Improved buyer sentiment results in 0.9% growth in agricultural land values in the opening quarter, bringing annual growth to 2.2%
Agricultural land values have increased by 0.9% in the opening quarter of 2018, according to the latest analysis by Sherry FitzGerald Research. This brings the annual growth rate in the twelve months to the end March 2018 to 2.2%. As such the average price of farmland now stands at approximately €9,700 per acre. Values have increased in all regions, excluding the West in the year.
Commenting on the overall market, Roseanne De Vere Hunt, Head of Sherry FitzGerald Country Homes, Farms and Estates, said, “2018 looks set to be an interesting year in the agricultural land market. While buyer sentiment has improved and prices have strengthened, this trend could be destabilised as the Brexit headwinds continue to intensify.”
Notably both grassland and arable land enjoyed prices increase in the quarter. The average price of prime grassland grew by 0.7% in the quarter, while marginal grassland grew by 0.8%. Likewise, prime arable farmland rose by 1.2%. As such, the average price of prime arable farmland nationally stood at approximately €11,650 at the end of the first quarter of the year.
The South-East observed the strongest growth in the quarter, with the average price of farmland in the region increasing by 1.4%. The South-West and the Mid-East trailed marginally, recording growth of 1.2% and 1.1% respectively. However annually, to Q1 2018, the Midlands has recorded the largest inflation of prices at 3.9%, followed by the South-West and the South-East, where growth equalled 3.2% and 3.1% respectively. Notably, the West was the only region where a decline in prices was recorded over the twelve-month period, with land values dropping by 0.8% year-on-year.
Following a stabilisation in early 2017, land values have now enjoyed three consecutive quarters of growth. Anecdotal evidence suggests that buyer sentiment continued its upwards trend in the quarter, following consistent improvements over the past year.
Correspondingly, agents have noted an improvement in activity within the land market. In recent times, banks have shown a greater willingness to finance farmers intent on increasing their holdings, who have clear and sustainable expansion plans.
However, supply appears to be constrained across all regions, with many agents noting decreased supply levels, not only in the three months to March, but over the past year. A shortage in the availability of land for leasing, given that much is tied in long-term leases, has been cited as a primary catalyst behind current land price growth.
For any further information, please contact:
Sherry FitzGerald Group
Ph: 01 237 6474
Roseanne De Vere Hunt
Sherry FitzGerald Country Homes, Farms and Estates
Ph: 01 237 6402
Director of Communication
Sherry FitzGerald Group
Ph: 086 252 3277
Note to Editors:
(1) Founded in 1982, Sherry FitzGerald has grown to become Ireland’s largest firm of estate agents with 97 owned and franchised branches throughout Ireland.
(2) The Sherry FitzGerald Agricultural Land Price Index is a quarterly index of price performance in the agricultural land market. The standardised price for each land type is based on the average price for the base period Quarter 4 2013. Values are based on actual sales, or likely achievable sales, in the given quarter.