Cash was king when it came to land sales in Ireland during 2023 according to the results of a new survey published by the Real Estate Alliance (REA).
It found there was an estimated jump of 30% in land sales by its agents during 2023 and the majority of these purchases – 66% – were made by “cash buyers” .
The countrywide property group of chartered surveyors, which has 50 branches nationwide, said a survey of its agents showed that in the region of 2,661ac of land was sold “for over €37.088 million last year.
Feed back from its agents showed “a slight increase” of 1.5% on the per acre price paid with an average of €13,940/ac paid in 2023 compared with €13,725/ac in 2022.
“Cash buyers continue to dominate farmland sales with over 66% of land purchases funded out of cash reserves.
“Local farmers account for 65% of farmland purchasing and when other farming customers are included the proportion of farmer-buyers reaches over 67%,” REA stated.
According to Nenagh auctioneer Eoin Dillon of REA Eoin Dillon 2023 was one of the busiest years on record for him.
“There were often 10 to 12 dairy farmers vying for the same parcel of ground and lots of disappointed underbidders,” Dillon added.
The average size of holding sold in 2023 increased, according to the estate agents, from 27ac to 29ac in 2023 while farms of less than 50ac accounted for 90% of all land sales.
Land sales
The survey highlights various trends nationwide including that in 2023 buy-to-rent investors accounted for almost 9% of the market but REA is forecasting that this will “decline substantially in 2024”.
Other key trends from its latest land sales survey include:
- Forestry buyers made up 7.7% of land purchases in 2023;
- Residential and development buyers made up a combined 5.5%;
- 22% of people who sold farmland in 2023 were “siblings divesting ownership”.
According to REA the number of farmers “downsizing” via land sales last year was “equal to the percentage of farms being sold due to probate”.
It said that “traditionally” probate reasons are a key driver of land sales.
Meanwhile feedback from REA agents also suggested that 14% of land sales had taken place in 2023 to “fund other enterprises” while 11% of sales were intended to “fund retirement” with 6.6% of sellers moving out of farming.
One notable characteristic from the 2023 survey was that 8% of vendors were recorded as “living overseas”.
Sectors
Mixed farms tended to be the most popular farm enterprise that had a for sale sign last year – according for 32% of all farms sold by REA actioneers.
Beef farms accounted 27% while sheep and tillage holdings each accounted for less than 10% of sales and smallholdings was just 8%.
The amount of land sold for forestry in 2023 by REA agents was estimated to be 6.6%.
Rented land
One key national trend identified in the 2023 survey by REA was the cost of rented land.
It highlighted that over “83% of the grassland with entitlements” made between €300/ac and €500/ac last year.
Seamus Carthy from Roscommon based REA Seamus Carthy said “a shortage of land for lease or purchase” was an on-going problem and he is aware of significant amounts of land “tied up in long-term leases”.
“Sheep farmers were very active in the market here with prices from €8,000 and €12,000/ac depending on the quality of the land,” he said about the 2023 market.
Overall according to the chair of REA, John Stoke from Stokes & Quirke, Clonmel, the shortage of land available for rent of purchase, which was particularly acute in certain counties, during 2023 was reflected in the sales results.
He said feedback suggested that “whatever sold achieved strong prices”.
Co. Meath, auctioneer, Thomas Potterton, also said 2023 was the first year he had a 100% result at all auctions.
“Everything we brought to auction sold under the hammer,” Potterton added.