Estate agency group Real Estate Alliance has released its findings for the last six months for the land sales sector, with figures showing it was one of the most buoyant in the property market in 2012.
In total REA agents sold more than €10 million worth of land in the second half of last year.
According to Board member John Dawson of REA Dawson: “Farming land has proved to be quite valuable in 2012. With increasing sale and rental prices nationwide it is no surprise those fortunate enough to own land are reporting a good year in the sale of their properties despite the fact it has been a poor year farming wise.
“The price of good arable agricultural land has improved in 2012 by as much as €1,000 to €1,500 per acre. This was mainly due to the scarcity of good quality land for sale over the last four years and for the first time, one can see an increase in the acreage for sale of both good residential and non residential lands.
“In the Carlow area, in the past three months, we have disposed of six farms varying in size from 25 acres to 161 acres with an average price ranging from €8,000 to €11,500 with smaller parcels of arable land between five and 10 acres fetching as high as €16,000 per acre.”
Mr. Dawson continued: “With increasing sale prices nationwide, it is no surprise those fortunate enough to own land are reporting a good year in the sale of their properties, despite the fact it has been a most difficult year overall farming wise due mainly to the very wet summer and autumn.”
Agricultural lettings for the coming season 2013 are maintaining last year’s prices again, due mainly to the scarcity of fresh land for letting on the open market as substantial acreages are now tied up in long-term leases.
Land sales performed well in 2012, with improved demand for well-situated holdings with good road frontage.
The average size of farms being sold is 30-50 acres, although greatest demand is for small ‘pockets’ of land with building potential.
According to Real Estate Alliance members, the cost of an acre now varies between €7,000 and €10,000 per acre – with some parcels fetching up to €12,000 per acre.
Despite the difficult year for farming, dairy farms are selling well. According to Thomas Potterton of REA TE Potterton in Trim: “The milk quotas are disappearing in 2014/2015, and it is going to help the sector. It looks promising.”
The rental market is particularly buoyant and has experienced price increases of 10 per cent, largely due to the scarcity of land.
Rental costs of tillage land have also climbed slightly this year across the country.
In 2012, an acre of tillage land could be rented for an average of €180 to €220 per annum and grazing is circa €170 to €200 per acre.
Letting sales is buoyant due to a lack of availability and scarcity, as many lettings are tied up with long term letting agreements, which have an attractiveness of having tax incentives if the land is leased for five years or more.
According to John Dawson of REA Dawson in Tullow: “We are optimistic that the small growth experienced in this sector will be met by an small increase in the value of grazing land in 2013.
“Land still measures very favourably with other forms of investment and we can expect a healthy increase on farm land sales and letting prices over 2013.
Recently appointed Chairperson of Real Estate Alliance, Harry Sothern said: “The increase in both the sale and rental prices of land has made farming land a particularly sound investment at present. If trends continue in 2013 we would expect the value of land to climb even further.”