THE PRICE of farmland has fallen significantly for the second year running by an average of 16.8 per cent, according to the Knight Frank annual land sales survey.
Prices being paid declined significantly countrywide but the biggest fall occurred in Dublin and the surrounding counties of Kildare and Wicklow.
“In the Dublin hinterland, which are analysed separately because of the significantly higher prices paid for farmland, prices fell on average by 17.5 per cent,” noted the survey.
“The average price dropped to €25,210 per acre last year from €30,543 per acre in 2007. This was an overall fall of € 5,333 per acre, giving a decline of 17.5 per cent.
“The rest of the country fell slightly less, by an average of 16.1 per cent, with prices averaging € 17,081 per acre in 2008, down from the previous year’s average of €20,367 per acre, representing an overall reduction of €2,750 per acre,” it continued.
The survey also found a dramatic drop in the volume of farmland sold nationally last year, a figure estimated to be as high as 42 per cent.
“In all there were 110 reported sales in 2008, representing a 41 per cent reduction from the previous year’s 154. The total area of land sold in 2008 was just 5,743 acres, compared to 9,933 acres in 2007,” it stated.
The survey also showed the average plot size being sold to be much smaller, having reduced to 52.2 acres in 2008 from 64.5 acres in the previous year.
This figure is only slightly less than that for 2006, when the average plot size was 54 acres.
Two other trends were also noticeable in 2008, the large number of land parcels put up for sale which failed to reach their guide price and, secondly, there were very few farms for sale in the 200-acres plus category.
Knight Frank partner and head of Ireland Residential Robert Ganly said the overall decline in values was to be expected in the current property market downturn.
“The decline in farmland prices over the past two years mirrors the decline across property markets in Ireland and internationally,” he said.
“The global credit crunch has accentuated this trend and is obviously stalling any kind of investment. The slowdown of the building industry means that there has been less money generated from land sold for development,” he added.