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Land prices went up by 10pc in 2021, IPAV survey reveals

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IPAV CEO Pat Davit. Photo: Paul Sherwood

IPAV CEO Pat Davit. Photo: Paul Sherwood

IPAV's Phillip Farrell

IPAV's Phillip Farrell

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IPAV CEO Pat Davit. Photo: Paul Sherwood

Average land prices increased by 10pc in 2021, with top-quality ground up 20pc, according to the annual farmland report of the Institute of Professional Auctioneers and Valuers (IPAV), writes Jim O’Brien.

The report singles out dairy as the strongest agricultural driver of sales and prices. This is followed by the Covid-driven search for rural properties by prospective home-workers.

The return of investors to the land market seeking a profitable home for their money had a key impact on sales and prices. In the face of bank deposit charges, land made a safe and more lucrative alternative.

“Exiles returning home, the purchase of land by other business owners and the ability to work from home are all factors increasing competition for the scarce resource that is land, with a lack of supply for both purchase and rental,” says IPAV CEO Pat Davitt.

Overall the report describes 2021 as a good year for most farming sectors.

In his introduction Phillip Farrell notes: “The largest sectors — dairy, beef and tillage — have ended up in very positive territory, having experienced significant price increases in 2021.

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IPAV's Phillip Farrell

IPAV's Phillip Farrell

IPAV's Phillip Farrell

“However, some niche sectors, like poultry and pigs, experienced real challenges.

“The sheep sector had its best year since 2005.”

Reflecting on contributions from IPAV members across the country, Mr Farrell predicts challenges in the form of rising input costs, as well as the new CAP conditions.

“Farmers are very conscious of the implications of CAP 2023,” he writes. “Herd sizes, carbon credits, emissions, the forthcoming nitrate review and climate change are all key issues.”

Auctioneers interviewed across the regions reported a wide variation in the per-acre price paid for land, with €6,000/ac paid in the west to €16,500/ac in South Tipperary.

One of the revelations of the report was the strength in prices paid for forestry land.

Up to €6,500/ac was paid in West Cork, with an average of €5,500/ac paid for good forestry ground around the country.

These prices are expected to remain solid, and the report expects demand for planting land to increase as the government’s ‘Project Woodland’ appears to be making progress in freeing up blockages in the sector.

It notes that 4,000 felling licences were issued in 2021.

The report anticipates the supply of land will continue to be an issue, especially in the rental sector where much ground is tied up in long-term leases.

It concludes that while the 2022 land market will be impacted by inflation in fuel, feed and fertiliser prices, it expects the fundamentals in the agricultural sector to remain healthy, with another positive year likely.

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