THE price of agricultural land has collapsed by more than a third over the past two years while the amount of land put on the market in the first six months of the year dropped by almost half.
Prices are now heading to the levels they were seven years ago, the Irish Farmers Journal revealed in a preview of its annual agricultural land report.
Value analysis also indicates that average prices have dropped by over 35% in the past two years alone.
The report found the amount of land brought to the market during the first six months of 2009 is down by almost 50%. A supply drop was anticipated due to the recession, but the size of the decrease surprised many in the sector.
Some 22,500 acres were offered for sale in the first six months of this year compared with 42,836 acres for the same period in 2008, a 47% drop.
What should have been the busiest time for land sales was one of the quietest six-month periods of the last five years.
The report noted that some 1,050 farms or land parcels were offered for sale in the first six months of 2008, compared with 498 for the same period this year, a 53% decrease.
Public auction, however, remained the preferred method of selling land, but the withdrawals rate remains high with 63% of farms failing to sell so far this year.
Meanwhile, an Oireachtas committee meeting was told that NAMA will only pay agricultural prices for vast swathes of land that had originally been purchased for development when the property market was in full flight.
NAMA’s independent property valuation expert, John Mulcahy, said there is a real issue that there are many rural areas where land dramatically exceeds any supply (need) for the foreseeable future. Predicting that a lot of this land would revert to agricultural values, he said: “That’s what we’ll pay for it.”
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