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27 Sept 2022

Donegal land prices down by 44% 

But nationally, land prices have surged 33% in the last two years . . . 

Donegal land prices down by 44% 

The Irish Farmers Journal’s annual 72-page county by county land price report has revealed the average price of agricultural land increased by a huge 16% in 2020, but the narrative does not extend to Donegal.

Here, the average price of farmland fell by 44% to €9589/ac from €17,176/ac in 2020.

Mayo saw the second largest decline at -23.5% to €4813/ac.

The supply of farmland for sale in Donegal in 2021 returned to more usual levels, after a drop the previous year caused by the lengthy Covid-19 lockdowns put on border counties. The average price was €9,589/ac, a drop of 46% on the previous year. 

One Donegal sale made national headlines following the purchase of 116 acres at Inch Island at auction for €850,000 with the buyer, a business person, planning to rewild the land.

In the Republic of Ireland, the average price of land in 2021 was €11,966/ac.

This was an increase of €1,650/ac (+16% on 2020, +33% on 2019).

This is the highest land price figure recorded since the financial crash of 2008.

For the first time, a new category of buyer has emerged – business people buying land to re-wild and to offset carbon, as with the Donegal example.

A small number of non-farmer investors, also buy land with the specific intention of leasing it to an active farmer and availing of tax relief on the lease income.

Five counties saw a sales decline, while 21 saw an increase in the Republic.

This is the highest land price figure recorded since the financial crash of 2008.

In Northern Ireland, the average price of land in 2021 was £11,444/ac (€13,313/ac).

This was an increase of £1,399/ac (+14% on 2020) and takes NI land prices to unprecedented heights with prices at record highs in almost every county.

A constant theme through 2021 was scarcity of land for sale. This was particularly voiced by auctioneers. The Farmers Journal survey found a decrease of 15% and 11%, respectively, in the number of farms and acres offered by sale.

The rock bottom interest rates on savings, of the past decade, has also boosted demand for farmland. 

The most significant increases in land prices were seen in Clare, Dublin, Leitrim, Westmeath and Monaghan. Clare and Dublin were outliers with increases of 94% and 62%, respectively, on 2020 – relatively small sample sizes in these counties allowed for significant swings in average prices.

Business people continue to be the big buyers taking approximately 40% of the farmland sold. The category is made up of buyers with non-farming income and thus includes part time farmers, business people with an interest in farming and other investors not connected with farming.

Individuals with successful businesses are also buying farmland. In many cases, this was to farm it themselves. But other individuals were motivated to buy land because money in the bank was generating little interest or was subject to negative interest.

It also saw a small number of non-farmer investors, buy land with the specific intention of leasing it to an active farmer and availing of tax relief on the lease income.

 

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