Land val­ues hold­ing firm as de­mand de­fies Covid-19 con­cerns

Irish Independent - Farming - - COMMENT - Tom Crosse

De­spite all the fore­cast­ers pre­dict­ing a big fall-off in prop­erty val­ues as a re­sult of Covid-19, auc­tion­eers around the coun­try are re­port­ing a ro­bust mar­ket, with val­ues hold­ing firm.

The land mar­ket re­mains strong, with a num­ber of good sales tak­ing place since the lock­down con­cluded. All the ev­i­dence sug­gests that val­ues are hold­ing up, with no fall-off in de­mand.

Many agents have re­verted to the pri­vate treaty method of sell­ing, with very few auc­tions tak­ing place. This will hope­fully change in the au­tumn as the re­stric­tion on num­bers at­tend­ing gath­er­ings are eased.

The main play­ers in the land mar­ket are still very much dairy farm­ers, with many seek­ing to ex­pand their herd and seek­ing ad­di­tional graz­ing plat­forms. These farm­ers are pre­pared to travel to ac­quire hold­ings and have the op­tion of us­ing out­side farms for fod­der pur­poses or to bring along young heifers as re­place­ments.

The other no­table change in the mar­ket in re­cent times is the re-emer­gence of business peo­ple bid­ding on good-qual­ity and well-lo­cated hold­ings. Some are buying for hobby farm­ing, oth­ers may have fam­ily with eques­trian or sport­ing in­ter­ests that re­quires space.

GVM also had an in­vestor who re­cently pur­chased land and leased it, avail­ing of the at­trac­tive tax breaks as­so­ci­ated with long-term land let­ting. While the yield is low, land does not re­quire any real maintenanc­e. There is no as­so­ci­ated prop­erty tax. Land is rightly per­ceived as a safe as­set type that has held value through thick and thin, eco­nom­i­cally or oth­er­wise. Money is cheap to borrow now, and peo­ple with money are keen to in­vest in a safe and secure as­set. What bet­ter than a nice par­cel of land?

In some parts of the coun­try (par­tic­u­larly where there are strong eques­trian in­ter­ests), buy­ers are us­ing land as a mech­a­nism of trans­fer­ring wealth. Agri­cul­tural land again has favourable sta­tus in this re­gard.

Av­er­age prices in the mid-west vary from €7-10,000/ac, with Kil­dare, Meath, Louth, Dublin, Wex­ford, Kilkenny and part of Wick­low the hotspots.

A par­cel of land in Maynooth sold at auc­tion re­cently by Ea­mon O’Fla­herty fetched €22,000/ac.

De­mand for forestry land con­tin­ues un­abated. GVM re­cently sold 32 acres for €185,000, or €5,780/ac.

Many in­vestors and funds are chas­ing suit­able land for com­mer­cial plan­ta­tions. Price is in­flu­enced by land qual­ity, prox­im­ity to roads, wa­ter cour­ses, overhead py­lons etc. The value of stand­ing and ma­ture forestry de­pends on the wood type, with Sitka spruce now the most pop­u­lar.

There is also some in­creased de­mand for land des­ig­nated a Spe­cial Area of Con­ser­va­tion, with grants avail­able and farm­ers are us­ing such land to ac­ti­vate en­ti­tle­ments. En­ti­tle­ments are fetch­ing ap­prox­i­mately 2.5 times their an­nual value, with the higher-val­ued en­ti­tle­ment achieving a bet­ter price.

Let­ting val­ues are a lit­tle flat this year, just about hold­ing their own on 2019. The very dif­fi­cult year just gone for beef farm­ers is a big con­tribut­ing factor in this eas­ing of de­mand.

The main play­ers in the land mar­ket are dairy farm­ers

Tom Crosse is group di­rec­tor of GMV Auc­tion­eers

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