Significant rise in agricultural land prices

Agricultural land prices increased by 7% nationally for the year 2012, reports Robert Ganly of Knight Frank Ireland, despite last year having been a very difficult one for farming due to the continued bad weather conditions, which impacted on farm incomes.

Agricultural land prices increased by 7% nationally for the year 2012, reports Robert Ganly of Knight Frank Ireland, despite last year having been a very difficult one for farming due to the continued bad weather conditions, which impacted on farm incomes.

The Southeast region, which covers counties Kilkenny, Wexford, Carlow and Waterford, recorded a higher than national average increase at 7%. The Knight Frank Ireland survey found that land rose to €10,408 per acre in the past 12 months from the 2011 average of €9,725 per acre, despite a small decrease in the small 20 to 49 acres category size holdings.

There were 30 sales in this region, plus a further three sales successfully completed but at undisclosed amounts.

In the smallest category of 20 to 49 acres, the average price was €9,935 per acre in 2012. In the previous year, 2011, the average price paid was somewhat higher at €10,487 per acre. In the 50 to 99 acres category, farmland sold for €10,468 per acre in 2012. The Knight Frank Ireland survey showed that this is a good increase from the average of €9,796 per acre the region in 2011. The average price paid in the 100 to 199 acres category was €10,567 per acre in 2012, again representing an increase from 2011, which saw an average price of €7,148 per acre being paid. There were no reported sales in the largest category of 200 plus acres.

This is the 20th annual survey commissioned by international property consultants Knight Frank Ireland, which is renowned as one of the country’s top specialists in farms, agricultural lands, stud farms, estates and country houses.

The Knight Frank Ireland 2012 survey findings were based on a total of 562 agricultural land properties advertised of which 209 sales were completed. However, the survey is based on 181 of these, as 28 sale prices were undisclosed and therefore could not be included.

Commenting on this latest agricultural land price survey, Robert Ganly, head of Residential & Country at Knight Frank Ireland, said that “it’s very positive news and the outlook is good. An increase of 5% in the national price of farmland is significant and very promising for our farming economy going forward”.

“Perhaps even more encouraging is the fact that this national increase took place in a year when we have endured such bad weather since the beginning of the summer, which has continued all winter, with a poor harvest and farmers now also concerned over their winter crop yields”.

“So an increase in the price of farmland over a poor year is indicative that land values will continue to strengthen. We are also finding that there are a lot of people out there with available money who are anxious to invest in land these days”.

Looking forward, Mr. Ganly believes that the outlook for agriculture land is good and predicts that there will be an increase in land values of around another 5% in 2013, particularly for large holdings. “Hopefully this positive trend will continue throughout this year and we’ll see a further strengthening of land values”.