Irish agricultural land values fall in the first quarter of 2016
Irish agricultural land values fell by 0.5% in the opening quarter of 2016, following a moderate fall of 0.2% during the final quarter of 2015, research carried out by Sherry FitzGerald shows.
This dip in land prices compares with growth of 1% in the first quarter of 2015.
The average price of farmland in Ireland at the end of March stood at around €9,750/ac, according to the research.
Across the various regions the research found that fluctuations continue, with land values mostly trending downwards with the exception of two regions, most notably the Midlands.
The Midlands witnessed an upward price movement of 0.7% in the quarter and 3.4% year-on-year.
Meanwhile, values in the Mid-East region grew by 0.4% in the three-month period.
The border region witnessed a fall in all types of land values in the three months to March 2016.
Furthermore, the opening quarter of 2016 saw a slight dip in prices in all of the three main types of land:
- Prime arable land values witnessed the largest fall in the quarter of 0.7%, to stand at approximately €11,600/ac.
- Prime grassland values fell by 0.5%.
- Marginal grassland fell by 0.3%.
While large parcels of land in Ireland, 100 or more acres which include a residence, witnessed a moderate decline in average values during the first quarter, such parcels were 1.4% higher year-on-year, according to Sherry Fitzgerald.
It has attributed the rise to price inflation in the South-East.
Speaking about the market, Roseanne De Vere Hunt, Sherry FitzGerald said that land prices fell back this quarter, largely due to hampered supply levels on the market.
“Following what was one of the wettest winters on record, most land sales have been delayed until late April/May.”
Prices are expected to stabilise in the coming quarters due to an anticipated increase in stock coming to the market.
Meanwhile, commenting on land in the better-performing Mid-East market, Padraig Sherry, Sherry FitzGerald Sherry, Dunshaughlin said that demand for agricultural land is somewhat stronger in Co. Meath, supported by limited supply and pent-up demand from neighbouring farmers, investors and recreational land users.
“Due to the close proximity to Dublin, demand for small plots of approximately 15-20ac from both local and Dublin-based clients has increased.
“Small plots can vary from €10,000/ac up to as high as €15,000. In terms of larger blocks of 100ac upwards, demand has increased from both domestic and overseas investors who see agricultural land as a safe haven for investment.”
Large commercial sized holdings can achieve €12,500-€15,000/acre, depending on if there are outbuildings on the farm or not.
When Sherry FitzGerald analysed sentiment in the marketplace at present, almost half of surveyed respondents regarded activity levels to be somewhat stable in the opening quarter.
Furthermore, it says that the past 12 months have seen a rise in the share of respondents reporting a decrease in activity, standing at 33% in the opening quarter.
The research found that it appears unlikely that the agricultural land market will experience the same level of price growth that was evident in 2015, due to more cautiousness in the marketplace, coupled with reduced activity stemming from a reduction in supply.