Farmland headline numbers still figure large on the agri-land value landscape
Demand for farmland in Ireland is very strong currently, with a lot of land tied up in leases.
Agricultural land, by its nature, is coveted in clusters rather than as a whole.
In other words, while one can mathematically work out that the average price for quality grassland in Munster is €16,300/acre* and in Ireland is €12,800/acre* (*IPAV report), the headlines are formed by the regular occurrence of spikes in land prices where two or more buyers have been waiting for a certain amount of time for a piece of land to come on the market that suits their particular needs.
“There was a massive sale, for example, near Innishannon during the year,” says Andy Donoghue of Clonakilty-based Hodnett Forde Property Services. “It wasn’t sold for development land, it wasn’t sold for speculation — it was sold as farmland.”
That parcel is said to have fetched in the region of the high €30,000s per acre — an extraordinary result, not matter which way one looks at it.
“We’re not surprised that land parcels are making over €20,000/acre,” says Andy, “when it’s land of good quality and in the right area.”
In the West Waterford/East Cork area, auctioneer Brian Gleeson is witnessing a similar trend: “Our overall impression of the year so far is that the market is robust with continued confidence in the market especially where quality land is involved,” says Brian. “We have had an active season of selling agricultural land with strong prices achieved. One non-residential farm sold under auction at €20,000 per acre. There was local interest in this holding, with the successful purchaser being an entrepreneurial progressive dairy farmer.
“There is a mixture of progressive dairy farmers along with successful business people deciding to invest in good agricultural land and there’s good demand for both planted forestry and land that would be suitable for planting.”
“It’s been a very busy period,” says Tom Crosse of Limerick auctioneers GVM. “We’re noticing price increase, despite the fact that interest rates haven’t begun to decline and that milk prices are a little bit softer than other years.”
In the Limerick area, he says, the prices are being driven more by the business community than the dairy farmer.
“We’ve seen prices hardening,” says Tom. “In my experience, they’re up about 10% on last year. We’re now seeing fairly good land easily making €15,000 to €18,000/acre and we’re seeing exceptional cases — such as with Kilcolman — making €28,000-€29,000/acre. We’re seeing forestry land bottoming out at around €7,000/acre and we’re seeing moderate land making around €10,000/acre.”
Meanwhile, Celia Lamb, land and property manager for Ireland with Wilsons Auctions, reports that the firm is seeing strong demand from farmers and investors in all areas of the country.
“The dairy sector is still the strongest purchaser in the market,” said Celia. “We believe that price increases will continue to be driven by high demand and low supply.
“In fact, as demand for land continues to rise, buyer interest in marginal lands will very likely also continue to grow, and this rise in demand will see smaller plots fetching stronger prices.
“It will be interesting to see what the last quarter of the year will bring. The one concern I would express would be how any exceptionally poor weather conditions will impact on land values. This year, the adverse weather impacted very negatively on agricultural output, production costs and farm incomes.”
Matt Ryan of Matthew Ryan & Son in Tipperary town also reports a healthy scene punctuated by spikes in prices in the Premier County, but with farmers regaining their first place amongst purchasers of land.
“There’s been a good level of demand for land all the way through the year,” says Matt Ryan, “with farmers buying, rather than investors.
“In terms of sales, we were busier at the back end of the year after a relatively quiet Spring. Our best price was for a property that was higher land that had been reseeded, but which still made around €15,000/acre. Our lowest was around €7,500/acre for marginal land.
“We’ve also had good interest in forestry land from across the board — both from investors and institutions. We’ve had a maximum of €8,000/acre for good quality mature forestry.”
“We got €18,000/acre for land in Meath,” says Pádraic Murtagh of Mullingar-based James L Murtagh & Associates. “After that, it generally varied from €9,000 to €12,000 per acre. In some parts of the country, large land holdings aren’t available and people are prepared to travel longer distances to acquire them.”
Éamonn McQuinn of McQuinn Consulting in Tralee has seen prices in his part of Kerry perform well in the past year, but the famous effect of the ‘Kerry shares’ seems to be waning.
“In the first quarter of this year, we closed a sale of 33 acres in Abbeydorney for €680,000 (€20,600/acre),” says Éamonn. “That was probably the standout one for me. The land quality was exceptional in that case.
“What I’ve really seen in the last year is that it was a tough year for agriculture. The way things are shaping up, it’s looking like being a middling year. For land prices in Kerry — particularly in north Kerry — they’ve reached a plateau in my opinion. They have neither increased nor decreased to any significant extent.”
Where Éamonn has noticed a great deal of activity is in the leasing side of the market, with some leases fetching €500/acre.
“Going by this year, the demand has been massive,” says Éamonn. “This is mainly in large commonage areas, such as mountains with a couple of hundred acres, for example.”
There is, Éamonn says, a premium being paid by the market for good quality land around north Kerry. Whilst this has plateaued in sales figures, it is being strongly felt now in the leasing prices being achieved, with leases of increasing length being the norm now.
“Many farmers who are exiting farming and seeking a change of lifestyle are inclined to let out the land for a term first, before finally selling it… Leasing is the first step towards selling, in other words.”
