Land Market Review with Teagasc’s Trevor Donnellan, Kevin Hanrahan, and Prof Gerry Boyle
Stephen Kavanagh and Tom McDonald of SCSI at the launch of the Land Market Review with Teagasc’s Trevor Donnellan, Kevin Hanrahan, and Prof Gerry Boyle
Darragh McCullough

Darragh McCullough

The gap between land values in the west and north and the rest of the country is widening.

While prices held steady in Leinster and Munster last year, a major survey has found that averages in Connacht/Ulster fell by as much as 19pc.

The biggest winners among landowners outside Dublin last year were those that let out land in the Munster area, where conacre prices saw a double-digit lift of 12pc.

The report by the Society of Chartered Surveyors of Ireland and Teagasc highlights the impact that the expansion in dairying has had on land values in 2014.

Holdings of less than 50ac in Munster was the only land category that increased in value outside Dublin, with a 4pc increase to €9,435/ac.

Dublin land values got the biggest lift, with a 26pc increase in prices, but farms in the rest of Leinster sold at levels almost identical to 2013's average of €9,500-10,000/ac.

Connacht was the biggest loser, with farmland prices down by anywhere from 3-19pc.

Land blocks of 50-100ac were the biggest loser, with values falling from €7,750/ac to €6,260/ac.

"Combining the results of this year's survey with those of earlier years, reveals a growing divergence in land values in the south and east of the country in comparison with the north and west," concluded the report. The authors of the report also note that Irish land sales prices are expensive compared to the rest of Europe, despite remaining well below their 2007 peak.

Munster is also by far the most expensive region to rent land, with conacre prices of €194/ac for grazing land - a full 30pc higher than the average for the rest of the country.

Rental rates are also rising fastest in the south, with a 12pc increase in 2014, compared to a 3pc in Leinster and a 5pc decrease in Connacht/Ulster.

Within the conacre market, ground for root crops, maize and pulses commands the most, with rates of €204, €230, and €130 in Leinster, Munster and Connacht/Ulster, respectively.

However, the reliance of expanding farmers on rented rather than purchased land is only set to increase, according to the report.

While survey respondents reported no change in the volume of conacre, almost half noted an increase in the volume of land let via longterm leases.

"The current Basic Payment Scheme acts as a further disincentive for landowners to sell land, since the supports are tied into to land ownership for the next seven years," said Teagasc economist, Trevor Donnellan.

"For the next few years we'll be ok, but at some point the expansion plans are going to hit a wall where farmers can't expand within their own farms, and there won't be land available locally to buy," he said.

Indo Farming