Land prices are expected to rise by an average of 6% this year, according to a new survey released today (Tuesday, April 12).

The Agricultural Land Market Review and Outlook Report 2022 published by the Society of Chartered Surveyors Ireland (SCSI) and Teagasc also shows that rental prices are expected to jump by 10%.

The survey of 95 auctioneers and valuers from across the country was carried out in February and March 2022.

Land prices

Auctioneers and valuers reported strong growth in land prices last year, particularly for good land, which was up by an average of 17% nationally from €9,381 to €10,962/ac.

Sales activity was boosted by strong demand, low supply of land and the easing of Covid-19 restrictions

land price
Source: SCSI/Teagasc

The price of all non-residential land, on holdings of less than 50ac also showed significant increases.

In Munster prices were up 14%, in Leinster they rose by 12% while the increase in Connacht/Ulster was 5%.

Source: SCSI/Teagasc

The average price for poor-quality land dropped from €5,900 to €5,308/ac last year, a fall of 10%.

The survey outlines that this decline can be attributed to price developments for larger parcels of poor land in Munster and in some parts of Connacht/Ulster.

Source: SCSI/Teagasc

The survey shows that demand for rented ground remains strong with rents this year expected to rise by 10% nationally.

Agents expect rents to increase by 12% in Leinster and by 9% in Munster and Connacht/Ulster.

The strongest rental growth figures last year were reported in Leinster with prices for silage, grazing, potatoes, and other crops rising by between 18% and 29%.

County-by-county

In 2021, Kildare retained its position as having the most expensive land in the country at €15,350/ac for good land on holdings less than 50ac. This is up from €13,600 in 2020, an increase of 13%.

Cork has jumped into second place on €15,070/ac; followed by Louth on €14,500/ac; Meath with €14,230/ac; and Tipperary on €14,000.

Source: SCSI/Teagasc

In Leinster, average prices for good land on less than 50ac ranged from Kildare at €15,350/ac to €11,600/ac in Offaly.

The prices for poor-quality ground ranged from a high of €9,125/ac in Louth to €4,967/ac in Longford.

The survey stated that dairy farmers are continuing to drive the market in Munster.

Prices for good land ranged from €15,070/ac in Cork to €9,800/ac in Clare, while poorer quality land spanned an average of €7,700/ac in Cork to €3,500/ac in Clare.

In Connacht/Ulster prices for good land ranged from an average of €13,375/ac in Donegal to €5,025/ac in Leitrim.

For poor land, the top average was in Monaghan and Cavan at €5,250/ac, while it was €2,760/ac in Leitrim, the lowest price in the country for holdings under 50ac.

Sales volumes

James Lee, chair of the SCSI’s Rural Agency Committee, noted that 53% of agents who took part in the survey reported an increase in the volume of land sold compared to the previous year.

“Two thirds of valuers reported an increase in the percentage of valuation requests for the transfer of land. This is up from 43% in 2020. These are positive trends and show confidence in the market from sellers and buyers.”

There was also greater interest in dwellings on smaller holdings as more people are working from home.

“It’s worth noting that typically residential farms of less than 50 acres are around 20% more expensive than non-residential farms of similar size,” Lee said.

provisions

Teagasc economist Dr. Jason Loughrey said that inflationary price pressures, which were identified in last year’s report, have since sharpened.

“2022 is likely to be remembered for significant increases in commodity prices and general inflation.

“The cost of fuel, fertiliser and feed began to rise last year and now following the invasion of Ukraine, the rate of these cost increases has escalated dramatically with production costs in 2022 set to be much higher.

“There are positive developments on the output side, with significantly higher grain, dairy and meat prices now likely in 2022 than would have been forecast even two months ago.

“The key and worrying question for farmers is, will higher farm output prices cover their higher input costs this year?

“Will the current situation in Ukraine have an impact on land prices? It will come down to the duration and overall economic impact as well as the specific impact on input costs and the profitability of the farming sector in Ireland.

“But if viability and cashflow issues are exacerbated throughout the remainder of 2022 and beyond, it could impact on the prices paid for agricultural land,” Dr. Loughrey concluded.