Monday 26th February 2024
Competition and Climate Laws Drive 2023 Land Prices Higher – IPAV Report
Tight competition for land to both buy and lease, along with nitrates changes are among the factors driving land prices higher, according to the annual Farm Price Report of IPAV, the Institute of Professional Auctioneers & Valuers, launched today (Monday).
Prices paid for land in 2023 ranged from an average of €16,325 per acre for grazing land in Munster to €5,625 an acre for forestry in Ulster.
The average price for grazing land in 2023 was €12,840, up 5% on the previous year, and a much larger 24% on 2021. In forestry the average price was €5,941.
Prices for letting surged, with scarcity of supply being to the fore throughout pushing up prices. In some cases over €600 per acre was achieved at auction. The average price was in the €300 to €350 per acre range for grazing ground, a much higher price than previous years.
Commentating on the report IPAV’s Chief Executive Pat Davitt said for active and ambitious young farmers in particular, they are finding themselves competing, increasingly in recent years, with non-farmers for the scarce resource that is land.
“That is particularly the case for holdings close to cities and large towns,” he said. The Report found some evidence also that landlords leaving the residential rental sector had moved to invest in land as an alternative.
“However, members anticipate that Budget tax changes, which require landowners to have land for seven years before qualifying for tax incentives may taper that somewhat in the year ahead.”
Mr Davitt said one of the big pressure points in farming, as elsewhere in the economy, is high interest rates.
“It is to be hoped that during 2024 we will begin to see a reversal of at least some of the 10 aggressive interest rate hikes imposed by the European Central Bank since July 2022,” he said.
And he said IPAV will continue to work closely with farmers. “We were delighted to have been responsible for the return to EVS (European Valuation Standards) for farmland. This is something we’ve championed because it brings the highest standard of rigour to the process of land valuation,” he concluded.
Ends