Land prices continued to soar in 2022
The Real Estate Alliance (REA) National Farm Property survey for 2022 saw a jump of 23% on the per-acre price paid for land with an average of €13,725/acre paid in 2022 compared with €11,188/acre last year. While the amount of land sold by REA agents went up by 6%, the amount of money generated by these sales increased by 30% on 2021 figures with a total of 2,045 acres of land generating over €28m.
The survey is based on the farm property sales of 20 REA agents throughout the country involving the disposal of 75 properties in 90 individual lots.
Among other findings the survey shows farmers made up the vast majority of buyers and 64% of land purchases were funded out of cash reserves. Only 36% of buyers needed to borrow to fund or part-fund their purchases.
Local farmers made up almost 59% of those buying agricultural ground. When farmers from outside the area along with small holders or small organic farmers are included the percentage of farmer buyers rises to almost 66%.
While dairy farmers might have been the main drivers of land sales, little or no operational dairy land came on the market.
Properties achieving prices of €200,000 or less made up 47% of farms sold while properties between €200,000 and €400,000 accounted for 21% of the market. Farms that generated between €400,000 and €750,000 made up 18% of holdings sold while farms ranging between €750,000 and €1m made up 9% of sales.
The average size of holding sold in 2022 increased from 18 acres to 27 acres. The number of holdings sold went down from 105 in 2021 to 75 in 2022. The survey also shows that the smaller parcel continues to be the backbone of the land market with 90% of sales involved holdings of 50 acres or less.
Nenagh auctioneer Eoin Dillon, REA Dillon, said he had an incredible number of disappointed underbidders in 2022 and demand far exceeded supply. “These people had all their work done, their money was in place and on the day they didn’t succeed. They are still out there looking for land. Prices of €15,000/acre to €17,500/acre became the new norm compared to €10,000/acre to €15,000/acre in 2021.”
Probate and those selling land to fund retirement accounted for the majority of his farm sales.
James Lee of REA John Lee Newport said that all expectations in terms of price were surpassed in 2022. “Recently I guided a 34-acre property at €200,000 and it sold for €275,000 and that was typical,” he said. “And last October, I sold 45 acres on the outskirts of Newport for €552,000 or €12,500/acre.”
He predicts an even stronger market this year due to the shortage of supply.
Roscrea auctioneer Seamus Browne, REA Seamus Browne, said: “Demand outstripped supply of land in 2022 and although a hike in interest rates may have a dampening effect, he feels the outlook for sales and rental of land in 2023 remains very positive.”