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Sunday 24 June 2018

Why average land prices in Munster jumped 20pc in 2017

A 217ac residential farm near Borrisoleigh, Co Tipperary sold for €2.2m
A 217ac residential farm near Borrisoleigh, Co Tipperary sold for €2.2m
Jim O'Brien

Jim O'Brien

Land is not coming to the auction room in Munster in quantity but it is getting dearer, according to a Farming Independent land price survey.

Despite a drop of 1.2pc in the amount of land sold in the province in 2017, the amount of money made at auction increased by 18.5pc, while the average per acre price has jumped by 20pc to €11,417/ac.

A total of 30 auctions were recorded for Munster last year, with 1,630ac changing hands - netting a total of €18.61m.

Auctioneers and commentators agree that the dairy boom is really taking hold at this point and any land with dairy potential is being snapped up, much of it happening in off-market sales.

Like the other provinces, this was a year of two halves, where 61pc of the land was sold between July and December, with 89pc of the money generated in those latter six months.

Tipperary hosted most of the Munster auctions in 2017, with the premier auction rooms resounding to the rap of the gavel. Of the 30 successful auctions recorded for the year, 16 of them took place in Tipperary, where some record prices were paid.

The prize for highest per acre price goes to Co Clare, where a 17.25ac parcel of ground near Ennis made €390,000, or €22,608/ac, when sold by Sherry FitzGerald McMahon.

The biggest farm sold in the province was a 217ac residential farm at Borrisoleigh in Co Tipperary.

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In a sale handled by Vincent Ryan of Thos Ryan auctioneers, this extensive grass farm with an old Georgian house and lots of road frontage was bought at auction for €2.2m. It is to be the home-base for renowned showjumper Greg Broderick.

The farm to attract the largest amount of money was a 130ac, non-residential grass and tillage farm at Golden, also in Tipperary. Netting €2.23m, the farm raised eyebrows and raised the bar for farmland in the area. In the normal course of farmland sales, a farm this size, even with prime ground, would command a lower per acre price. However, the 130ac farm sold under the gavel of Alison De Vere Hunt of Cashel Marts, making €17,153/ac.

The two other farms breaking the €1m mark were also located in Tipperary. Ballybrenogue, a 104ac residential grass farm with extensive sheds and a disused milking system at Cullen on the Limerick/Tipp border, was bought for €1.25m, or €12,000/ac.

The farm was brought to auction by Matthew Ryan auctioneer, who also handled the sale of a 33ac farm at Kilpatrick, Dundrum that made €11,757/ac under the hammer.

The last €1m farm was a 65ac residential holding at Ballyslatten, Golden sold by Mark Donovan of Donovan auctioneers to an adjoining farmer for €1.02m, or €15,700/ac.

In Co Limerick, a 90ac non-residential farm with good outbuildings and facilities at Kiltallon near Croagh in Co Limerick sold under the gavel of GVM's Tom Crosse, making €965,000, or €10,700/ac. A parcel of 24ac of non-residential tillage ground at Farranlahassery, Cahir in Co Tipperary was sold by John FitzGerald of Dougan Fitzgerald, making €390,000, or €16,250/ac.

Tom Crosse of GVM Limerick regards the figures as reflective of his experience. "There is a greater confidence in farming, with dairy driving everything," he said. "I think the dairy boom has bedded down and towards the end of the year the reality dawned. Guys who were doubtful about buying land in the spring were gung-ho after the milk cheques came in. There is great confidence around." GVM chose to avoid the auction route for the last year or two, but they will be encouraging land owners to go to public auction next year.

Lending

"The banks are now looking at ability to pay rather than land values as a basis for lending to farmers. That will loosen up funds for land purchase," Mr Crosse said.

Nenagh-based auctioneer Eoin Dillon also credits the dairy sector with the buoyancy in the market. "Talking to agricultural contractors, they have had no problems collecting from dairy farmers this year. I had a case of a dairy farmer who was about to sell a piece of ground at an out-farm in order to buy a parcel adjoining him. He withdrew the out-farm piece from the market as he could afford to buy the adjoining parcel without selling."

Pat Quirke of PF Quirke says 2017 also saw the return of the business sector to the market, saying that from 2011 until recent times, there was no spare cash in business,

"Now you have the businessman or woman with roots in the land, who is making extra cash, seeking to buy the house and the few acres. We sold quite a number of these types of properties this year," he said.


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