Land prices remained resilient last year despite the threat posed by Covid-19 – and are predicted to rise by 4% on average this year, according to a new report published by the Society of Chartered Surveyors Ireland (SCSI) and Teagasc.

This ascent is underpinned by a rise in farm incomes as well as strong demand and reduced supply, the two entities note.

In a major new survey, auctioneers, valuers and chartered surveyors operating in the agricultural and rental markets, say that restrictions on viewings due to lockdown led to a decrease in the volume of sales, as prospective sellers opted to defer their plans to sell.

Land prices

According to the Society of Chartered Surveyors Ireland / Teagasc Agricultural Land Market Review and Outlook Report 2021, demand for rented ground also remains strong with rents this year expected to rise by 8% in Leinster, 5% in Munster and 6% in Connacht.

Nationally, the price for non-residential land ranged from an average of €5,900/ac for poor quality land to €9,381/ac for good quality.

The survey of 156 auctioneers and valuers from all over the country was conducted in February 2021.

A new feature in this year’s annual survey, the eighth in the series, is that it now provides a county-by-county breakdown on prices of good land and poor-quality land.

Provincial breakdown

The report finds that Leinster had the highest prices in 2020 because of the higher quality of land in the province and the high demand for it.

For good land, less than 50 acres, average prices in the province ranged from a high of €13,600 in Kildare – the highest in the country – to €7,900 in Longford, while the prices for poor quality ranged from a high of €8,300 per acre in Kildare to €5,500, again in Longford.

In Munster, where dairy farmers are driving the market, prices ranged from an average of €11,900 per acre in Tipperary to €9,000 in Clare, while prices for poor quality land ranged from an average of €6,500 in Waterford to €4,700 in Clare.

In Connacht/Ulster prices for good land ranged from an average of €9,500 per acre in Donegal, to €6,500 in Monaghan, and for poor land from €5,750 in Monaghan to €3,250 in Leitrim, the lowest price in the country.

Driving forces

James Lee, chair of the SCSI’s Rural Agency Group, said that lockdowns due to Covid-19 had led to a reduction in the volume of sales, adding:

“The inability to view holdings or physical auctions led to a significant increase in the number of sellers postponing plans to sell land.

“In our survey, over a third of agents [35%] reported a decrease in the volume of land sold in 2020 compared with 19% in 2019. Virtual viewing options have been available to sellers, but clearly many have a preference for more traditional auction sales.”

“Agents in Leinster say younger farmers with a Green Certificate, which is a level 5 qualification, are helping to drive the market. However, they caution that land price expectations from some vendors are simply unrealistic at this present time.

“In Munster dairy farmers are the most active buyers and renters of land as they continue to strive to increase their farm size to achieve economies of scale,” he continued.

“In Connacht/Ulster average land quality is typically lower than other regions, tends to be available in smaller lots and is mainly for grass-based agriculture.

“While Covid has affected sales activity, it hasn’t affected output or prices and as a result farmer confidence about the future has been unaffected [and] has remained strong.

“The land market has shown strong resilience throughout the pandemic and agents believe prices will rise on average by 4% this year.”

Rental market

Continuing, Cronin said: “In the rental market, while Connacht/Ulster reported a decrease in prices last year – by 13% for grazing land – prices are expected to rebound by 6% this year, a little behind Leinster on 8% but ahead of Munster on 5%.

“The low level of supply is again an issue in the rental market, but its not Covid related. Here the issue is leases with 24% of agents reporting a decline in the volume of land leases in 2020.”

This is compared to just 8% in 2019, as more land is ‘locked up’ in long-term leases, Cronin said.