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Sunday 17 December 2017

Reversal of fortune as farmers pay fraction of price for land sold during the boom

Darragh McCullough

Darragh McCullough

THE line that it is "a great bit of land with nice development potential" has been turned on its head.

Now you are more likely to hear the auctioneer touting the same development land as having "great farming potential".

Every week, deals are being done where farmers are buying back the land they sold during the boom.

However, those hunting bargains in farmland owned by NAMA will have to wait for another while yet.

All the receivers that are handling the 32 farms owned by NAMA north and south of the Border were remaining tight-lipped yesterday about the specifics surrounding each holding.

But it is fair to guess they will struggle to make much more than a fraction of what they were bought for over the past decade.

At the height of the boom, in the summer of 2006, a 275-acre farm in Laois was described by the auctioneer on the day as having "no development potential whatsoever" but was sold for a record price of €17.2m -- more than €60,000 an acre.

These days, many of these farms are still being worked by the original owners.

Last week, a Laois farmer bought back the 61-acre residential farm he sold at Rathdowney for €333,000. That was less than half of the €740,000 that he sold it for back in 2005.

And it is also expected that several golf courses will disappear under the plough and revert back to food production over the next 12 months.

The Heritage Golf Club is one of the properties listed by NAMA, while negotiations are ongoing over the Turvey golf course at Donabate in the heart of the market gardening area of north Co Dublin.

The receivers are asking €12,000 per acre for the prime land.

It's a far cry from 2007 when 50,000 acres traded during the year, averaging over €20,000 per acre.

And while farmers' balance sheets may not look quite as rosy as they once did, for most, the crash in values is a blessing in disguise.

It has let them back into the land market as buyers again.

NAMA receivers can expect plenty of calls regarding the fattening value of land that may once have been destined for health resorts.

Irish Independent

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