The annual Land Price Report, available with today’s Irish Farmers Journal, has found that Westmeath land prices are stable.
The average value of land in Westmeath in 2018 was €7,729/ac, a 1.5% reduction from the 2017 average of €7,849/ac.
Prices for farms under 40 acres (€8,065/ac) commanded higher value in 2018 compared with the average price of properties over 40 acres (€7,336/ac).
In terms of supply, a total of 3,837 acres, incorporating 81 farms, were offered to the market in 2018, well down on the 5,120 acres supplied to the market in 2016.
The price of land in Westmeath has been consistent since 2014, with average prices wavering between €7,000/ac and €8,000/ac
The average price of land in Ireland was €9,072/ac in 2018, down just 0.18% on 2017.
The report states that, nationally, business people are buying almost 25% of the land in Ireland, and driving competition among farmers for land – but only 45% of the land offered for sale was sold.
ROI Land prices are steady in Ireland pre-Brexit:
• The average price of land was €9,072/ac in 2018, down just 0.18% on 2017.
• However, supply of land to the market was down 11% with extreme weather events, poor beef prices and Brexit hitting home.
• Only 45% of the land offered to the market was sold in 2018
• €305m: The total value of land transactions in the Republic of Ireland in 2018 (down from €313m in 2017)
Reduced supply/Impact of weather:
• 70,246 acres were brought to the market in 2018, down 11% (8,100 acres).
• The difficult weather conditions were a significant factor in this decline with a harsh spring (fodder crisis/snow) holding back land coming to the market.
• The summer drought that followed had more of an impact on demand as land became a secondary priority, especially in dairy-dominated areas.
• A struggling beef sector was als• noted by most auctioneers as the main reason for a reduction in demand in the West and parts of the Midlands.
Business people adding to competition for land:
• For the first time, we give a breakdown of who is buying Ireland’s land.
• Business people are paying top dollar for land, with the average price paid over €12,000/ac
• Over 17% of land parcels sold in 2018 were bought by those with business interests and the average prices showed the lengths to which those with business interests were willing to go.
• Cork example: In Douglas, County Cork, it is understood a company from the west of Ireland bought a 101-acre farm for €5.8m or €58,000/ac.
• Dublin example: a 180-acre land bank sold in Lucan for €9m or €50,000/ac to a business buyer.
• Tipperary: Coolmore are known to be buying up land across Tipperary and they purchased Bengurragh House in Cahir for €2.83m or €25,000/acre.
Price differentials by sector:
• Dairy farmers are paying almost €10,000/ac for land.
• Dairy farmers make up around 14% of the total number of farmers in Ireland, but they accounted for almost 23% of all purchases.
• Beef farmers are paying just €8,000/ac for land.
• There are 18,000 dairy farmers v 80,000 beef farmers in Ireland and despite this, beef farmers account for just 33% of land sales highlighting the financial disparity and spending power between both sectors.
• Tillage farmers are paying over €11,500/ac for land, making up 2.5% of sales.
• Tillage farmers are restricted by land quality and with the expansion of dairy farmers, many tillage farmers have no choice but to compete on price.
• The lucrative tax-free premiums for planted land are continuing to attract forestry buyers – both nationally and internationally.
• The average price of forestry land in Ireland in 2018 was just over €4,900/ac
• Leitrim had the highest percentage of forestry sales in 2018 with almost 20% of all land transactions in the county bought for forestry.
Price disparities between counties:
• Dublin had highest land price of €22,000/ac - speculators have re-entered the market in a major way.
• Leitrim had lowest land price at €5,222/ac. Interestingly, forestry contributed to 20% of land transactions in Leitrim.
• A vast number of agents attributed the upcoming UK withdrawal date from the EU as an inhibitor in the market.
• However, late last year, an increase in international buyers (particularly from the UK) began to re-enter the market in what auctioneers noted as a bid to invest money in the euro.
• The lower stamp duty levels in Ireland has also incentivised international buyers.
• The influence of Chinese buyers reduced over the course of 2018 due to softening of Chinese interests in the western economies.
How our land prices compare to the rest of Europe
• Netherlands: Most expensive farmland in Europe at over €26,000/ac.
• Italy: Farmland in Italy is the second most expensive at over €16,000/ac.
• UK: Sells for similar prices to Ireland at an average of €11,336/ac.
• At the lower end of the scale in Europe are counties in Eastern Europe such as Poland, Estonia, Lithuania, Bulgaria, Czech Republic and Romania where private ownership of land is still a relatively new concept following decades under communist rule.
• Romania: In Romania, some of the most fertile and productive lands in the world (black earth soils) can be bought for as little as €500/ac.
- Northern Ireland Land Price breaks £10k mark for first time (+4.4%)
• Uncertainty surrounding Brexit continues to have n• impact on the agricultural land market in Northern Ireland.
• The average price paid for agricultural land in Northern Ireland (NI) increased by £432/ac, or 4.4%, during 2018 to £10,182/ac.
11 REASONS LAND IS NOT SELLING:
1. No neighbours: Having interested farmers in the locality is the first step.
2. Unrealistic Expectations: Just because higher prices are seen in close proximity doesn’t mean the holding will make a similar price.
3. Brexit: Has caused uncertainty with reduced enquiries and demand for land.
4. Finance: The fodder crisis and subsequent drought, increased costs on farms during 2018.
5. Commodity Prices: A poor year for beef reduced profitability and sentiment.
6. Sentiment: There is a definite correlation between sentiment and land sales.
7. Quality: “Good land will sell” is typical phrase you will hear – farmers selling poorer-quality ground are at the mercy of interested neighbours.
8. Location: Areas with traditionally strong farmers and top quality land will more likely have a greater chance of selling.
9. Age demographic of farmers: A noticeable trend emerging is the correlation between the lack of young farmers and reduced sales in that area.
10. Size: There is always higher competition for smaller holdings under 40ac.
11. Weather: The extremities of last year’s weather conditions pushed up costs on Irish farms and reduced their ability to access finance and made purchasing land a secondary priority in some cases.