Farmland sales fall for second year running in line with expectations

SALES of Irish farmland fell significantly in 2008 for the second year running, which was in accordance with expectations.

The drop was more or less in line with the fall experienced in the overall Irish property market, according to independent global property consultants Knight Frank.

In a national agricultural land price survey, carried out annually by Knight Frank in Ireland (formerly Ganly Walters), it was found that in the past 12 months prices have fallen by 16.8% on average.

They declined significantly in 2008, but the biggest fall occurred in Dublin and surrounding counties of Kildare and Wicklow. The national average price for farmland was e21,145 per acre in 2008, representing the 16.8% drop.

In the Dublin hinterland, (Counties Dublin, Kildare and Wicklow), which are analysed separately because of the significantly higher prices paid for farmland, they fell on average by 17.5%. The average price dropped to e25,210 per acre last year from e30,543 per acre in 2007. This was an overall drop of e5,333 per acre, giving a fall of 17.5%.

Tthe rest of the country fell slightly less, by an average of 16.1%, with prices averaging e17,081 per acre in 2008, down from the previous year’s average of e20,367, representing an overall fall of e2,750 per acre.

Robert Ganly, Knight Frank partner, said the overall decrease in values was only to have been expected in the current property market downturn.

Mr Ganly said the agricultural land market has been propped up over the last five years by farmers and landowners who were replacing land as a result of development sales. This year is likely to see further erosion.

There can be little doubt that the current crisis in development land will have a further knock-on effect on agricultural land values over the next couple of years.

Mr Ganly urged those farmers and landowners considering selling land in the coming year to be sensible about pricing, predicting a good demand for realistically priced land.