If one aspect of the land market has been highlighted over the first six months of 2018, it is its peculiarity. While the year has been spectacular for some, it has been equally disappointing for others. The idea that land of similar quality and even located in similar areas can have such varying results is testament to the unpredictability that the land market in Ireland presents.
However, while sentiment towards the market varies for individual auctioneers, certain trends from 2017 have continued while others have slowed.
So what are the eight main trends over the first six months of 2018 and what are the main numbers that stick out?
1. Very slow spring.
The weather had a major impact on the land market this spring. Very little land came to the market as auctioneers held back to ensure ground looked at its best. The continuous rain into May made this difficult.
The impact was also felt into summer. Many auctioneer who had a poor year cited poor morale among farmers as a big reason for the lack of action in the market. Financially, some farmers were curtailed by having to buy in fodder. In other instances, farmers were simply fed up. In any case, the weather certainly did not help.
2. The burst of land in May.
The delayed spring inevitably gave us a burst of land to the market. Almost 450 properties came to the market from April to mid-July. In May, 144 holdings arrived for sale while 135 properties were offered in June.
3. Business people active.
2017 saw a definite presence of business people buying land and this trend seems to have continued into 2018.
According to preliminary figures, 16% of those who bought land in 2018 have been classed as business people. A businessperson in this instance may be defined as an individual whose primary income source is from a business.
The average price paid by business people for land in 2018 so far is just over €15,660/ac. The average size of the properties are just under 50 acres. Six holdings of note were almost 100 acres or over. These include: 101 acres in Moneen in Cork, which sold for €5.8m; 100 acres in Glen South in Cork, which sold for circa €900,000; and 92.5 acres in Cahir, which sold at auction for almost €2.2m.
4. Auctions doing the business.
June saw a high percentage of withdrawals from auction, with over half of auctions failing to sell under the hammer. However, the year as a whole has been very successful. In a study of 175 auctions over the course of 2018, 141 sold. In total, 99 of these were under the hammer, with 42 being withdrawn from auction and sold afterwards. In all, 34 farms were withdrawn from auction and did not sell. This means the success rate selling under the hammer at auction was 55% and, in total, 80% for all sales including after auction.
5. Auctions commanding higher prices.
Auctions were also commanding a solid price. The average price per acre in the Republic of Ireland in 2017 was almost €9,100/ac. Our database for the first six months shows that the average price for land sold at auction is almost €11,200/ac. These figures exclude private treaty sales, so this figure does not give an accurate reflection of the true land price as a whole, especially giving the high number of auctions in Leinster and Munster relative to Connacht and Ulster. However, the research highlights that land selling at auction is achieving a high price.
6. Dairy farmers more careful.
The wet spring and dry summer has dampened the appetite of dairy farmers. Last year saw a big push from dairy farmers in certain regions but this has been quelled somewhat as the focus shifts towards dealing with the difficulties associated with the weather. Multiple auctioneers in prominent dairy counties have suggested that this slowdown is merely temporary.
7. Leasing still appetite there.
The hunger for leasing land continues to be strong. Prices have risen from last year and competition remains high.
8. Beef farmers active.
From our figures, almost 40% of buyers were classed as beef farmers. The average price paid by beef farmers was €9,210/acre. A beef farmer refers to part-time farmers, suckler farmers, beef finishers etc.
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