Survey signals firming of land values in 2007

Agricultural land prices more or less stabilised in 2007, according to a national survey commissioned by Knight Frank, Dublin (formerly Knight Frank Ganly Walters). The survey signalled a decline in values in some parts of the country but emphasised that these decreases were modest when compared to the stark price rises of the past decade.

Nationally, the survey found that values declined by almost 2% giving a national average of €20,367/acre. This decline occurred right across the country but the most notable drop was found in Leinster. In the Dublin/Kildare/Wicklow region, prices dropped by 12%.

The survey also showed that the amount of agricultural land that actually sold last year dropped by 30%. This reflects the substantial number of withdrawals that were evident in the auction room throughout 2007.

Meanwhile, the average plot size increased from 54 acres in 2006 to 64.5 acres in 2007, reflecting the number of large farms that were offered for sale last year.

Overall, land near a town or village with road frontage commanded the better prices as did those with a residence, albeit a large period house or a derelict cottage.

Looking forward, the survey suggests that prospects for 2008 are promising. More farmers are expected to return to the market given the welcome lift in commodity prices in recent months. In addition, the supply of land is expected to be greater in 2008 and prices are likely to stablilise or decrease by a single digit percentage.

Dublin/Kildare/Wicklow

Not surprisingly, Dublin/Kildare/Wicklow recorded the highest regional average of €30,543/acre. The volume of land sold in this region was well down last year at just 427 acres compared to 1,696 acres in 2006.

Midlands: Meath, Westmeath, Offaly Longford, Laois

The Midlands featured 50 land sales - the most of all the regions. The average price was only slightly down on 2006 at €20,974/acre. The highest average of €22,413/acre was achieved in the 50 to 99-acre category.

Southwest: Cork, Tipperary, Kerry, Limerick

The average price in the southwest dropped from €21,936/acre in 2006 to €19,946/acre in 2007. The highest average was recorded in the 50 to 99-acre bracket at €26,933/acre followed by €26,003/acre in the 20 to 49-acre bracket. A number of properties that sold for top dollar close to Limerick city had a major bearing on the overall figure in both categories. In contrast, prices in the 100 to 199 category fell to €18,236/acre. It's thought the sale of a number of sizeable marginal quality farms brought down the average in this category.

Southeast: Wexford, Waterford, Carlow, Kilkenny

The average price paid for agricultural land in the southeast was €20,738/acre - down €1,555/acre on 2006. The highest average at €23,874/acre was recorded for smaller parcels of 20 to 49 acres.

Northwest/West: Connacht plus Clare and Donegal

Average prices for 2007 increased by €1,206/acre in the northwest/west region to €15,293/acre. The amount of land sold in this region remained unchanged at 1,222 acres. The highest price increase was recorded in the 50-99-acre category at €17,405/acre.

Northeast: Louth, Cavan, Monaghan

Less land was offered for sale in 2007 in the northeast region when compared to 2006. As a result, prices increased by €1,884/acre to average €25,245/acre. The highest price increase occurred in the smaller holdings of 20 to 49 acres which averaged €33,060/acre.

Points to note:

The Knight Frank survey was compiled from farm sales as reported in national newspapers.

Parcels under 20 acres were deliberately excluded unless it specifically stated that the land was bought by a farmer.

A cut off of €35,000/acre was used for all regions with the exception of Dublin, Kildare and Wicklow, where the cut off point was €70,000/acre. Land above these thresholds was deemed to have been bought for non-farming use.

The Dublin/Kildare/Wicklow region was analysed separately and averaged €30,543/acre.

Average land values across six regions in 2007

Region	Dublin/Kildare Wicklow	Midlands	Southwest	Southeast	Northwest/ West	Northeast
Average	€30,543/acre	€20,974	€19,946	€20,738	€15,293	€25,245
Up/down on 2006	Down	Down	Down	Down	Up	Up