SCSI auctioneers and valuers say that following strong price growth in 2021, particularly for good land, the price of agricultural land in general looks set to increase by 6% on average this year.
In a major new survey, chartered surveyors, auctioneers, and valuers, operating in the agricultural and rental markets, say sales activity was boosted by the exit from covid restrictions and they predict prices will continue to rise, underpinned by strong demand and a continuing low supply of land for sale.
The price of good land showed the biggest increase in 2021 - up by an average of 17% nationally from €9,381 to €10,962 per acre. The price of all non-residential land, on holdings of less than 50 acres, also showed significant increases. In Munster prices were up 14%, in Leinster they rose by 12% while the increase in Connacht / Ulster was 5%.
According to the Society of Chartered Surveyors Ireland/Teagasc Agricultural Land Market Review and Outlook Report 2022, average prices in Connacht/Ulster ranged from €13,375 per acre in Donegal for an acre of good, non-residential land under 50 acres – the highest in the region – to €5,025, in Leitrim. The average price of an acre of good quality land under 50 acres in Mayo was €8,580 - up slightly on the 2020 figure of €8,225.
The price for poor quality, non-residential land under 50 acres in the region ranged from an average of €5,250 per acre in Cavan and Monaghan - to €2,760, again in Leitrim.
The average price of an acre of poor-quality land on a small holding in Mayo was €3,590
While the average price of poor-quality land may be up on smaller holdings across the three regions, nationally, the average price for poor-quality land dropped from €5,900 in 2020 to €5,308 last year, a fall of 10%. This decline can be attributed to price developments for larger parcels of poor land in Munster and in some parts of Connacht / Ulster.
The report found the demand for rented ground remains strong with rents this year expected to rise by 10% nationally. Looking at the provincial picture, agents expect rents to rise by 9% in Connacht/Ulster and Munster and 12% in Leinster. The survey of 95 auctioneers and valuers from all over the country was conducted in February and March 2022.
James Lee, the Chair of the SCSI’s Rural Agency Committee, said the lifting of covid restrictions boosted sales activity and market confidence.
“In our survey 53% of SCSI agents reported an increase in the volume of land sold when compared to the previous year while 24% reported that the volume of land sold remained the same. In addition, 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
“As market demands strengthen, one trend which SCSI members are reporting is greater interest in dwellings on smaller holdings. One of the consequences of covid is that more and more people are now working from home and in many cases, seeking a better work life balance outside of large urban centres. 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.
“While we saw significant price changes in different counties and for various land types last year the overall market sentiment going forward remains positive. Agents anticipate an average increase in land values of 6% this year. This forecast is primarily based on the supply demand imbalance where an insufficient level of land is available for sale. This is particularly true with regard to dairy farmers who are looking to increase the size of their holdings.
“It’s a similar situation with regard to land rental prices, with the forecast increase for this year reflecting the tightening supply of rental land, particularly as land parcels continue to be tied up in longer-term leases.”
