From 1970 to 2007, the average price of land in Ireland increased 100 fold, going from around €200/acre to €20,200/acre over the course of four decades. During this period, Ireland joined the EU in 1973, a recession hit in 1979, the building boom took off in the early 2000s and the worst recession in history struck in 2008. In their own unique way, each event contributed to the rise and fall of land prices over the past 40 years.

Looking back, average land values had steadily increased to €2,000/acre by 1979 (see graph above). At this stage, Ireland was hit by a recession and it became a period of great uncertainty. Interest rates went through the roof and many farmers found themselves in difficult financial situations. However, two of the major differences between the recession of the late 1970s/early 1980s and the recession of the last eight years was that back then, the banks had money to lend and the standard of living was much lower.

Anecdotal evidence suggests that the price of land had halved by the mid-1980s. In some regions it had fallen back to €800 to €1,000/acre and possibly less in other areas. Some farmers had no option but to sell as the value of their assets had plummeted while buyers were forced to pay horrendously high interest rates. Towards the late 1980s and into the 1990s, the economy began to pick up. Land values started to move upwards, with annual increases of €100 to €200/acre evident initially.

These increases later jumped to €500/acre annually and by 2000, the average price of land was almost rising by €1,000/acre per anum. By then, the Celtic Tiger had arrived. Things began to rapidly explode. Property prices became inflated. Bank lending was getting out of control.

Such was the rapid pace of growth that average prices more than doubled within the space of four years, going from about €10,000/acre in 2003 to €23,600/acre in 2006. This was a pinnacle point in time for the property market. After this, cracks started to appear towards the end of 2006 and into 2007, particularly in the housing market. But the greatest shock of all was hovering on the horizon. In October 2008, the news of a global financial crisis caused property prices to plummet literally overnight. The ironic thing is that the average price of land fell just as quickly as it had peaked. By 2009, average values had halved to €10,222/acre – back to 2003 levels. A year later the average had fallen to €8,700/acre.

Ever since, the land market has been desperately trying to correct itself and find a new price level. But the national average has never been able to surmount the €10,000/acre benchmark. For the past seven years, it has been hovering between €8,708/acre and €9,954/acre, generating nice gentle waves of small peaks and troughs but nothing substantial.

In fact, in some instances, any price gains achieved in one year were wiped out by a price decrease in the following year. This has been the nature of the market since 2009. At this stage, it’s fair to say that average land prices have levelled off.