Scarce land supply and buoyant dairy farmer demand are expected to push average land sale prices up 8% this year, according to the Society of Chartered Surveyors Ireland (SCSI) and Teagasc report.

Auctioneer estimates put Connacht/Ulster slightly ahead of this figure, Munster in line with the average and Leinster slightly behind it.

These increases follow the average value of good-quality land rising to €11,172/ac last year, up 2% on the average paid in 2021.

Poorer-quality land offerings unsuitable for tillage made an average of €5,564/ac over the year, a rise of 5%.

The most expensive counties for buying land in 2022 were Kildare, Meath and Waterford, the SCSI/Teagasc report states.

Land classed as good-quality averaged €15,000/ac or more in all three counties.

Poor-quality land came to an average of €2,866/ac in Co Mayo – the lowest average land price recorded for any county in the report.

Only around 0.5% of land is put on the market each year and no major changes were anticipated for 2023 in the report, despite the expectations of strong dairy sector demand.

It also indicated that farmers last year had looked to land purchases as a means of avoiding cash reserves being eaten into by high levels of inflation.

SCSI’s rural agency committee chair Peter Murtagh pointed to dairy demand as the main driver of prices in his commentary on the report.

“Last year was also a good year for tillage farmers and Leinster-based auctioneers and valuers in our survey say demand for good arable land or land close to any sizeable dairy farms attracted strong interest and competitive bidding,” said Murtagh.

“That demand is also reflected in strong price growth in the dairy heartland of Munster where agents say one of the main drivers of the market was a heightened interest from individuals with their own funds looking to invest in land and guard against the effects of general inflation.”