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Thursday 24 May 2018

Land prices soar by 32pc as investors return to market

Michael J Donegan, from Causeway, Co Kerry, gets ready for the Ploughing Championships in Screggan. Photo: Justin Farrelly
Michael J Donegan, from Causeway, Co Kerry, gets ready for the Ploughing Championships in Screggan. Photo: Justin Farrelly
Jim O'Brien

Jim O'Brien

Prices being paid at auction for farmland have increased dramatically but the amount of land being sold continues to decline.

There are now indications that property investors and developers are making a return to the market, with significant prices being paid for ground with development potential on the outskirts of urban areas.

A Farming Independent survey of land auctions in the first six months of 2017 found the amount of land sold at auction nationally between January and June 2017 was down 5pc on the same time last year. However, prices jumped by 32pc from €8,445 per acre in the first half of 2016 to €11,123 per acre in the same period this year.

Prices in South Leinster rose 17pc to €12,560, making it the most expensive region in the country. At 27pc, Munster saw the biggest decrease in land coming to auction. Even though the amount of land sold in early 2017 was down 5pc on the same period in 2016, total sales generated 25pc more in terms of hard cash.

While €27.9m changed hands in the auction rooms in the first half of 2016, this compares to almost €35m spent on a smaller volume of sales in the same period this year.

This is against the backdrop of a 50pc fall in the amount of land sold under the hammer in the first six months of 2016 compared to the same period in 2015. The 2015 figures had been boosted by dairy expansion following the abolition of EU milk quotas.

John Hayes, from Fenor, Co Waterford, puts the finishing touches with a chainsaw to the world’s biggest Viking sword, carved from wood. Photo: Justin Farrelly

The most expensive parcel of farmland sold at auction was a 10.44-acre piece of tillage land that made €620,000 at Ramstown Lower on the outskirts of Gorey, in Wexford. In a sign that the non-farming sector is back in the land market, it was bought by a local businessman who paid €59,386 per acre for it.

But the number of acres sold nationally in the auction rooms from January to June this year is down on the corresponding period last year, going from 3,303 acres to 3,145 acres.

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Commenting on the figures, Wexford auctioneer David Quinn said "at present, there isn't as much as an acre of land for sale" in his area. Veteran Kildare auctioneer Willie Coonan agreed, adding: "We have far more customers than we have land for." Clonakilty auctioneer John Hodnett said prices paid in the private treaty market also indicate a substantial increase in the per-acre price. He listed a range of sales closed in recent months that saw farms in West Cork make between €12,000 and €19,000 per acre.

Tralee-based consultant Eddie McQuinn believes the amount of landowners opting to lease land is taking a lot of potential land for sale out of the market.

"Leasing is satisfying the needs of those who need land at the moment but long term it is leading to scarcity and higher prices," he said.

Kilkenny auctioneer Joe Coogan said a lot of land earmarked for sale was going the leasing route. He added that it was a very hard market to read at the moment.

See the Farming Independent for full results and regional analysis of land prices


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