Values in the Irish agricultural land market grew robustly in the final quarter of 2020, following a turbulent twelve months. The market saw a great variance in values in 2020, with contrasting forces exerting pressure on values at different times. Deflationary pressures stemming from 2019 saw values decline in the opening part of the year, before the outbreak of COVID-19 impacted the market. COVID-19 restricted sales activity, limiting price movements. The easing of restrictions later in the year led to strongest rate of quarterly growth in quarter four in over five years, as the combination of depleted supply and pent-up demand raised agricultural land values.
For the year in full there was little movement in prices with the inflationary and deflationary forces at the differing ends of the year largely counteracting each other. Overall, agricultural land values decreased 0.2% in 2020, according to the Sherry FitzGerald Agricultural Land Barometer. As such, the weighted average price of farmland in Ireland, excluding Dublin, was approximately €8,850 per acre at the end of 2020.
Agricultural land values fell about 3% in 2019, as poor sentiment impacted on the market. This decrease continued into 2020, with values declining further at the start of the year. However, the outbreak of COVID-19 and the subsequent health restrictions implemented to curb its spread effectively paused the market, with values holding firm due to the limited number of transactions.
The easing of restrictions led to strong price growth, as depleted stock levels and pent-up demand raised values, mirroring developments in the residential market. Values increased by 1% in quarter four, the strongest rate of quarterly growth since 2015. Agents noted that along with the pick-up in activity in quarter four, there was also a notable improvement in buyer sentiment, in particular to what had been seen earlier in 2020 and much of 2019. The increase in prices at the end of the year was evident across much of the country with the Midlands, Mid-West and South-East recording growth of 2.1%, 1.9% and 1.6% respectively. At the end of the year values remained highest in the Mid-East at approximately €10,700 per acre.
In terms of price performance, grassland slightly outperformed arable land over the course of the year. Prime grassland values increased by 0.7% in 2020, while in comparison, prime arable values fell by 1.1%. At the end of the year the weighted average price of prime arable land in Ireland, excluding Dublin, was approximately €10,650 per acre and €9,900 for prime grassland.
Commenting on the national agricultural land market, Philip Guckian, Associate Director, Sherry FitzGerald Country Homes, Farms and Estates, said “The land market showed enormous resilience in 2020 in the face a once-in-a-century global crisis. While the necessary health restrictions implemented to curb the spread of the virus undoubtedly had adverse implications for the economy and the land market, overall prices have held largely firm. Following the greater reopening of the economy, the second part of the year saw upward movement in prices.
Looking forward to 2021, I feel that this momentum in prices will continue into this new year with the ongoing shortage of good quality lands still an issue. Land is a very sought-after commodity in Ireland and history has shown us that there will always be a market for it. Dairy farming is showing strong signs of growth and with this comes the need for grazing lands which will subsequently increase demand for land either through letting or sales. Beef prices remained stable and grain prices saw a slight increase in values in 2020. Considering all these factors we may see a small increase in land values in 2021”.
Notes to editor
Founded in 1982, Sherry FitzGerald has grown to become Ireland’s largest firm of estate agents with 97 owned and franchised offices throughout Ireland.
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