'Hope value' land makes up to €34,000

THE latest sector of the property market to experience a significant buying surge is agricultural land.

Builders and developers who can afford to take a chance on land being zoned for development are snapping up parcels of land around major cities and towns.

Real Estate Alliance members have sold €220 million worth of agricultural land already this year.

The group of more than 43 property dealing offices nationwide say they have a queue of cash buyers on the look-out for farms of all sizes.

Alliance chairman Philip Farrell, director of the Brophy Farrell, Newbridge, Co Kildare auctioneering firm, says people are investing close to expanding urban centres and hoping that in years to come, rezonings will increase the value of their investments.

While they wait, rental values to farmers can help to fund loans taken out to buy the sites.

And eventual sales along the development boundaries of towns can achieve up to four times the agricultural value.

Record sales of this kind have been achieved in big satellite towns around Dublin, such as Maynooth, where Coonan Real Estate Alliance has sold €9.7m worth of land, averaging up to €34,000 per acre.

Other big sales were recorded in Mullingar, Co Westmeath, where Murtagh Brothers Real Estate Alliance sold 1,500 acres of agricultural land for about €20m, with an average price per acre at €20,000.

In Newbridge, the average price per acre was also €20,000, with Brophy Farrell Real Estate Alliance selling 200 acres with a gross turnover of €4m.

According to Thomas Potterton, director of TE Potterton Real Estate Alliance, Trim, 40% of land they sell is bought by non-farmers for investment.

"A recent case in point would be five acres which we sold on the main Dunboyne to Summerhill road, which attracted serious interest at auction, nearly all from Dublin buyers.

"It was knocked down at €485,000, therefore I would say there was huge 'hope value' attached to this land," said Mr Potterton.

TE Potterton Real Estate Alliance also sold 600 acres in Trim, Co Meath earlier this year for €10.5 million, or €18,000 per acre.

With very strong demand also from "lifestyle buyers" for hobby farms, Real Estate Alliance say they have had several serious cash buyers who urgently require farms of all sizes throughout the country.

About one fifth of all land sales outside cities is to lifestyle buyers, according to the Alliance.

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