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Sunday 24 June 2018

'Land prices are on the floor in Connacht - only forestry securing the foundations'

Adam Kerrigan on water-logged land at the family farm in Ballintra, Co Donegal last year. Photo: Philip Mulligan
Adam Kerrigan on water-logged land at the family farm in Ballintra, Co Donegal last year. Photo: Philip Mulligan
Jim O'Brien

Jim O'Brien

Despite Connacht-Ulster seeing the most lucrative farm sale of the year at public auction with the sale of a beautiful 135ac farm at Renville near Oranmore prices are generally under pressure.

The day I walked the place I thought to myself that a Galway man or woman will buy this, it's a piece of the county anyone would love to own.

And so it came to pass, at auction a few days later it was bought by Pat McDonagh, founder of the Supermac's fast food chain and quintessential Galwayman. He paid €3.2m for the property or €23,700/ac, a substantial per acre price for a farm of this size.

This sale has somewhat skewed the results from Connacht and Ulster, lifting the per acre average price by 25pc compared to last year.

While the decline of 28pc in the volume of land sold at auction in the region mirrored the rest of the country, the amount spent at auction was down a mere 3.5pc.

'Real prices'

An auctioneer in the region who wished to remain anonymous maintained that land prices in the west were generally far below our survey results and added that auction room prices did not reflect the real prices being paid in most transactions.

"Land prices are on the floor here," he said, "there are very few people locally with the money or the interest to buy land in the west."

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John Earley, however, disagreed and said that from September business has been good.

"We got about 40 farms away," he said. "Of course Brexit and the weakening of sterling didn't help given that we have a lot of UK customers.

"But what I'm finding is that there are customers for good land and planting land but the middle of the road stuff is hard to sell - land that's poor farming ground but not poor enough to plant."

He added that the price of planting land is around €5,000/ac: "It has become the foundation of the market for us," he said.

Mayo auctioneer Karl Fox said 2016 was a tough year with a combination of poor commodity prices, Brexit and a tightening by the banks resulting in less money being available for land purchase,

"Smaller plots are still selling, many being bought for small development projects but the bigger blocks are harder to sell and these are generally being bought by people coming from outside the region," he said.

Land sale highlights Connacht-Ulster

As they say, 'the facts is the facts and the figures is the figures' and the Renville farm was sold under the hammer in Connacht-Ulster in 2016.

However, if we take the Oranmore farm out of the equation then the average per acre price in the region falls to €6,327, or 3pc below last year's average. Meanwhile, the amount of money taken in auction sales is down almost 40pc.

The other headline sales in the region included a 17ac non-residential grass farm at Ballybay in Co Monaghan that was sold by Philip Ward for €290,000 or €17,000/ac. Similarly, an 8.25ac residential parcel at Curry in Co Sligo made €131,000. The house was valued at just €25,000 giving a per-acre price for the land of €12,848.

The biggest farm sold in the region was 180ac grazing and forestry holding at Craggagh, Balla in Co Mayo. In a transaction conducted by Morans of Castlebar the farm sold at auction for €750,000 making €4,000/ac.

In December John Earley of Roscommon sold four farms at auction with a 42ac holding at Ballyhaunis, Co Mayo making €350,000, a 21ac farm at Kilrooskey, Roscommon making €91,000, a 52ac property at Mullymux, Roscommon made €435,000 and 14ac at Fourmilehouse made €64,000.

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