The strong growth seen in agricultural land values in Ireland has continued throughout 2022, despite a turbulent economic environment which saw consumer price inflation peak at 9.2%.
According to the Sherry FitzGerald Agricultural Land Barometer published today (Wednesday, February 8), land values grew by 11.5% over the year, with a 2.9% increase seen in the fourth quarter of 2022. This compares to a growth rate of 10% in 2021.
At the end of 2022, the weighted average price of farmland nationally, excluding Dublin, stood at approximately €10,850.
Farm land values
It is the largest increase in agricultural land prices recorded since the Sherry FitzGerald Agricultural Land Barometer began recording prices in 2013.
The weighted average price per acre of farmland at the end of 2022 stood at approximately €10,843/ac, up from €9,279/ac at the beginning of the year.
The Agricultural Land Price Barometer saw all farmland increase to a reading of 119.2, up from 107.1 at the beginning of the year.
Price growth was seen throughout the country in 2022, with the midlands being the standout region, experiencing a 21.9% increase in agricultural land prices per acre.
The southwest (+16.6%), mid-west (+12.9%) and mid-east (+11.1%) also experienced significant price increases, with the growth in each region respectively being more than double that seen in 2021.
This was followed by the west (+8.5%) and southeast (+5.4%). The border region saw only 2.7% of growth throughout 2022, this is compared with 13.2% for the previous year.
Most expensive land
The most expensive region for agricultural land at the end of 2022 was the mid-east, with a price per acre of €12,667, up from a price of €11,400 in 2021.
The west region remains the least expensive region, with a price per acre of €6,634.
The final quarter four of 2022 saw prices rise 2.9%, an increase from 1.8% in the previous quarter. This compares to a 1.5% increase seen over the same period in 2021.
The border region experienced the strongest level of price growth in quarter four of 2022 with an increase of 7.7%.
The midlands and mid-east saw price growth of 4.8% and 3.7%, respectively. The mid-west (+3%), southeast (+2.8%) and southwest (+1.5%) also saw prices rise throughout the quarter.
Conversely, the west region experienced a decrease in values of -1.8%, according to Sherry Fitzgerald.
Commenting on the market, Philip Guckian, associate director, Country Farms, Homes and Estates with Sherry Fitzgerald said: “The growth in land values seen in 2022 will come as no shock given the exceptional performance seen across the agricultural sectors.
“Dairy, tillage and cattle farms have had one of the most successful years in recent history, despite the unstable economic climate.
“Land values across the country experienced growth of 11.5% in 2022, overshadowing the distinguishable growth seen throughout 2021. This will come as an encouraging sign for potential vendors who are looking to offload their lands,” he added.
2023 outlook
Guckian explained that there is also an increasing appetite for land from non-farming buyers who are looking to extend their outdoor space.
“We expect 2023 to be another strong year for the agricultural land market,” he said.
According to Sherry Fitzgerald, in 2023, several factors will impact the Irish agricultural land market. Rising prices may see the supply of land coming to the market increase as landowners look to achieve capital gains.
There has been a rising popularity of vendors letting lands to larger farmers who possess the scale to achieve higher marginal returns, according to the property agent.
The wider economic climate is expected to remain turbulent over the coming year, with price inflation, particularly in oil, putting further pressure on farmer margins, according to the Agricultural Land Barometer.
Unpredictable weather because of climate change may also hamper the performance of the tillage market, but the demand for commodities will remain high as the global economy continues to unwind itself from supply chain constraints.