Agricultural land values fall in opening half of 2020; with 'modest' price reductions

Agricultural land values in Ireland noted a “modest decline” in the opening half of 2020, according to the latest data from Sherry FitzGerald Research.

The research further noted that land values declined 0.6% in the second quarter, with prices cumulatively reducing 1.1% from the beginning of January to the end of June.

As such, the weighted average price of farmland in the country, excluding Dublin, stood at approximately €8,800 at the midpoint of the year.

While the opening quarter saw agricultural land values remain “largely resilient”, quarter two was the first full quarter impacted by the Covid-19 outbreak and national lockdown.

However, these events did not appear to have a substantial impact on values in the quarter. Price reductions in the land market were modest and compare directly with 2019, where values fell 1% in the first half of that year.

Drop-off in new supply

In terms of farm types, there was little change in prime grassland values in the first six months of the year.

According to Sherry FitzGerald Research, grassland values reduced by a marginal 0.3%. Comparatively, prime arable and marginal grassland farm types saw larger falls, but still at relatively modest levels of 1.7% and 1.5% respectively.

At the end of June, the weighted average price of prime arable land in Ireland, excluding Dublin, was approximately €10,600/ac and €9,900 for prime grassland.

In terms of regional price performance, the border region saw the largest reduction in prices in the year to date at 3.4%. More moderate decreases of 1.7%, 1% and 0.9% were recorded in the mid-east, midlands and south-west, respectively.

While Sherry FitzGerald agents have reportedly noted that there has not been a significant decrease in sales compared to the same period last year, there has been a drop-off in new supply being brought to the market; a trend that mirrors what has been seen in the residential market.