Acceleration of remote working “will help the viability of small farms” according to the experts, but factors such as access to broadband continue to impact those in rural areas.

This was one of the key takeaway points from the launch of this year’s Institute of Professional Auctioneers and Valuers (IPAV) Farming Report, which took place yesterday (Tuesday, January 26).

2020 was labelled as a “torrid year” – but one that also had a “silver lining for land values”.

With prices going for up to €20,000/ac, “securing finance to purchase land remains a real challenge”, and “banks will often look for an additional income stream” according to one auctioneer.

Speaking at the launch yesterday, Philip Farrell, report editor, noted the importance of the government’s proposal to introduce legislation regarding remote working.

‘Help the viability of small farms’

“There’s a large cohort in the farming industry who are part-time farmers, who need to [work on] a full-time basis in order to make a profit and in order to pay their way,” he said.

He added that the ability to work from home, subject to good broadband, has significant importance.

Pat Davitt, chief executive of IPAV, said that the pandemic has had “the disruptive effect of more workers seeing living and working in rural Ireland as a realistic and achievable ambition”.

We’ve seen the return home of many of our exiles and while they cannot survive on farm income alone, the opportunities for off-farm income have greatly increased arising from the acceleration in working from home.

“This will help the viability of small farms and help to keep the tradition of the small farmer alive.

“Auctioneers are also seeing an increase in demand for rural properties from those living in the cities.

“The bottom line is demand for land remains strong; however, the amount of agricultural land sold each year is small and has been falling.”

What the experts say

Dermot Power of Power and Walsh, Clonmel, Co. Tipperary, said that the key drivers of land values “are profits that have been secured from dairying young farmers wishing to purchase”.

Stephen Barry of Raymond Potterton Auctioneers in Navan, Co. Meath, said that he saw increases in values in the general area of up to 4%, once the market resumed mid-year in 2020.

“The size of the dairy herd continues to increase at pace in the region,” Barry said.

Investors looking for a safe investment and some tax-free income have been extremely active. The inheritance tax efficiency of land is also driving this.

“Land is proving itself to be ‘Covid-proof’. Rents continued to be paid throughout the year. Its safety as an asset class was highlighted and demand literally soared.”

Meanwhile, in Williamstown, Co. Galway, auctioneer Gerry Coffey said that long-term letting of land “continues to be very attractive to young farmers”.

“Securing finance to purchase land remains a real challenge. Banks will often look for an additional income stream.”

Prices up to €20,000/ac in 2020

Key players that drove up demand in 2020 were dairy farmers and the “non-farmer cash investor”. Some of the highlights of the report are:

Meath region: Prices ranged from €10,000 to €20,000/ac; with key determinants being location, land quality and size of holding. Good quality non-residential holdings achieved €12,000/ac with average holdings being in the range of €8,000 to €9,500.

Donegal region: A minimal supply saw quality land achieve up to €20,000/ac for some small plots. Average prices for unbroken land were between €10,000 and €12,000/ac.

Galway region: Average land prices came in around €7,000/ac, with exceptional lots achieving €10,000. There was a floor of €4,500/ac for forestry.

Roscommon region: Demand was strong, particularly for smaller lots of 10 to 50ac – “local interest was the main driver here”. Leasing is of strong interest, with good quality ground at €200 to €250/ac, and lesser quality land at €150 to €180/ac.