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Agricultural land prices averaged €9,500 nationally in the first half of 2017, according to Sherry FitzGerald’s land price index.
This was a 0.3% rise in the six months to June, and a sign of increasing confidence among buyers in the land market, according to the estate agent.
However, average land prices were 1.5% lower at the end of June this year, than they were at the same time in 2017.
The average value of farmland at the midpoint of 2016 was €9,650 per acre.
Prime arable land showed the largest price increase in the six-month period to June, rising by 0.8%, to stand at €11,400/ac.
Regional differences
Following three years where the land markets in the border counties were quite challenged, this region has recorded the biggest price rise in early 2017.
Average prices in the border counties increased by 1.8%, to stand at €9,200/ac in January to June 2017. This was particularly driven by increased demand from both tillage and dairy farmers.
The southeast and midwest regions followed, with price inflation of 1.1% and 1% recorded, respectively.
However, southeast land values remain 1.4% lower at the end of June on an annual basis, while positively, the midwest farmland values were 1.9% higher year on year.
Such encouraging signs were not witnessed everywhere. The southwest region, in particular, has seen notable fluctuating price trends over the past three years.
Following two years of price inflation in 2014 and 2015, land values stooped significantly in 2016, by 6.3%. The average price per acre in the southwest has, therefore, lost any ground gained during this time, stooping a further 1% in the six months to June 2017. It now averages €9,900/ac, bringing the annual decline to 3.7%.
Dairy boost
Milk prices are up year on year and dairy farmers have extra money to spend this year. Sherry Fitzgerald said this was evident in a lift in the price of leased land.
It could also feed into further land purchases towards the end of the year.
Farmers that have a dairy farm neighbouring, may expect an approach to lease further land from them and thus lead to a higher lease land price.
Brexit caution
Sherry Fitzgerald said that many farmers are cautious about purchasing further land this year due to Brexit and the uncertainty. They are also concerned about the long-term view and the reform of CAP in 2020.
Watch: 114 acres of quality comes to the market in Wicklow
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