Cavan land prices buoyant, reports Woods

Despite all the doom of the Coronavirus and gloom of Brexit, land prices in County Cavan have proven resilient, according to auctioneer Declan Woods.

“Land prices have been static in County Cavan bumping along at around €7,000/acre since about 2015,” begins the Sherry FitzGerald agent. “But oddly enough, land prices in Cavan jumped up in 2020 - they are now back over €8,000/acre for land prices in general.”

The Cavan Town based auctioneer suspects a number of factors feed into the price hike which on the face of it appears counter intuitive.

Land supply

“The average price throughout the country rose in the region of 13-15%,” says Declan, noting the volume of farmland offered for sale nationally fell significantly last year - from around 1,300 holdings in 2019 down to 940 holdings in 2020.

“Demand will go up because as the old saying goes, ‘We’ve stopped making land’. In many areas, it’s generational when these sales happen to come; the same farm doesn’t tend to go for sale more than once in a lifetime.”

Also, from a Cavan perspective he observes: “You never see huge amounts of land for sale. They don’t tend to be very large farms, the average holdings you see selling in our region are 40-50 acres.”

Does that size farm suggest they are leaving agriculture because the volume of land they had, while sustainable in previous decades, is no longer enough to survive in the sector in this more intensive era?

Declan suspects it is more likely “natural attrition”.

“We would all be acutely aware of farmers from a particular age group, who may not have heirs/heiresses to the farm and are selling on the land. They didn’t have an exit strategy and farmed on, and farmed on - in some cases into their 80s,” he says, painting a grimly familiar picture.

Demand

This limited supply has implications for demand.

“A lack in any kind of stock will improve the appetite for it as well,” says Declan, whose business beat off competition from 96 other Sherry FitzGerald offices to claim the prestigious Countrywide Member of the Year award.

He observes that since the economic collapse of 2008 the typical profile of land buyers has been limited to active farmers.

“It was farmers buying land and land came way back in price from the boom times. But what you were seeing since then is the expansion of herds, if land comes up that’s adjoining a dairy farmer, in a lot of cases they would be a very strong contender for it, because of the ability to extend their holding and use their existing infrastructure.”

While many of us are financially bruised, or worse, through this pandemic, Declan suggests there are some who aren’t faring too bad, and they are seeking a degree of certainty for their income.

“There have been other people who have been in a position where they have managed to save - and savings had been high coming into the pandemic anyway.

“People are looking at different ways to now put their money aside. Some people don’t see an attraction in putting money in the bank. The return on it isn’t very strong, and of course with the emergence of new tax and charges, it is effectively eating the head of itself - so they are looking at other ways to invest.

“Some people, who wouldn’t necessarily be farmers, are now buying holdings and putting their money into that.”

He contends that the current market price of circa €8,000/acre in Cavan remains “a safe purchase because you are not buying it at over-value”.

In bringing together the desire of many dairy farmers to expand their farms when the opportunity presents, along with those seeking a safe haven for their cash, Declan forecasts: “I think it is safe to say land is still a very safe investment, and the expectation is that land prices will continue to rise, albeit at a gradual level.”

Auctions of Private Treaty

Declan is an advocate for the public auction route when selling, noting “huge advantages from the vendor’s perspective”.

“Even with the emergence of Covid and the restrictions we had a farm of land in Danesfort, Farnham this year which we listed using the Offr.ie platform,” he says proudly noting they were the first auctioneers in the county to use this particular online Auction platform.

“The auction route is seamless. We listed a farm at the beginning of January, had the auction within three weeks of listing date, and the sale closed before the end of February. From an owners’ perspective they know the process won’t be tedious.

“Sales by private treaty can last anywhere in the region of 12 to 14 weeks to get the contracts across the line,” he says.

Whilst farmers are predisposed to auctions having bought and sold cattle through the mart, he says if you have a vendor who struggles with the online aspect, then he is more than happy to pursue the private treaty route.

Regardless of which route a vendor would choose, Declan is confident there will be plenty of buyers for it.

“I think there is a great appetite for land again, there’s still great value in land. I think the older members of the sector are starting to identify exit strategies and there will be more land coming to the market this year.

“So, I think it is an exciting time for anybody who is in the sector.”