The price of non-residential farmland surged by 11% last year, as per research conducted by the Society of Chartered Surveyors Ireland (SCSI). However, auctioneers affiliated with SCSI anticipate a slower price increase this year due to reduced returns and higher interest rates.
Farmland rental prices also experienced a 5% uptick last year, with expectations of a further 4% increase this year. The average price per acre soared to €9,300, reaching as high as €20,000 per acre in counties like Waterford. Conversely, County Mayo saw lower prices, dipping to €2,733 per acre.
Peter Murtagh, Chair of the SCSI’s Rural Agency Committee, projects an 11% increase in prices for Munster this year. The study revealed that ‘good’ quality farmland commanded nearly double the price of ‘bad’ quality land. Moreover, dairy farmland is anticipated to yield higher margins in sales compared to tillage farmland, which faces more challenging margins.
Teagasc cautioned that these margins could be affected by adverse weather conditions witnessed earlier this year. While 69% of the data collected included sales to dairy farmers in 2023, the researchers noted a significant portion (20%) of purchasers identifying themselves as ‘other’, which includes the ‘investor’ category.
“This shows there is clearly interest from buyers in acquiring land for forestry or equine purposes, or individuals with a high net worth seeking to diversify their assets by investing in agricultural land,” Murtagh said.
Utilizing data from the Central Statistics Office (CSO), the SCSI assessed the demand for high-quality farmland in the present market. According to the collected data, land sales constitute approximately 0.5% of the agricultural sector in the nation.
The prevailing trend of high demand and low supply is expected to drive further price hikes this year. However, both the SCSI and Teagasc cautioned that price escalations are likely to stabilize in most regions of the country next year. The researchers projected a modest 6% increase in prices for the current year.
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