Despite the challenges of Covid-19 and Brexit, land prices in 2020 have remained remarkably resilient throughout the country, according to the IPAV Farming Report, which was launched on Tuesday by Martin Heydon TD, Minister of State at the Department of Agriculture, Food and the Marine.
While volumes may be down arising from the pandemic, with some vendors holding off on selling, demand is particularly strong with notable interest from cash rich non-farmers chasing a better return than they would get elsewhere.
Pat Davitt, Chief Executive of IPAV (Institute of Professional Auctioneers & Valuers) said there are a number of factors driving demand.
“Some of these factors have been with us for some time, such as smaller farmers wishing to increase their holdings where neighbouring, usually small plots, come on the market; larger farms consuming smaller ones and continuing interest in land leasing, particularly by younger farmers who are not in a position to buy their own holdings.
“However, the newer factors include investors chasing a better return on their money, returning exiles and the normalisation in working from home. These latter factors in particular augur well for the future of rural residential holdings and land values. If they are sustained they will improve viability on smaller holdings with greater opportunities for off-farm income and will breathe new life into rural Ireland,” he said.
Mr Davitt said while the Covid-19 pandemic persists into 2021 it is likely to again impact the volume of land coming onto the market, at least in the first six months of the year. And he said the impact of Brexit remains to be seen but it will create new opportunities for many while other sectors will be adversely affected.
The age profile of Irish farmers is on the high side with about one-third over age 66. Leasing land long-term has become the only viable option in recent years for many young farmers hoping to run their own farms, he said.
“Last year’s increase in Stamp Duty to 7.5pc is an additional impediment for young, ambitious and educated farmers in attempting to buy holdings. We’re going to need such farmers to lead and drive new opportunities in the Green Economy.”
Some Highlights from the IPAV Farming Report
Tipperary region: Mid-sized quality grassland and tillage holdings securing €15,000 to €16,000 an acre with dairying being strong, as well as young farmers purchasing. Most lands coming for sale are either as a result of the death of the landowner or the land is being sold by a financial institution.
Westmeath region: Supply was better in the latter part of 2020. Good demand with limited supply for both forestry and tillage land. Increasing growth in poultry meat production. Average price per acre about €9,000.
Donegal region: A minimal supply saw quality land achieve up to €20,000 an acre for some small plots. Average prices for unbroken land were between €10,000 and €12,000 per acre with lesser quality land going for around €8,000 an acre and rural poor grazing land at about €3,000 an acre. Demand is good for farms up to 30 acres and up to values of €300,000, this is very attractive to local farmers. Demand is poor for land which is not suitable for forestry.