Farm Ireland

Sunday 18 February 2018

Land prices close to bottoming out

Auctioneers say prices have stabilised and market has settled

Majella O'Sullivan

Majella O'Sullivan

The land market showed signs of bottoming out in 2009, the findings of the annual Farming Independent land price survey suggest.

The average price per acre paid for agricultural land in 2009 was €8,880/ac, the survey reveals. The figure for 2008 was just over €10,500/ac.

However, the total figure for the year was dragged down by the inclusion of the sale of a 1,540ac farm in Co Clare in November, which sold at auction for €1,157,000 or €751/ac.

When this exceptional sale is excluded, the average price per acre was just over €11,500.

A total of 95 farms were sold at auction in 2009 and reported in the national farming press. This compared to 110 in 2008, which was a dramatic decline from the 178 concluded auction sales the previous year.

Irish landowners who cashed in their assets in 2009 had a share of the €55,045,000 generated from auction sales.

One of the biggest factors influencing the market in 2009 was the absence of credit, auctioneers claimed.

This led to a significant number of properties being withdrawn at auction and later sold by private treaty. Such properties were not included in the annual survey on the basis that the sale amount is rarely made public.

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For the Farming Independent land price survey the country was split into five areas; Munster, Connacht, Ulster, the commuter-belt counties (Dublin, Kildare, Meath and Wicklow), and the rest of Leinster.

The prices used in the survey are prices of farms actually sold at auction that were reported in the farming press in 2009. Farms that were withdrawn from auction unsold, or sold prior or after auction, were excluded from the survey on the basis that the actual selling price is rarely revealed to the public. The highest amount paid for an agricultural property in 2009 was €6.075m, the total paid for Castle Annaghs Estate, a period residence on 550ac in New Ross, Co Wexford.

Almost 69.5pc of the farms sold during the year were less than 50ac, 16.5pc were greater than 50ac but less than 100ac, and 14pc larger than 100ac.

Auctioneers claim that the credit crunch stalled the market in 2009 and will continue to do so for the coming year unless credit is made more readily available.

However, there was general consensus that land prices had bottomed out in 2009.

Tom Crosse from GVM Limerick said prices had fallen from an average of €12,000-€14,000/ac in early 2009 to around €10,000/ac by mid-year.

However, the majority of sales in late 2009 were closed at prices of between €7,000/ac to €8,000/ac.

"It's closer to the economic value of land and probably the natural value of land at that level," he said.

Meath-based auctioneer Thomas Potterton said there was a new level in the market and farmers could now think about increasing the size of their holdings.

Irish Independent