‘Touch of boom activity evident in land sales amid uncertainty’
“A touch of the boom time activity in the mid-noughties is evident at the moment with property, especially land, amid current uncertainty.”
That’s the view of Eamonn O’Brien, general manager of CCM Property Network, who said the trend is being driven by economic and political uncertainty.
“Money is bouncing around the place, with guide prices being quickly met and exceeded,” he said.
“Normally you would be working towards the guide price which for me is where the current perception of the market is at. That is now being exceeded by up to 10% around south Munster.”
With 60% of his buyers farmers, the others are investors who might be second or third generation off the land, he said. “One recent enquiry came from an IT guy who liked the idea of buying land. Everything from 10ac upwards is being sought.
“Other sources of interest can be someone with a windfall inheritance or share option maturing.
One particular investor was a man of elderly years who lived in the city but was originally from a farm. He was concerned that his wife was a generous grandmother so he bought a parcel of land from us so that she would have a nest egg in time to come when he would have passed on. The land was rented out for a number of years and passed on to his wife on his passing.
“Another investor is the person who has recently retired from work, has a lump sum and does not want the hassle of bricks and mortar or dealing with tenants,” Eamonn contended.
“CCM Property is a division of Cork Marts Ltd so we are well placed to find a tenant, set the price, draw up a lease and collect the rent for a landlord if they so wish,” he said.
Coastal land has proven to be particularly attractive, according to Eamonn. “This includes Youghal, Redbarn and Garryvoe where we sold 30ac, having put signs up on Friday and having an offer of €12,000/ac on the following Monday morning. The buyer was a farmer who wanted additional land.
“We currently have a number of farm properties that have either recently gone ‘sale agreed’ or are under offer at present,” said Eamonn.
“We recently sale agreed three properties of 114ac, 63ac and 10ac. All of these exceeded their guide price by 10%,” he said.
“Land prices per acre this year to date have varied from €8,000/ac to €15,000/ac. The average price of €10,000/ac has increased to €12,000 for nice quality farmland.”
It’s evident that many see buying land at the moment as a ‘no brainer’, Eamonn stated.
“If you have an acre of land and a single farm payment of €100/ac, you may be looking at an income of €350/ac. This allows for a ground rent of €250/ac and a top-up with the single farm payment. When the land is let in excess of five years, tax relief will kick in,” he said.
“Bare land with no single farm payment is also a very attractive option,” Eamonn said.
“At times of uncertainty, it’s evident that people run for valuable assets such as gold or precious metals.
Irish people like to buy land – it’s the Irish man’s gold and to use the old cliché, they’re not making any more of it. Farmers and non-farmers are looking for security and a good return on investment. Farmland is asset-backed and tangible – it can’t vanish overnight.
Currency fluctuations associated with Brexit and the possibility of tariffs along with climate change and the global recession are all feeding into the demand for what is seen as a solid investment, according to Eamonn.