Land prices look set to hold this autumn despite the downturn in farm incomes.

A reduction in the volume of farmland coming on the market, and strong demand from non-farming interests are cited as the main factors underpinning land values.

However, a cautious approach by the banks to land-purchase lending has restricted the level of competition for pure farmland, estate agents admitted.

Tom Crosse of GVM Auctioneers in Limerick said the land market in the mid-west has kicked on this year. “More business people are coming back into the land market, they see it as a good place to park money,” he said.

Good land in the region is generally making around €15,000/ac, with fancy holdings making up to €17,000-18,000/ac, Crosse said. Reasonable lands are making €12,000-13,000/ac, with poor land selling for up to €9,000/ac.

Despite banks being “more conservative” in lending for land purchases, Roscommon auctioneer John Earley said the land market in the west is holding “very solid” and that “€10,000/ac is still a good rule of thumb”.

Earley said that land “that was not bad enough to be bad, and not good enough to be good,” was generally making €7,000/ac and going for forestry.

Two-tier market

In contrast, what he described as a “sweet bit” beside a dairy farmer could make up to €12,000/ac. Stephen Barry of Raymond Potterton Auctioneers in Navan said he saw “no reason for prices to slip”.

The majority of land is selling for €14,000-18,000/ac – with exceptional blocks making around €25,000/ac – and this price level will continue to be paid, Barry said. “An awful lot of farmers of scale are still fit to buy,” he maintained.

Mitchelstown auctioneer Eamonn O’Brien said the “appetite is still out there” for land.David Quinn predicted that land prices will stay “hot in those areas where demand is hot”. A two-tier market had developed, he said, with €16,000-20,000/ac being paid for prime land, and a slower market for poorer ground.