Underlining the intrinsic health of the land market in Munster, this 100-acre farm on the south-facing hills to the east of Cork city looks set to sell close to its original guide price of €2 million.
What seemed like a very bullish asking price last September now looks like bang on the money, with the major portion of the property either sold or sale agreed at €1.6m, and negotiations continuing on the remaining, 26.7 acres, pegged at €300,000.
The auction drew a large crowd last Thursday. There were over 50 attendees, said Frank Walsh of Property Partners O’Mahony Walsh, including a number of solicitors and other auctioneers.
The house and farm were offered in lots initially. “We started with the house and eight acres and the rest of the land. The house had good interest, and opened at €525,000 and there were no further bids, at that stage we stopped. Then we offered the remainder of the land and there were no takers.
“We offered the lower end land, and that made €900,000 for the 56 acres, and then we tried the entire, and it was very slow but went up to €1.32m. But that didn’t make sense next to the sum achieved in lots, even if there were 34 acres left.
“But the priority was to sell the house. The overall price didn’t make the reserve, so the house was put on the market, and bidding started and was very active.
“It made €566,000.” The purchaser, David Watson, handled the bidding himself. It’s believed he lives overseas, but had the property well checked out before buying.
That left the remainder of the land, with a €1m reserve, and it was bid to €900,000. But a buyer emerged immediately afterwards and offered the full amount.
This was accepted and the land was sold and signed for on the day, by a solicitor acting in trust, says Walsh. The purchaser is believed to be a local farmer.
This element of the sale has created a benchmark €18,000 per acre for farmland, indicating a healthy market in the south.
It follows on the Kinsale hat-trick when three sales netted prices from €13,250 to €16,000 per acre for prime land. This Glounthaune sale, however, has set the standard for a year in which the turn came for farmland prices.
The benchmark €10,000 per acre still prevails however for average land. In fact, a 5.8-acre field at Killahora sold off-market for that sum.
Which leaves 26.7 acres remaining of the farm and according to Frank Walsh, there’s a serious bid of €250,000, with three bidders in the fray.
He expects to conclude matters at €300,000, close to the reserve, which will bring the overall sale to €1,924,000.
Farmers, at least, are backing the future of the country.
To be fair, Killahora House is an exceptional sale, in its location and size, a tidy rectangular block with excellent road frontage and quality, south-facing land.
The land, which fronts onto the old Midleton road and adjoins the boundary for Glounthaune village, also has development potential.
The two-storey five-bed house is plain, but offers plenty of space, and unlimited potential in its rear courtyard.
Originally tagged at €650,000, the house and lands with its old orchard, includes a derelict gate lodge which has either site or planning potential.
The land comprises old pasture and tillage ground, some after maize, with frontage onto a minor and a main road.
Killahora House probably isn’t a good yardstick for the average land sale — but it flags a trend.
The agricultural land market has been quietly picking up this year, perhaps because land is now back to reasonable levels where farmers can once more afford to buy.
While some may have lost their heads leveraging to buy properties abroad, or entering into ‘syndicates’ to purchase supermarkets in Germany, others kept their heads.
They now have the field to themselves when it comes to auctions and other cash transactions. Some exceptional sales this year may show a market on the way up.
With a stabilised banking system, a clear view to 2011, and optimism connected to the forthcoming election, the elements are there for a recovery in land prices, but not near the scale of what’s gone before.