Viewpoint: Cash buyers are exiting the land sales market
Published 08/04/2015 | 02:30
Strong prices have continued to be a feature of this spring's land sales, as the positive tone to the farming sector is reflected in the country's auction rooms.
But while land prices have continued to improve over the last three years, they have generally held at levels which represent value for most interested parties.
Unfortunately, the same cannot be said for the land letting market, but that's another story.
However, one noticeable feature of the land market of late is the extent to which cash sales have dried up. Credit institutions are back supporting a significant proportion of farm purchases.
It is commonly believed that since the re-emergence of farmers as the main buyers in the land market much of the money for purchases came from cash resources accumulated from the sale of development land and from the proceeds of CPOs associated with motorway developments.
It appears much of that money has now been spent and some auctioneers point to the difficulty of closing out auctions as symptomatic of a decline in cash reserves.
"You now need a lead-in time of eight to 10 weeks before an auction to give potential customers the time to gather the resources," according to Eamonn O'Brien of CCM Marts in Cork.
"I had a situation recently where a potential customer got clearance from his bank literally two hours before an auction."