Upturn in economy to boost land prices
PHILLIP BYRNE of Coonan Auctioneers in Maynooth i s predic t i ng a 5-10pc increase in land prices for the coming year. Mr Byrne described 2013 as an outstanding year with the auctioneering firm selling 22 farms in seven Leinster counties for between €10,750 to €16,500/ac.
He belie ves the general improvement in the property market and the re turn of confidence to the economy generally over the last few months will be seen in land sales and prices in the months ahead.
“The recently publicised Rural Development Programme effective from 2015 will see €4bn made available to the farming community and this should put a floor under farm incomes and lead to a growth of confidence in the sector.
“This should result in a rise in land prices,” said Mr Byrne.
As evidence of better times ahead, Mr Byrne has a significant number of enquiries from prospective land buyers at home and abroad. He says all are cash customers looking for properties in the 40ac to 100ac bracket.
Celia Lamb of Ganly Walters agrees that land prices are set to increase in 2014 and puts that increase in the order of 5pc nationally.
According to the most recent Ganly Walters land sur vey, prices in Dublin, Kildare and Wicklow increased by up to 14.2pc in 2013 on top of an increase of 14.1pc recorded in the previous year.
“We are experiencing a strong demand for land,” Ms Lamb said. “Given the good winter we are experiencing so far, the likelihood of substantial yields and the strong dairy sector, we believe that values are likely to increase by 5pc in 2014.”
ENCOURAGING
In common with other auctioneers throughout the country, Charles Erwin also of Ganly Walters is witnessing a rise in interest in Irish property among t he Ir ish abroad, partic ularly in the countr y homes market.
“An encouraging aspect of this market is the number of enquiries from ‘expat’ families wishing to move back to Ireland.
“Some wish to acquire a country house to use initially as a second home with the aim of moving back permanently in the longer term.
“Others are moving back to avail of the new job opportunities opening up in the Irish economy. They also want their children to e xperience the good education system here,” he said.
However, up to 60pc of Ganly Walters’ country sales this year were to overseas clients, with the major of interest coming from Britain, the Middle East and the US.
Jordan auctioneers sold more than 2,000ac in 2013 and in a report on the firm’s activity Clive Kavanagh said a key driver of the market was the farmer with cash.
“We estimate that of our land s al es l as t year, 90pc of purchasers were coming from the position of having cash at hand. Many who received development or CPO monies during the boom years are now more active than at anytime before. They remain i n a stronger position than someone with partial bank funding where the limit is se t,” Mr Kavanagh said.
Jordans saw a considerable variation in the price paid for land during the year.
“We sold land from less than €10,000 an acre up to €30,000 an acre,” Mr Kavanagh said.
However, he went on to say t hat t r yi ng t o es t abli s h an average per acre price can be misleading in that each sale is completely different.
Looking at sales patterns he observed that buildings, either houses or those in yards, are not adding considerably to the values being achieved.
“Land is being priced by purchasers on a per acre basis and while buildings may complete a package and increase its attractiveness they do not necessarily add to the end value unless they are exceptional,” he said.
In terms of the year ahead, Jordans envisage continued strong demand for good quality l and and predic t plenty of activity in the land market.
“Values in our opinion will be specific to the property itself and the presence of development monies and cash will still drive the price of land and overall demand.”