A new report on the land market shows that land prices increased in 2013 and activity levels are up 5% in the first quarter of 2014. Prices rose highest in Munster.
land report, which was compiled by the Society of Chartered Surveyors
Ireland (SCSI) and Teagasc, the Irish Agriculture and Food Authority, shows that
prices for agricultural land up to 50 acres increased nationally in 2013.
Professor Gerry Boyle, director of Teagasc said; “Good information on land sale
and rental price developments is vital for farm business planning and in this
context the report is to be particularly welcomed. Due to milk quota removal
dairy farmers, in particular, will have an interest in this publication.”
Trevor McCarthy, chairman of the Society of Chartered Surveyors Ireland (SCSI)
Rural Professional Group said; “In order to meet the increased output targets of
50 per cent increases in milk production in Food Harvest 2020, new dairy farms
will need to be established. Clearly this has implications for the land market
and it is imperative that the supply issue is addressed. According to the
report, the volume of land which came to market increased by just over 4% on the
previous year. The current level of land transfer for sale is, however, minimal
with just 0.5% of all land transacted annually. This lack of supply is becoming
an issue, particularly in the context of Food Harvest 2020 and we hope that
measures to improve land mobility are considered by Government”.
Farmers made over €4bn from the national roadbuilding programme during the boom, never mind a bonanza from other development land sales.
It was claimed during the property bubble that in France, each field changed hands at least once every 70 years, but in Ireland on average a field changed hands every 555 years! Total annual turnover in Ireland can be as low as 0.2% of the total acreage. Countries with sales restrictions, such as France, had the cheapest land.
Land was about €6,000 a hectare in France, compared with almost €60,000 (€24,200 per acre) in Ireland - - the most expensive in Europe in 2007 -- as French land must be offered first to young local farmers. In the later years of the bubble in Ireland, demand has been boosted by purchases of 'lifestyle farms', especially within 100 km of Dublin, coupled with the increasing trend of 'off-farm' employment leading to commercial farmers in effect becoming 'hobby farmers.'
Transactions have fallen in recent decades and EU cash payments unrelated to production; pensions; site sales and short-term lettings or conacre give an incentive to older farmers not to sell while multi-year leasing, which is common in Europe is not in Ireland.
In the early 1990s, over 30,000 hectares was being traded per year, about three times the amount that currently comes to the market and while investors get tax breaks for buying land for speculation. See an analysis here on Irish food production.
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