The price of farmland should remain relatively steady this year despite the COVID-19 pandemic, a survey of Sherry Fitzgerald agents suggests. Interest should remain strong for land, particularly smaller parcels. The main issue in the market to date this year is the lack of supply, with many vendors holding out on selling until things settle down.

“It may take a few months for this market to find its feet and for that time there may be a decline. However, land is a sought-after commodity in Ireland and history has shown us that there will always be a market for it,” said Philip Guckian from the country homes division. He added that the market for larger land holdings is more difficult to predict than for those less than 50ac.

“I believe there will be a lull for a while, however this is a health crisis not a financial crisis, I believe it will recover,” said John Radford in New Ross.

I feel there could be a swing back towards land

Michael O’Donovan in Fermoy believes that we might even see a situation where people will move from investing in commercial property back to farmland.

“From 2010 to 2013, accountants and tax advisors were advising investors to buy land. This changed to residential/commercial property in the last couple of years and I feel there could be a swing back towards land. It remains one of the most tax efficient ways to pass on money,” he said.

The outlook for the dairy and beef market is causing concern among some agents. They fear that a fall in prices will have a knock-on effect on farmers income and ability to secure bank finance.

“In our area a source of finance is from the sale of Kerry Group/Kerry Co-op shares and as the share price has also fallen since COVID-19, it may deter a farmer from selling shares to purchase land,” said Norma Stack in Abbeyfeale, Co Limerick.

The main feeling on the ground from farmers is that they are holding off on putting land on the market at the moment due to the pandemic

Similarly in Tullamore, Hilary Hamill says that land prices are back by 5% to 10% at the moment as a result of the fall in milk prices.

“The main feeling on the ground from farmers is that they are holding off on putting land on the market at the moment due to the pandemic and holding off on accepting offers. They are holding off till Autumn. Reduced dairy prices are also impacting bank lending. The demand is steady, and the outlook is steady rather than doom and gloom,” Hilary said.

First quarter

Up until restrictions came into force in mid-March, estate agents were gearing up for the usual busy spring-summer selling season. Sherry Fitzgerald agents say that any transactions that were sale agreed prior to the lockdown are still holding.

“We had one sale of land that was in process when the COVID-19 pandemic hit and that concluded recently with no attempt at a price change or effort to renegotiate. The price was approx. €10,000/ac for a reasonable portion of ground,” said John Cumisky in Dublin.

We currently have two large holdings with one of the vendors opting to let the lands while waiting for the property to sell

In Limerick Norma Stack says: “It is normally late spring before vendors bring their properties to the market. We do not have any new listings of land, with the exception of land for forestry which has already been sale agreed.

“We currently have two large holdings with one of the vendors opting to let the lands while waiting for the property to sell. We have a number of smaller holdings also on the market, but there have been little or no enquiries.”

In general, we have a strong enquiry list for agricultural land right now

While most agents report that they have a small number of farm properties on the market at the moment, they expect to see more come available once restrictions ease. There is also the expectation that some vendors will hold off until spring 2021 to bring their property to the market.

“In general, we have a strong enquiry list for agricultural land right now and as long as vendors expectations are in line with the market, we do not foresee any negative price adjustments,” John Cumiskey said. “There are a few parcels of ground that we hope to market later in the year- September time – and we will be staying the course with these sales.”

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