Limited land supplies hitting the market at a time of buoyant dairy farmer demand could push land prices up 8% this year, according to a Society of Chartered Surveyors Ireland (SCSI) and Teagasc report.
The increase would follow on from the average value of good-quality land rising 2% to €11,172/ac in 2022.
Poorer-quality land offerings unsuitable for tillage made an average of €5,564/ac last 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.
Rental even stronger
SCSI and Teagasc predict land rental costs to increase by 14% over 2023 – even more than the jump in land sale values.
Munster is expected to lead the charge in land rental values, with an anticipated 17% increase in prices on top of an average rise of 13% last year to €241/ac for grazing.
Strong growth of 15% is expected in Leinster’s land rental market, but Connacht and Ulster counties are forecast to see values rise by only 10%.
These increases would mean average prices of €305/ac being paid for silage ground in Leinster and Munster and around €195/ac being paid in Connacht.
The respective rental prices for grazing would reach €285/ac, €282/ac and €178/ac in Leinster, Munster and Connacht if the forecasts play out in the market.
Dairy and inflation driving buyers
SCSI’s rural agency committee chair Peter Murtagh pointed to dairy demand as the main driver of prices.
“Eighty-three percent of agents in our survey believe there is likely to be an increase in demand from dairy farmers to purchase farmland in 2023 and they are continually ranked throughout the survey as being the most likely purchasers of land across the country,” Murtagh said.
“We’d expect the impact on sales and rental prices will be more acute in regions where dairy is the dominant farm enterprise and where stocking rates are higher.”
The report also indicated that farmers may be looking to land purchases as a means of avoiding cash reserves being eaten by inflation.
“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,” Murtagh continued.
“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.”
