Recently published figures from the Central Statistics Office (CSO) show that the volume of land sales in 2016 plunged by more than a third (-37%) to just under 34,000 acres. This is a sharp decline in the volume of land sales throughout the country when compared to the 53,900 acres sold in 2015 and the 56,300 acres sold in 2014.
The sharpest declines in the volume of land sales were recorded in the southern half of the country. In the southeast (Carlow, Kilkenny, Tipperary South, Waterford and Wexford), land sales fell by a massive 55% to just over 3,500 acres.
There was also a sharp decline in the southwest (Cork and Kerry), where land sales in 2016 fell 44% to just 3,675 acres. In the midwest region (Clare, Limerick and Tipperary North), land sales were down 42% to just 2,900 acres.
Falling transactions
The decline in the volume of land sold in 2016 is understandably matched by a similar decline (-35%) in the number of land transactions during the year to 1,719. This is much lower than the 2,650 transactions in 2015 and the almost 3,100 transactions in 2014.
The total value of land sold in 2016 equated to €193.3m according to the CSO, which is down 40% compared to the €321m spent on land in 2015 and 48% on the €371m spent in 2014.
The dramatic fall in the volume of land sales for 2016 is due to a number of reasons. Firstly, many auctioneers and selling agents reported to the Irish Farmers Journal for the 2016 Land Report that there was a severe shortage of stock in the market.
However, figures compiled by the Irish Farmers Journal show that the amount of land offered for sale was only down by 1.1% on the previous year. A total of 73,778 acres arrived on the market in 2016, only marginally down from the 74,629 acres that were offered for sale in 2015.
While the availability of land held up during the year, what certainly affected the number of deals done in 2016 was access to finance. During the course of the year, a significant number of agents expressed concern about the auction room, citing the relatively short time frame to allow potential buyers get their finances in order as a barrier to bidding at auction.
Anecdotal evidence also suggests that while many farmers were eager to buy at auction, they either hadn’t got the clearance from the bank to go ahead or they only had permission to bid up to a certain threshold, both of which limited their chances of securing a sale.
It was clear though that there was still a steady appetite (but a slightly more cautious one) from farmers to buy land in most parts of the country. However, for some, the goalposts had moved when it came to price – the amount of money that farmers could offer, or were willing to spend, had notably tightened.
On the selling side of the market in 2016, auctioneers reported to the Irish Farmers Journal that the difficult farming climate and weak farmgate prices for milk, beef and grain were influencing sellers, with a number of sales and auction postponed.
A number of selling agents noted vendors who pulled the plug at the last minute before a sale. Some of these property owners will likely have went to the market in 2017 after milk prices rallied strongly. Others will have taken the attractive option and entered a long-term lease arrangement.
Median land price
While the CSO figures reveal a sharp decline in the volume of land sold in 2016, selling prices were more resilient, albeit still down year on year. The CSO puts the national median price paid for land in Ireland in 2016 at €6,366/acre, which is down 4.2% on the previous year.
Based on the CSO figures, 2016 marks the fourth consecutive year of a decline in the national median land price in Ireland. Average land prices have now declined a cumulative 8.5% since 2013, when the CSO figures show national median prices were at €6,953/acre.
The CSO reports that the national median price for arable farmland in Ireland in 2016 stood at €10,025/acre, which was down almost 3% compared to the previous year. Arable land sales accounted for just 7% of all land transactions in Ireland in 2016.
The national median price for permanent grassland was back just 2% to a little under €6,250/acre. Grassland sales account for 93% of all land sold in Ireland for 2016.
About the CSO land data
The CSO is able to collate an accurate picture of the Irish land market because it has access to a huge volume of land sales information not made available to the public. This includes access to stamp duty figures from Revenue, as well as data from the Property Registration Authority of Ireland, An Post Geo Directory and the Census of Agriculture 2010.
However, given the method used by the CSO to collate data, it can take a significant amount of time to pull all the appropriate information into one place, meaning that the release date for statistics is significantly prolonged. The land price data for 2016 was only released in late 2017.
Resumed analysis
Since 2013, the CSO has recommenced recording information about the Irish agricultural land market. The CSO stopped recording land price data in 2005, a time when land prices were reaching peak levels. Back then, an upper threshold of €35,000/ha (€14,100/acre) was imposed, meaning that any land sold above this level was omitted from the CSO analysis as it was deemed non-agricultural.
