2019 was a challenging year in the agricultural land market with poorer sentiment affecting values. Agricultural land prices nationally, excluding Dublin, fell by 3% in 2019, according to the latest data from Sherry FitzGerald Research.
Following a 1.2% drop in the final quarter of the year, the weighted average price of farmland in Ireland, excluding Dublin, was approximately €9,000 per acre. On an average basis, land values fell by €300 per acre over the course of the year. As such, average values in Q4 2019 were level with those of Q2 2017.
Last year was particularly difficult for the farming industry with a broad range of factors impacting the sector, with this subsequently feeding into activity in the land market. The significant decline in cattle prices, which saw large scale protests, hit demand, with prime grassland values recording the largest fall of any of farm types.
Agents also cited Brexit as a contributing factor. The passing of two cliff edge Brexits deadlines in 2019 negatively affected sentiment in the farming sector at large and this had a knock-on effect in the land market. Furthermore, the persistent difficulty farmers face in obtaining finance continued to impede demand and market activity.
Reflecting this, all regions noted some reduction in values in the year. These falls were more modest in areas such as the South-East and the Mid-East, and more accelerated in the West and Midlands. Land values remained highest in the Mid-East where the average price per acre was approximately €10,750 and lowest in the West at €5,800 per acre.
Of the main land types, prime grassland values saw the largest decline in the year, reflecting the problems faced by the beef sector. Prime grassland values fell by 4.4.% in 2019, the largest annual fall in over six years, with the average weighted price equating to €10,000 per acre by the end of last year.
Other land types, namely prime arable and marginal grassland, i.e. poorer quality grassland, were steadier, although both recorded a fall of 2.0% and 2.1% respectively. At year end, the average weighted price of prime arable land nationally stood at €11,000 per acre and €6,000 per acre for marginal grassland.
Last year, agents noted a weakening in buyer sentiment nationally, although this appears to have taken place largely nearer to the start of 2019. By year end, sentiment appeared to have stabilised with even some improvement noted in the South-East and Mid-East. Corresponding with the overall deterioration in sentiment in the year, agents did note some drop back in supply and activity in the market also.
Commenting on the overall market, Philip Guckian, Associate Director, Sherry FitzGerald Country Homes, Farms and Estates, said “While 2019 was a challenging year for the land market, due to Brexit and beef prices, amongst other factors, the year closed with some signs of stability, particularly concerning sentiment. It is hoped that this steadying in confidence amongst buyers will filter into prices as 2020 progresses”.
For any further information, please contact:
Eoin Lynch Philip Guckian
Economist, Researcher Associate Director
Sherry FitzGerald Group Sherry FitzGerald Country Homes, Farms and Estates
Ph: 01 237 6474 Ph: 01 237 6308
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. Over 50 Sherry FitzGerald Countrywide members provided values for different farmland types, namely Prime Arable Cropping Land, Prime Grassland, Marginal Grassland and Mature Forestry. These values were based on actual sales, or likely achievable sales, in their area in the given quarter. Each region is weighted, and values at the national level, excluding Dublin, are calculated based on the addition of these weights. These weights are based off total value of farmland sold in each region according to the CSO.