Ignore blip, land values to rise 5% in 2014
And coupled with the slight decline found, Knight Frank have logged increased transactional activity all over the country, a good sign in itself — this could be extrapolated as indicating that sellers and buyers now believe it’s a fair market.
That’s an equilibrium that is hard to beat and is down to the current health of Ireland’s agricultural industry and to the confidence felt by farmers and their backers.
In this case, the slight decrease may be laid at the door of sense and value and a great harvest year and also, the increasing confidence in the market overall, which may have seen banks spread the money into other sectors, following a concentration on agricultural property.
And that’s been all to the good for land price inflation, which appeared to grow at an unsteady rate, especially in this end of the country, Munster, where dairy farmers sought to increase their grazing platforms in preparation for free-market realities.
Although the national trend in agricultural land values seems to have stayed steady, the number of land sales is well up.
The national survey also shows that the average price for farmland nationally in 2013 was €10,500 per acre. In 2012 it was €10,586 per acre and MD of Ganly Walters, Robert Ganly puts it down to a minor glitch in a market that he sees as expanding.
“We are currently experiencing a strong demand that looks set to continue for the year,” said Mr Ganly. “With the good winter so far and the likelihood of substantial yields, coupled with a strong performance in the dairy sector, we expect values are likely to increase by as much as 5% overall in 2014.”
The survey also found that far more land came to the market and changed hands — with more successfully completed transactions in 2013. This market development is a highly promising one for the farming economy, Ganly says.
Despite the small per acre decrease, statistically speaking, land sales nationally increased by 13%, the survey shows, and again, most of the farmland is purchased by farmers, who have had the field to themselves, (literally) since the Tiger’s demise.
Over the entire country almost 13,432 acres changed hands during 2013, compared to 12,100 acres in the previous year. Of these, prices rose throughout the country, with the exception of the midlands and south west regions, which saw some decreases in values in certain areas.
REGIONAL ANALYSIS
And the Ganly Walters survey showed a complete turnabout in agricultural land values for some regions.
Northwest/West
The Northwest/ West, after a slight decrease in 2012, saw prices rise dramatically in 2013 by just over 20% — with the average price per acre at €8,557, compared to €7,082 in 2012. Sales also doubled on the average for 2013.
East
For the second year running Dublin, Kildare and Wicklow, recorded a strong increase of 14.2% on the previous year with the average price paid at €14,427 in 2013, compared to €12,636 in 2012.
Southeast
The Southeast region comprising counties Kilkenny, Wexford, Carlow and Waterford, had one of the highest national average increases at 14.9%, with land rising to €11,959 per acre from the 2012 average of €10,408 per acre. Holdings of all sizes saw an increase.
Midlands/Southwest
However, average land values in both the Midlands and Southwest regions dropped in 2013, following increases the previous year.
In the Southwest region, the average price was €9,204 per acre in 2013, well down when compared to the €11,588 per acre paid in 2012.
The average price paid for land in the Midlands in 2013 decreased to €9,202 per acre, compared to €10,190 in 2012.
The number of transactions was also down.
Northeast
There was little change in values for the Northeast.
Commenting on this latest survey, Robert Ganly said: “It’s very positive news, particularly in terms of market movement — the amount of acreage being put up for sale and the number of transactions successfully completed are both well up.”