However, a significant amount of agricultural land at the time was fetching €15,000/acre and more, driven by the extensive purchasing power of non-farming buyers. These critical omissions likely skewed the CSO figures and failed to reflect what was really happening on the ground during the boom years.
Having stopped recording land price data in 2005, the CSO recommenced land data recording in 2013, using the following exclusions.
Transactions for non-agricultural purposes eg lifestyle buyers, construction sites, forestry. The sale or gift of land to charities/ sporting bodies. An inheritance transfer to a spouse etc. Commonage. Land sold with a dwelling or building. Land sold with entitlements. Properties sold for less than €100. Any agricultural parcel comprising one acre upwards is included in the current round of analysis and there is no upper price threshold. Also, any land holding with a residence or building is excluded from the analysis, which means that the results reflect the true price of bare land in this country.
In 2016, the CSO used a total of 1,719 transactions to calculate the average value of land in each region. This is a phenomenal number of transactions and allows for hugely reliable results.
The median price of land, which is used by the CSO, is the exact middle value when all the transactions are sorted in order of price per acre. The CSO claims that by taking the median value, the final figures are less likely to be skewed by the inclusion of extremely large or extremely small values, thereby giving a better idea of the typical price of land in Ireland.
The CSO gives a breakdown of land values on a national and regional basis. Leaving Dublin aside, it divides the country into seven clear regions.
Difference between the CSO and Land Report
The Irish Farmers Journal Land Price Report uses the average of averages to calculate its price of land per acre in Ireland. The CSO uses the median figure, which refers to the exact middle figure of all the relevant transactions collected. For this reason, both are different but very relevant.
The CSO also include parcels under 10 acres and over one acre with no upper price threshold limit. The Land Report only includes parcels over 10 acres, with certain exceptions, so smaller parcels with high prices for very small acreage will not distort figures. Another notable difference between both sources of information is the CSO excludes any land holding with a residence or building from the analysis. The Land Report included residential holdings in their analysis, though every step is taken to ensure the true reflection of land is recognised.
Recently published figures from the Central Statistics Office (CSO) show that the volume of land sales in 2016 plunged by more than a third (-37%) to just under 34,000 acres. This is a sharp decline in the volume of land sales throughout the country when compared to the 53,900 acres sold in 2015 and the 56,300 acres sold in 2014.
The sharpest declines in the volume of land sales were recorded in the southern half of the country. In the southeast (Carlow, Kilkenny, Tipperary South, Waterford and Wexford), land sales fell by a massive 55% to just over 3,500 acres.
There was also a sharp decline in the southwest (Cork and Kerry), where land sales in 2016 fell 44% to just 3,675 acres. In the midwest region (Clare, Limerick and Tipperary North), land sales were down 42% to just 2,900 acres.
Falling transactions
The decline in the volume of land sold in 2016 is understandably matched by a similar decline (-35%) in the number of land transactions during the year to 1,719. This is much lower than the 2,650 transactions in 2015 and the almost 3,100 transactions in 2014.
The total value of land sold in 2016 equated to €193.3m according to the CSO, which is down 40% compared to the €321m spent on land in 2015 and 48% on the €371m spent in 2014.
The dramatic fall in the volume of land sales for 2016 is due to a number of reasons. Firstly, many auctioneers and selling agents reported to the Irish Farmers Journal for the 2016 Land Report that there was a severe shortage of stock in the market.
However, figures compiled by the Irish Farmers Journal show that the amount of land offered for sale was only down by 1.1% on the previous year. A total of 73,778 acres arrived on the market in 2016, only marginally down from the 74,629 acres that were offered for sale in 2015.
While the availability of land held up during the year, what certainly affected the number of deals done in 2016 was access to finance. During the course of the year, a significant number of agents expressed concern about the auction room, citing the relatively short time frame to allow potential buyers get their finances in order as a barrier to bidding at auction.
Anecdotal evidence also suggests that while many farmers were eager to buy at auction, they either hadn’t got the clearance from the bank to go ahead or they only had permission to bid up to a certain threshold, both of which limited their chances of securing a sale.
