Poor quality land in Mayo has lowest value in country

SCSI auctioneers and valuers are forecasting that the price of agricultural land nationally will increase by 6% on average this year, mainly due to an expected recovery in milk prices and continuing strong demand from farmers and investors.

National average non-residential farmland prices ranged from €6,286 per acre for poor quality land last year - up 13% from €5,564 in 2022 - to €12,308 per acre for good quality land - up 10% from €11,172 the previous year, a new survey from the Society of Chartered Surveyors Ireland (SCSI) revealed.

The survey found that on holdings under 50 acres, Mayo had the third most expensive land in Connacht/Ulster with good quality land going for €10,850 per acre, up from €10,100 in 2022. Donegal had the highest on €13,400 with Cavan and Monaghan in joint second on €11,000.

It also found the most expensive land in the country was in Waterford with good quality land on less than 50 acres fetching an average of €20,000 per acre. However the land with the lowest value was poor quality land in Mayo where the average price for poor quality land on holding over 100 acres was €2,733 per acre.

In Connacht/Ulster, average prices for good land on holdings under 50 acres ranged from the high of €13,400 per acre in Donegal to €7,978 in Leitrim, up from €6,140 the previous year. Prices for poor quality land ranged from an average of €7,750 in Monaghan to €3,833 in Mayo, the lowest price in the country for holdings under 50 acres.

In Mayo the price of an acre of good land on holdings between 50 to 100 acres last year was €8,333 while the price of an acre of good land on holdings over 100 acres was €4,333. The corresponding prices for an acre of poor land were €3,333 and, as noted above, €2,733.

According to the Society of Chartered Surveyors Ireland / Teagasc Agricultural Land Market Review and Outlook Report 2024, the Central Statistics Office data shows that the share of agricultural land which transacts for sale annually is only around 0.5% and this is one of the main reasons for the strong demand for agricultural land for purchase and rental here.

According to the survey of 129 auctioneers and valuers from all over the country, there wasn’t any significant changes in volume of land sold last year compared to 2022, with executor/probate sales providing the main source of farmland sales.

Gerard O’Toole of O’Toole & Co. in Westport, who is vice-president of the SCSI, said that while demand for land - primarily by dairy farmers - had continued to drive land sales and rental price increases last year, price expectations for 2024 have moderated due to a number of factors.

“We can see this most readily in the rental market which reacts more quickly to economic changes in farming. Last year average rental values increased by just 4.5% across all farming uses despite predictions of double-digit growth similar to that which occurred in 2022. These increases did not materialise due in the main to poorer overall returns in farming and very poor weather conditions which dampened demand from some farming sectors - particularly in Leinster and Connacht / Ulster - and kept a lid on rental inflation.

“In Munster, which has a higher prevalence of dairy, rental values increased by over 12%. One of the features of the market that is emerging is that some dairy farmers have a demand for land to allow them to adjust their stocking rates to ensure they comply with tighter environmental restrictions relating to water quality.

“While land values are expected to increase again this year, mainly due to an expected improvement in milk prices and strong interest from farmers and investors, the increases are forecast to be an average of 6%, well down on the double-digit growth recorded last year. On a provincial level Leinster, Munster and Connacht/Ulster are projected to experience an increase of land values by 4%, 11% and 5% respectively.”

He added: “While dairy farmers are ranked as the number one buyer by 69% of respondents, it is interesting to see that ‘other’, which could also be categorised as ‘investor’, constitutes 20% of buyers. 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.”

The full report is available at https://scsi.ie/land/