What did the experts say about each province in the IPAV farm report?

Last week, the Institute of Professional Auctioneers and Valuers (IPAV) released its Farming Report for 2019, which shows that the average price/ac of agricultural land in 2019 was between €8,800 and €9,000.

This research also demonstrated that values for the year remained flat in some areas, including mid-Leinster (counties Kildare, Meath, Carlow and Kilkenny) and mid-Munster (counties Tipperary and Limerick), while the remainder of the country experienced small decreases of up to 3%.

It was also found that long-term leasing is having “a real impact” on the volume of farmland coming up for sale, with the practice being attractive to both young and retiring farmers.

But how did auctioneers and agents explain these findings? The IPAV report included the opinions and commentary of some of its senior members in each of the four provinces.

This article will focus on Munster. Subsequent articles in the coming days will focus on the other provinces.

Tom Crosse

Tom Crosse, from GVM Auctioneers in Limerick, said that spring and early summer of 2019 were positive, with good levels of sales. However, this was subsequently tempered by a softening in the market for the second half of the year.

Crosse – who is also the chair of the IPAV’s Agricultural Committee – highlighted that primary demand came from large dairy operations.

A common thread across the country is the move towards long-term leasing. Prices of up to €300/ac for quality land were achieved. The big incentive for young farmers is not having to finance the purchase of the land.

In a year in which overall volumes of land sales in Munster increased by 10%, notable prices achieved were €23,000/ac for a small holding in Adare, Co. Limerick, which Crosse cites as a “very popular location”.

Also, a plot of “quality forest” achieved in the region of €5,000/ac.

Crosse spoke out against the increase in stamp duty – announced in Budget 2020 back in October – to 7.5%, saying that this was “excessive”.

John Hodnett

John Hodnett, from Hodnett Forde Property Services in Clonakilty, Co. Cork, said that demand was strong in his area. With dairy being the primary land use, prices were not adversely affected by the beef crisis, he highlighted.

Hodnett explained that values for grassland ranged from approximately €12,000/ac for a sub-50ac plot, with some smaller plots (ranging from 10ac to 15ac) going for between €20,000/ac to €22,000/ac.

Hodnett said that milk price was “key to the market holding up in west Cork”.

There was also strong demand among part-time farmers for smaller holdings of up to 30ac.

In terms of forestry, a large holding of 300ac went for €2,500/ac, while smaller holdings of less than 100ac went for up to €3,500/ac.

“Demand is strong for forestry; however, environmental issues and onerous regulations are complicating matters,” Hodnett explained.

Michael Brady

Michael Brady, from the Brady Group in Co. Cork, said that the supply of farmland was down in 2019, though values broadly held up.

He explained that it was clear in his view that the root cause of market issues were as a result of Brexit, with people simply holding off.

Brady added that he didn’t expect to see significant changes in land values in 2020, although supply may improve “as things become a little clearer across the water”.

In terms of letting, Brady said there is good demand, with prices for dairy grazing land as high as €375/ac, and prices for out-farms ranging from €225/ac to €275/ac.