FARMLAND prices have been decimated by four years of nationwide decline, a report out this week shows.
The Irish Farmers’ Journal Agricultural Land Price Report 2010 shows considerable regional variation, but average prices have fallen 57% nationally over the past four years.
In Dublin, the average of €13,233 per acre makes far more realistic reading than the Celtic Tiger highs of €35,000 in some prime land sales.
Prices fell a further 14.5% in 2010, and the report’s editor Shirley Busteed suggests that the floor has yet to be reached in national terms. The report makes good reading for those thinking of buying, not so good for those selling; certainly not for those who thought of selling in the boom years but hesitated.
Ms Busteed also qualifies the 2010 prices: "A significant amount of land that arrived on the market last year was of marginal quality and that had a big impact on price. Neighbouring farmers are generally the buyers of these parcels [...] Although not widespread, I did notice an increase in the number of pressure sales last year. Some of these included land that was part of NAMA but was being sold by a willing seller in a bid to pay off some of the debt."
Other downward price factors cited by the IFJ’s first ever 32-county guide include a lack of access to credit, the reduction in part-time farmer numbers, the abolition of REPS and the fact that deals are taking longer to conclude.
Some of the key statistics are as follows:
* The national average for 2010 is €8,741/acre — down almost 14.5% on the previous year.
* 41,339 acres were offered for sale in 2010.
* Dublin had the highest average at €13,233/acre followed by Kildare at €12,914/acre and Cork at €11,830/acre.
* Roscommon had the lowest average at €5,545/acre followed closely by Mayo at €5,555/acre and Offaly at €5,616/acre.
* Twenty-two of the 26 counties experienced a decrease in the average price of agricultural land.
* Offaly experienced the highest percentage drop at 42.6%, followed by Sligo at 34.1% and Louth at 33.4%.
* Cavan had the lowest percentage drop at 2.5%, followed by Waterford at 2.6% and Kildare at 6%.
* Only Carlow and Leitrim experienced price increases.
* The price gap between small and big farms has significantly narrowed.
* The average price for agricultural land in 2010 was £9,585/acre (€11,276/acre).
* Armagh recorded the highest average at £11,199/acre (€13,175/acre)
* Fermanagh had the lowest average at £7,638/acre (€8,986/acre).
* A total of 2,440 acres were recorded as sold in Northern Ireland last year.
Ms Busteed said: "A 57% drop in four years is significant. There are signs of the price levelling out in some counties, but there may be further falls in others. For instance, we previously used €10,000 per acre as a benchmark. The fact is that 21 out of 26 counties in the Republic had an average of less than that, so €10,000 is no longer really a useful benchmark. Some counties are struggling to make €8,000 an acre.
"That said, every sale is farm specific. Nobody wants to buy bad land, and only a certain number of buyers are willing to go beyond €10,000 an acre in many counties. Those who want premium land, with a good house and good road frontage, will be willing to a pay premium price for it. Others won’t.
"Even Cork, which had the third highest average sales in 2010, had a price range that ran from €5,500 to €19,000 per acre. It depends on the quality of each individual sale."
Landowners will also take some encouragement from the fact that the rate of price decline is certainly slowing down. Having fallen 35.6% on average in 2009, last year’s 14.5% fall seems less dramatic.
The IFJ survey examined 885 farms offered for sale in 2010. The biggest sale related to a 600-acre farm. The survey found that the demand largely matched the increase in supply.
Recent sales reported in the Irish Examiner include: €15,000 an acre for a farm at Baltovin, Ardfert, Co Kerry; €18,000 an acre for the 98-acre farm at Killahora House at Glounthaune, Co Cork; and about €10,000 an acre for a 35-acre holding at Crecora, Co Limerick.