It was clear though that there was still a steady appetite (but a slightly more cautious one) from farmers to buy land in most parts of the country. However, for some, the goalposts had moved when it came to price – the amount of money that farmers could offer, or were willing to spend, had notably tightened.
On the selling side of the market in 2016, auctioneers reported to the Irish Farmers Journal that the difficult farming climate and weak farmgate prices for milk, beef and grain were influencing sellers, with a number of sales and auction postponed.
A number of selling agents noted vendors who pulled the plug at the last minute before a sale. Some of these property owners will likely have went to the market in 2017 after milk prices rallied strongly. Others will have taken the attractive option and entered a long-term lease arrangement.
Median land price
While the CSO figures reveal a sharp decline in the volume of land sold in 2016, selling prices were more resilient, albeit still down year on year. The CSO puts the national median price paid for land in Ireland in 2016 at €6,366/acre, which is down 4.2% on the previous year.
Based on the CSO figures, 2016 marks the fourth consecutive year of a decline in the national median land price in Ireland. Average land prices have now declined a cumulative 8.5% since 2013, when the CSO figures show national median prices were at €6,953/acre.
The CSO reports that the national median price for arable farmland in Ireland in 2016 stood at €10,025/acre, which was down almost 3% compared to the previous year. Arable land sales accounted for just 7% of all land transactions in Ireland in 2016.
The national median price for permanent grassland was back just 2% to a little under €6,250/acre. Grassland sales account for 93% of all land sold in Ireland for 2016.
About the CSO land data
The CSO is able to collate an accurate picture of the Irish land market because it has access to a huge volume of land sales information not made available to the public. This includes access to stamp duty figures from Revenue, as well as data from the Property Registration Authority of Ireland, An Post Geo Directory and the Census of Agriculture 2010.
However, given the method used by the CSO to collate data, it can take a significant amount of time to pull all the appropriate information into one place, meaning that the release date for statistics is significantly prolonged. The land price data for 2016 was only released in late 2017.
Resumed analysis
Since 2013, the CSO has recommenced recording information about the Irish agricultural land market. The CSO stopped recording land price data in 2005, a time when land prices were reaching peak levels. Back then, an upper threshold of €35,000/ha (€14,100/acre) was imposed, meaning that any land sold above this level was omitted from the CSO analysis as it was deemed non-agricultural.
However, a significant amount of agricultural land at the time was fetching €15,000/acre and more, driven by the extensive purchasing power of non-farming buyers. These critical omissions likely skewed the CSO figures and failed to reflect what was really happening on the ground during the boom years.
Having stopped recording land price data in 2005, the CSO recommenced land data recording in 2013, using the following exclusions.
Transactions for non-agricultural purposes eg lifestyle buyers, construction sites, forestry. The sale or gift of land to charities/ sporting bodies. An inheritance transfer to a spouse etc. Commonage. Land sold with a dwelling or building. Land sold with entitlements. Properties sold for less than €100. Any agricultural parcel comprising one acre upwards is included in the current round of analysis and there is no upper price threshold. Also, any land holding with a residence or building is excluded from the analysis, which means that the results reflect the true price of bare land in this country.
In 2016, the CSO used a total of 1,719 transactions to calculate the average value of land in each region. This is a phenomenal number of transactions and allows for hugely reliable results.
The median price of land, which is used by the CSO, is the exact middle value when all the transactions are sorted in order of price per acre. The CSO claims that by taking the median value, the final figures are less likely to be skewed by the inclusion of extremely large or extremely small values, thereby giving a better idea of the typical price of land in Ireland.
The CSO gives a breakdown of land values on a national and regional basis. Leaving Dublin aside, it divides the country into seven clear regions.
Difference between the CSO and Land Report
The Irish Farmers Journal Land Price Report uses the average of averages to calculate its price of land per acre in Ireland. The CSO uses the median figure, which refers to the exact middle figure of all the relevant transactions collected. For this reason, both are different but very relevant.
The CSO also include parcels under 10 acres and over one acre with no upper price threshold limit. The Land Report only includes parcels over 10 acres, with certain exceptions, so smaller parcels with high prices for very small acreage will not distort figures. Another notable difference between both sources of information is the CSO excludes any land holding with a residence or building from the analysis. The Land Report included residential holdings in their analysis, though every step is taken to ensure the true reflection of land is recognised.
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