James Spring of Donohoe Spring REA auctioneers.

Forestry firms up demand for land

Cavan/Leitrim auctioneer James Spring of REA Donohoe Spring reports there was strong demand for land in 2023, an experience which chimed with the findings of the Real Estate Alliance’s National Land Survey 2023.

Real Estate Alliance (REA) agents across the country saw an increase of 30% in land sales last year while the amount of money generated increased by 32% on the 2022 figures. A total of 2,661ac of land sold for over €37.088m.

Commenting of local land sales in West Cavan and Leitrim, James Spring says: “There was a strong demand from local farmers and from forestry agents and prices ranged from €6,000/ac to €7,500/ac. A non-residential holding of 31 acres in South East Leitrim made €200,000 and a 51 acre residential property (in need of updating) in West Cavan made €515,000.”

A survey of 17 REA agents involving 91 properties saw a slight increase of 1.5% on the per acre price paid with an average of €13,940/ac paid in 2023 compared with €13,725/ac the previous year. Cash buyers continue to dominate farmland sales with over 66% of land purchases funded out of cash reserves.

Local farmers account for 65% of farmland purchasing and when other farming customers are included the proportion of farmer-buyers reaches over 67%. Buy-to-rent investors accounted for almost nine per cent of the market in the land market in 2023 but it is to be expected that this will decline substantially in 2024. Forestry buyers make up 7.7% of those purchasing land while residential and development buyers make up a combined 5.5%.

Twenty-two per cent of those who sold farmland in 2023 are described as ‘siblings divesting ownership after a holding period’, marking an increase of over 15% in this cohort from 2022. At 15.4% the number of farmers downsizing is equal to the percentage of farms being sold due to probate, traditionally the primary driver of land sales. Sales undertaken to fund other enterprises accounted for 14% of transactions while 11% were intended to fund retirement with 6.6% of sellers moving out of farming. Almost eight per cent of vendors were recorded as living overseas.

In 2023 mixed enterprises accounted for almost 32% of the farms sold by REA auctioneers while beef farms came next at over 28%. Sheep and tillage holdings each accounted for less than 10% of sales with smallholdings coming in at 7.7%. The amount of land sold for forestry stands at 6.6%.

The average size of holding sold in 2023 increased slightly from 27ac to 29ac in 2023 while farms of less than 50ac account for 90% of transactions.

The cost of rented land was one of the big stories of 2023 and the REA survey reflects this with over 83% of the grassland with entitlements making between €300/ac and €500/ac.