Teagasc/SCSI Agricultural Land Market Review and Outlook Report 2022
In this major new survey, chartered surveyors, auctioneers & valuers, operating in the agricultural & rental markets say sales activity was boosted by the exit from COVID restrictions. They predict prices will continue to rise, underpinned by strong demand & a continuing low supply of land for sale
- National farmland prices forecast to rise by 6% on average in 2022
- National average non-residential farmland prices in 2021 range from €5,308 per acre for poor quality land to €10,962 for good land
- The most expensive land was in Kildare where good quality land fetched an average of €15,350 per acre up from €13,600 last year
- The cheapest farmland was in Leitrim where poor quality land on holdings under 50 acres was valued at an average of €2,760 per acre
- SCSI agents expect national rental prices to increase by 10% this year
- Last year average land rental prices increased by between 18% to 29% in Leinster depending on land use
- The lifting of COVID restrictions has boosted sales activity and market confidence
- The invasion of Ukraine has had major international implications for input and output prices in agriculture
- The key and worrying question for farmers is, will higher farm output prices cover their higher input costs this year”
Average increase of 6% expected for 2022
SCSI auctioneers and valuers say that following strong price growth in 2021, particularly for good land, the price of agricultural land in general looks set to increase by 6% on average this year.
Good land increased by an avaerage of 17%
The price of good land showed the biggest increase in 2021 - up by an average of 17% nationally from €9,381 to €10,962 per acre. The price of all non-residential land, on holdings of less than 50 acres also showed significant increases. In Munster prices were up 14%, in Leinster they rose by 12% while the increase in Connacht / Ulster was 5%.
However, the upward arc is not uniform. While the average price of poor-quality land may be up on smaller holdings in the three regions, nationally, the average price for poor-quality land dropped from €5,900 in 2020 to €5,308 last year, a fall of 10%. This decline can be attributed to price developments for larger parcels of poor land in Munster and in some parts of Connacht / Ulster.
Prices around the country
In 2021 Kildare retained its position as having the most expensive land in the country at €15,350 per acre of good land on holdings less than 50 acres. This is up from €13,600 in 2020, an increase of 13%. While Leinster counties made up the first 8 places on last year’s most expensive list, Cork has shot up into second place on €15,070 on this year’ list with Louth next on €14,500, Meath on €14,230 and Tipperary on €14,000 making up the Top 5.
In Leinster average prices for good land on less than 50 acres ranged from Kildare’s high of €15,350 to €11,600 in Offaly, while the prices for poor quality ranged from a high of €9,125 in Louth to €4,967 in Longford.
In Munster, the price differential between good quality and poor-quality land increased most notably. Dairy farmers are continuing to drive the market here with prices for good land in 2021 on holdings under 50 acres ranging from €15,070 in Cork to €9,800 in Clare. Prices for poor quality ranged from an average of €7,700 in Cork to €3,500 in Clare.
In Connacht/Ulster prices for good land ranged from an average of €13,375 per acre in Donegal to €5,025 in Leitrim and for poor land from €5,250 in Monaghan and Cavan to €2,760 in Leitrim, the lowest price in the country for holdings under 50 acres.
Impact of COVID
As market demands strengthen one trend which SCSI members are reporting is greater interest in dwellings on smaller holdings. One of the consequences of COVID is that more and more people are now working from home and in many cases seeking a better work life balance outside of large urban centres. It’s worth noting that typically residential farms of less than 50 acres are around 20% more expensive than non-residential farms of similar size.
Teagasc economist Dr Jason Loughrey said that inflationary price pressures which were identified in last year’s report have sharpened in the intervening time. These pressures have accelerated due to the war in Ukraine and are likely to have a significant impact on farm incomes this year.
Situation in Ukraine
Will the current situation in Ukraine have an impact on land prices? It will come down to the duration and overall economic impact as well as the specific impact on input costs and the profitability of the farming sector in Ireland. But if viability and cashflow issues are exacerbated throughout the remainder of 2022 and beyond, it could impact on the prices paid for agricultural land.
Download the full report Teagasc/SCSI Agricultural Land Report 2022 (PDF)