Just last Monday, one of the last public auctions of 2016 took place at the Cahir House Hotel in Cahir, Co Tipperary.
The 25.75-acre property that went under the hammer was situated just south of the town and close to the village of Clogheen. As it turned out, the sale price in the executor auction sale was in line with expectations, as auctioneer John Fitzgerald of Dougan Fitzgerald Auctioneers explained: “We had a good crowd, and it was sold to a local farmer for a price of €310,000.”
The stated price expectation was “between €10,500 and €12,000”, so the final figure of just over €11,200 per acre was just about spot on.
“We had two bidders, both farmers from the locality, and a neighbouring farmer ended up being the buyer.
“It opened at €280,000, and it was on the market around the €300,000, and it worked its way up to €310,000 quite quickly. It was over very fast.”
Auctions over the course of 2016 seemed to be fewer on the ground than they were in 2015, but the success rate was impressive, and many auctions brought the sale price above expectations.
According to Sherry Fitzgerald’s Irish Agricultural Land Market report of last month, Quarter 3 of 2016 saw another drop in the average land price nationally.
Clocking in at €9,550/acre, this figure is down 2.7% from the same time last year.
The fall-off in agricultural land values is part of a continuous trend since Quarter 3 of last year, following a period of often stop-start growth over the previous two years or so. Arable land seemed to take the brunt of the fall-off in values; particularly in the south-west, with the highest drop, at 6.8%.
The marginal land price, on the other hand, is falling at a far more modest rate.
Marginal land with forestry potential or existing forestry is attracting a certain kind of institutional long-term investor into the mix, which is pushing prices for this type of holding.
One of the results of the year in terms of marginal land was the auction in West Cork by Dunmanway-based Daniel Lehane. He sold a 70-acre mixed-quality farm near Kilmichael, Macroom on November 24 last for €5,700/acre. This was pretty much the upper level of forestry land.
An 8-acre portion of agricultural land near the Gold Coast, outside Dungarvan, Co Waterford was sold at auction for a figure that was just shy of €24,000/acre.
Auctioneer Éamonn Spratt said that the result was evidence of the “demand for small holdings in the general Dungarvan environs, consistent with the recent strong prices achieved for residential properties.”
Public auctions seemed to fare reasonably well in most cases, but finding sales where the price exceeded €12,000/acre was not easy.
One exception was a 48-acre farm at Clarina, Co Limerick, which was sold last month by GVM Auctioneers.
Sold in four lots, it went for just over the €12,000/acre mark.
Back in June, a brace of farms in South Tipperary both made over €13,000/acre.
The first was a 65-acre grass farm near Thurles, and the second one was a 26-acre holding. In July, a 35-acre farm near Lissarda in West Cork was sold by Killian Lynch for €12,800/acre.
For 2017, sentiment is likely to remain cautious — at least until some concrete improvements can be seen in the fortunes of the dairying and grain sectors.
It’s the dairying that currently seems to be offering the best hope. Following the modest increases in the price of milk over recent months, macro-economic indicators are that this trend will continue for much of 2017.