The market for hill land and marginal grazing ground has rocketed, with record purchase prices being paid for properties.
Increased CAP payments and a sharp fall-off in available properties, due to long-term leasing, has pushed the market into overdrive.
Westport auctioneer Olivia Needham described the market for hill land, both to lease and purchase, as “red hot”.
She currently has two 68ac sections of commonage near Westport for sale and is quoting a reserve of €93,500 for each. That equates to €1,375/ac.
Similar quality land would have made €650/ac to €700/ac around five years ago.
Bare land
Ballina auctioneer Billy Heffron said commonage can’t be got to lease or buy. The small number of holdings that are coming up to rent are making €110/ac to €120/ac for bare land.
“You can’t get hill land to lease. If I had 1,000ac at the moment I could lease it or sell it,” Heffron maintained.
Meanwhile, Charlestown auctioneer Brendan Kenny is quoting a lease price of €30,000/year for a 158ac holding near Westport, which has entitlements worth around €16,000. The lease price equates to €189/ac. Kenny has had strong demand from farmers in Galway, Mayo and Sligo.
The higher CAP payments available on hill land is a major factor in the increased level or demand, Heffron and Needham admitted, and this has been exacerbated by a fall-off in supply due to more ground going into long-term leases.
Northern Ireland
While active sheep farmers, young trained farmers and investors are her main customers for hill land, Needham said she has queries from Northern Irish farmers for commonage because of the higher payments now available.
The maximum payment of €25,000 for 50ha, which is available to young trained farmers, continues to put a floor on the market for hill farms.
The higher direct payments on hill land due to convergence have also added to the upward pressure on prices, the auctioneers said.
Similarly, the organic scheme has added fuel to the fire where lands are privately owned and enclosed. The scheme pays €250/ac to €300/ha for the first 70ha and €30/ha thereafter.
This equates to €15,000 on a 50ha holding over the first two years.
Acute shortage of good-quality land is driving the market
Letting prices for lowland farms have tracked those of upland properties to reach a new high this year, Billy Heffron claimed.
He said an acute shortage of good-quality properties to let is driving the market.
“Normally, I’d have 20 to 25 lots to let this time of the year; this year I had 10,” Heffron said.
He maintained that the base price for “medium-quality land” was now €250/ac, with in excess of €300/ac being paid for good-quality farms with housing.
“I leased a 60ac farm last year for €10,000. I’m now getting €20,000 for the same place,” he maintained.
The former dairy farm has no entitlements but has housing for 100 head. The new rental price equates to €330/ac.
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