‘Land continued to sell, achieving strong prices’
There was never a year with so much negativity in agriculture and yet land continued to sell, achieving strong prices and creating competitive bidding, according to Clive Kavanagh, director, Jordan Auctioneers.
“A key factor of this is emotion and the fear that if you don’t buy now, you might not get a chance again.”
Family values remain strong. “An interesting statistic is that the average field in Ireland gets sold once every 400 years outside of a family compared to once every 70 years in France.
“In addition and having sold just short of 2,000ac throughout the year, we noted several trends in the market.
Farmers remain active and willing to purchase lands, particularly if they are adjacent and overall debt levels remain low on the farm. Dairy farmers are especially keen to buy lands adjoining and, in some instances, they were trading an out-farm to do so.
“When advising landowners, the strength of the farming community in the area is a key determinant of value. Regions with hobby farmers and business-people dominating the ownership structures were proving more difficult to achieve sales in over the last year,” he said.
“All the land we offered for sale in 2019 sold at prices largely reflective of the last number of years. There was no major cooling off in interest levels or prices achieved. We would not consider looking at an average across an entire region as this can be very simplistic and variations on same can be substantial,” said the Jordan director.
Dependent on finance
Finance remains a strong consideration. “For the third year running, we have experienced far more transactions dependent on finance to complete. Of our sales this year, approximately 80% were subject to lending facilities. In the Celtic Tiger years this number would have been the opposite, with 80% cash-based,” Clive said.
“In some instances where holdings were offered in lots, there was better interest largely due to the fact of affordability on a smaller quantum and that adjoining owners could buy sections. Careful sub-division and strategy is essential regarding this.
“There was some interest from Northern Ireland and UK-based buyers due to the general uncertainty and, in several sales, they were active bidders and remain in the market for suitable properties.
Looking forward into 2020, we would envisage a similar year to that just gone with continued uncertainty and possible negative sentiment in agricultural circles but with trade continuing regardless and no major drop in prices.
“Key fundamentals remain including strength of the local market, active adjoining neighbours looking to acquire additional land and the quality of the property on offer,” Clive said.
The Brexit countdown continues, he said, with clarity on a final position still unresolved.
“We felt the impact of this more acutely on the supply rather than demand side as some potential sellers were reluctant to go to market due to uncertainty and negative sentiment.
“The tax benefits of longer term leasing arrangements meant that some people who initially spoke to us opted for this route rather than make the final decision to sell.”