Land sales slump by over 60pc on back of beef crisis and Brexit uncertainty

Brexit and the beef crisis have undermined vendor and buyer confidence, say auctioneers

Best seller: Prumplestown House on 298ac in Co Kildare was the largest farm to sell in the first six months of 2019, making €4.87m at auction
Best seller: Prumplestown House on 298ac in Co Kildare was the largest farm to sell in the first six months of 2019, making €4.87m at auction
Kerry sale: A 110ac non-residential farm at Whitefields, Beaufort, near Killarney sold at auction for €1.925m last May
Jim O'Brien

Jim O'Brien

A review of the public auction scene for the first six months of the year makes for some grim reading.

Brexit and the beef crisis are battering land sales while the closer one is to the border and the more dependent a region is on beef the more severe the impact.

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The amount of land sold successfully at auction in North Leinster is down over 70pc on the same period last year with the amount of money generated at the gavel down over 60pc.

Connacht/Ulster saw a decline of almost 65pc in the amount of land successfully sold in the public arena while the amount of money generated went down by over 60pc.

It is quite a different story further south where Munster's dairy country saw the amount of land disposed of under the hammer increase by 21pc and the average per acre price go up by 8pc to €14,012/ac. The amount of money changing hands after auction increased by 31pc.

The sunny south east of Leinster also saw decreases across the board but not quite as drastic as those experienced by their northern neighbours.

There was a decrease of 8pc in the amount of land sold in South Leinster with a decrease of 13pc in the amount of money gathered and a drop of over 5pc in the price per acre

Between January and the end of June 2019 the number of successful land auctions held nationally declined by 50pc on the same figures for the same period last year.

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The amount of land sold declined by 27pc and the amount of money generated by auction sales went down by 18pc on the same period last year. The change in the national average price per acre decreased by a marginal 0.52pc down from €13,665/ac in the first six months of 2018 to €13,594/ac in the first six months of 2019. However, Munster saw an 8pc increase in the amount paid for an acre of land with an average of €14,012/ac paid at successful auctions. South Leinster saw a drop of 5.5pc but the region still has the most expensive farmland in the country at €14,209ac, marginally above Munster prices.

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Munster bucks national trend with sales up 21pc this year It's very quiet on the western front

It's very quiet on the western front

The 70ac farm near Ballynoe in east Cork was sold for €655,000
The 70ac farm near Ballynoe in east Cork was sold for €655,000

It's very quiet on the western front

Volume

While North Leinster's fortunes declined drastically in relation to volume the average price paid for an acre of ground in the first six months of the year stands at €12,412/ac an increase of almost 33pc on last year.

In Connacht Ulster the price per acre increased by 10pc to €7,619/ac but these figures are based on a very limited number of sales. The auction rooms have been distinctly quieter throughout the spring and early summer of 2019 with total of 30 successful auctions reported on in the national papers compared to 60 in the same period of 2019. A significant majority of these, a total of 21, took place in south Leinster and Munster.

Kilsheelin, Co Tipperary sold at auction for €1.83m
Kilsheelin, Co Tipperary sold at auction for €1.83m

It is also notable that while in Munster and South Leinster the number of auctions declined considerably the average size of holding sold in both regions increased by about 40pc. The average size of farm sold in Munster in early 2019 was 73.5ac while early last year the average size stood at 43ac.

In South Leinster the average size of holding sold at auction in the first six months of 2019 stood at 74ac, last year the average size selling under the hammer is 46ac. Uncertainty, caution and Brexit are the three words most prominent on the lips of auctioneers when discussing the current land market.

Trim auctioneer Thomas Potterton has certainly experienced caution on the part of buyers and sellers,

"It's nothing like it used to be," he said, "we've had a very good run of weather in the spring and summer. The land is looking great and it looks like there will be a good harvest with strong yields. However, aside from dairying, the situation in the other sectors is very worrying.

Grain prices don't appear to be lifting. It's a struggle to get cattle killed.

"Stores seem to be doing ok and sheep to a certain extent but if there is a hard Brexit it will be disastrous, particularly for beef."

On an optimistic note Mr Potterton said that any land he is selling is getting good prices and encourages prospective vendors to have confidence, "if they take the plunge it will pay off," he said.

Roscommon auctioneer Ivan Connaughton believes there is a real problem with the banks, "Yes they are lending but the most you will get is 70pc.

"If a young farmer is buying 30ac for €210,000 he is expected to have over €60,000 in cash. Very few younger people have that kind of cash.

Location

"Also, location is everything in farmland sales, you generally get one chance to buy the plot near you and it can be very difficult to have the money ready when it comes up."

In South Leinster Willie Coonan noticed the prevalence of bigger places on the market but even though good prices were achieved the market was not busy,

"I wouldn't describe it as a wild start to the year," he said, "the 30 to 50ac farm wasn't very much in evidence."

Matthew Ryan of Tipperary town says that while Brexit is being blamed for all the caution he believes the deeper crisis is in the beef industry and this is having a key impact on land sales and on the whole sector.

"The consumer is opting for white meat, we are up against a cultural change and while we are looking at Brexit the problem could lie elsewhere," he said.

Staying in the south Michael Barry of Fermoy agrees with the findings of the survey in relation to Munster , "Anything we had we sold," he said, "the only game in town is dairying with a certain amount of equine interest, the demand is there."

Tom Crosse of GVM Limerick agrees saying that most of the farm properties his firm has on the books is selling. However, he has noticed that dairy farmers are no longer borrowing for land but are investing heavily in dairy technology and infrastructure.

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