Despite the challenges of Covid-19 and Brexit, land prices in 2020 have remained “remarkably resilient” throughout the country, according to new data published today (Tuesday, January 26).
While volumes may be down arising from the pandemic, with some vendors holding off on selling, demand is “particularly strong with notable interest from cash rich non-farmers chasing a better return than they would get elsewhere”.
‘Breathe new life into rural Ireland’
Pat Davitt, chief executive of IPAV said there are a number of factors driving demand.
“Some of these factors have been with us for some time, such as smaller farmers wishing to increase their holdings where neighbouring, usually small plots, come on the market; and larger farms consuming smaller ones and continuing interest in land leasing, particularly by younger farmers who are not in a position to buy their own holdings,” Davitt said.
“However, the newer factors include investors chasing a better return on their money, returning exiles and the normalisation in working from home.
These latter factors in particular augur well for the future of rural residential holdings and land values. If they are sustained, they will improve viability on smaller holdings, with greater opportunities for off-farm income and will breathe new life into rural Ireland.
Davitt said as the Covid-19 pandemic persists into 2021, it is likely to again impact the volume of land coming onto the market, at least in the first six months of the year.
Age profile of Irish farmers
The age profile of Irish farmers is on “the high side” with about one-third over the age of 66.
“Leasing land long-term has become the only viable option in recent years for many young farmers hoping to run their own farms,” Davitt continued.
Last year’s increase in Stamp Duty to 7.5% is an additional impediment for young, ambitious and educated farmers in attempting to buy holdings.
“We’re going to need such farmers to lead and drive new opportunities in the ‘green economy’.”
Some highlights from the IPAV Farming Report
Munster
Limerick region: Prices averaged €11,000/ac for larger-sized holdings; with smaller holdings securing in the region of €17,000.
Tipperary region: Mid-sized quality grassland and tillage holdings secured €15,000 to €16,000/ac with dairying being strong; as well as young farmers purchasing. Most lands coming for sale are either “as a result of the death of the landowner or the land is being sold by a financial institution”.
Leinster
Kildare region: Good quality grass and tillage achieved up to €15,000/ac, the smaller the acreage the higher the price. Influence of commercial farmers and the bloodstock industry was “strong in buying larger holdings”.
Meath region: Prices ranged from €10,000 to €20,000/ac; with key determinants being location, land quality and size of holding. Good quality non-residential holdings achieved €12,000/ac with average holdings being in the range of €8,000 to €9,500.
Connacht
Galway region: Average land prices came in around €7,000/ac, with exceptional lots achieving €10,000. There was a floor of €4,500/ac for forestry.
Mayo region: The price per acre for good quality land was between €6,000 and €8,000. An uplift in forestry sales saw prices for holdings in excess of 30ac increase to between €4,500 to €5,000/ac. Land lettings achieved from €110 to €135/ac.
Ulster
Cavan region: Price per acre was in the €6,500 to €8,000 range. Forestry is securing up to €5,000/ac.
Donegal region: A minimal supply saw quality land achieve up to €20,000/ac for some small plots. Average prices for unbroken land were between €10,000 and €12,000/ac.
Lesser quality land is going for around €8,000/ac and rural poor grazing land at about €3,000/ac. Demand is good for farms up to 30ac and up to values of €300,000, which is “very attractive to local farmers”. Demand is poor for land which is not suitable for forestry.