In IPAV’s Farm Report for last year, the group noted that some areas are achieving as much as €25,000/ac. However, some areas saw prices as low as €7,000/ac.
Land prices are now averaging €12,231/ac, up from €8,750/ac when the report began in 2016.
Land for leasing, which has experienced unprecedented demand, has seen prices rise to as much as €500/ac in some areas during 2022.
Pat Davitt, IPAV’s chief executive, said: “While farming sees new challenges each year, be it those arising from Brexit, climate change, or political volatility, it’s an incredibly resilient sector and has shown itself to be very adaptable.
“This year, changes taking place in the Common Agricultural Policy [CAP], in particular the non-clawback on single premiums, will be eagerly watched to see what impact it will have on prices,” Davitt added.
According to the IPAV chief executive, the Residential Zoned Land Tax (RZLT) is causing considerable worry for farmers with zoned land that is used for agricultural purposes.
“While we have serious reservations about this tax achieving its desired aim of incentivising the sale of land to someone who will develop homes…we would like to see a commitment by the Minister for Agriculture [Charlie McConalogue] to exclude farmland.”
Land involved in dairy farming was the top performer in 2022, with prices up over 50% for leased land in some parts of the country. In a number of cases, over €500/ac was achieved.
Around one-third of dairy farmers are currently looking to lease land, the report found.
In terms of the outlook for land prices, the coming year is “difficult to assess”, the IPAV report stated. However, it also says that “the fundamentals” are strong, including the domestic agriculture sector.
Key external factors are expected to play a significant role in land price performance for 2023.
These factors include a potential global recession, continued high inflation, increasing interest rates, the war in Ukraine, and the performance of the UK economy.
Sustainability pressures are also likely to be a factor, with the report stating that “the government is making it very clear that [it wants] to see a shift from livestock grazing towards tillage enterprises”.
According to IPAV, it is likely that the demand for farmland will continue to be very strong.
Demand for land to rent will continue to “far exceed” the supply of it.
Land prices will continue to increase with little or no relevance to the returns possible, but more as an opportunity for dairy farmers to comply with nitrate bands and regulations.
“No doubt, other new challenges will arrive in 2023. However, farmers are resilient bunch and no doubt will be well able to combat them,” the IPAV report stated.
