Farmers and investors compete for land as demand outpaces supply

The average price for an acre of agricultural grazing land reached €13,949 an acre in 2024, up 8% from €12,840 an acre the previous year, and overall, increases in land sale and rental prices have been continuing, according to the annual farm survey by IPAV, the Institute of Professional Auctioneers and Valuers.

And, the report predicts, prices look set to rise by 5% to 10% this year.

The report says that when it came to farm sales in Leinster during 2024, it was a tale of two regions: auctioneers in the northern part of the province reported a good supply of land and a lively market,, whereas auctioneers in the southern counties saw supply remain static or tighten.

“Traditionally tillage farmers were major players in the Leinster land market, but dairy farmers are undoubtedly in the ascendant along with business buyers, many of whom have a farming background who see land as a solid investment,” states the report.

It goes on to add that while a rough overall average price for land in the province comes to €16,259, grazing land made an average of between €13,300 and €20,000 per acre, while some headline sales saw land make up to €36,000 per acre.

Forestry ground made an average of about €7,000 per acre, while the lease price being paid for grazing land averaged between €245 and €400 per acre.

Tillage ground commanded, on average, between €275 and €340 per acre.

Westmeath

Mullingar auctioneer David McDonnell, of Property Partners McDonnell in Mullingar, reports that the land market was strong in 2024, with a good supply, which, he attributes, mainly to probate sales.

“Auction success rates have been high, particularly for quality land, while more marginal pieces have taken longer to sell,” says David.

A notable sale achieved by Property Partners McDonnell was the Gaybrook Park estate in Mullingar, which achieved €1.88 million for 110 acres, an average of €16,363 per acre.

According to David, the rental market has remained stable and larger farmers under nitrates pressure are paying higher rates and favouring long-term leases due to tax incentives.

“Key factors influencing prices include location, proximity to existing larger holdings, and continued demand from non-active farmers benefiting from CAT reliefs,” he says, adding that consolidation, where farmers sell outlying land to buy closer to their main enterprise, is also shaping demand.

“Looking ahead, land prices are expected to hold steady, with any increases likely for better-quality land,” he states.

In neighbouring Meath, Stephen Barry of Raymond Potterton Auctioneers, says the supply of land for sale in the county over the last 12 months has remained steady, and an unusually high number of farms of more than 100 acres have come to market.

“Despite that, demand continues to outpace supply,” he says, explaining that smaller plots of 10 to 25 acres have drawn strong local interest, while larger parcels have attracted both farmers and investors.

“Looking ahead, land prices are expected to remain steady with slight increases, as strong farmgate prices and potential changes to agricultural inheritance relief in the upcoming budget may drive further demand,” he says.

Future

The report says that a combination of higher farm incomes, a shortage of land and increasing demand from both farmers and investors drove prices. Farmers made their presence felt in the land market, especially in the last quarter, and were happy to go toe-to-toe with business buyers and investors in the auction rooms.

Predictions are that while macroeconomic uncertainties exist, the overall strength of Ireland’s agricultural sector suggests that demand for land will continue to rise. Consequently, land prices are expected to follow suit, and a broad consensus among IPAV members is that land prices will remain strong, with some regions expecting growth of 5% to 10%.

Pat Davitt, the IPAV chief executive, says supply has been constrained by traditional factors such as farmers wanting to keep land in the family and newer trends such as the movement towards long-term leasing and the increasing footprint of solar farms.

“At the same time, competition has intensified with the forthcoming Nitrates Directive, and increasingly land being viewed as a tax efficient vehicle for wealth transfer,” he said.

“Beyond that there are of course regional factors that vary across the provinces.”