Land value Today

rubbledoubledo · 08-06-2012 1:31pm #1

Hi all
What the going rate to buy an acre of land today.
I know it depends on the type of land it is.

For talk sake we will say good dry land.
Thanks

ZETOR_IS_BETTER · 08-06-2012 1:35pm

Talking € 10,000 for good dry land. Take it from there

orwellg84 · 08-06-2012 1:38pm

rubbledoubledo wrote: »

Hi all
What the going rate to buy an acre of land today.
I know it depends on the type of land it is.

For talk sake we will say good dry land.
Thanks

The issues are not only the type of land but also where it is. If I recall the latest annual report priced agricultural land somewhere between €8.5K and €10K per acre. The Farmers Journal do an annual report and I think that will be reflected there.
As with all these things it depends on how much anyone is prepared to pay but I think that the above prices are about right.

rubbledoubledo · 08-06-2012 2:04pm

Thanks guys

reilig · 08-06-2012 2:11pm

The going rate for an acre of land, no matter what its quality, is how much the ajoining landowner has saved and can beg, borrow or steal in order to buy it. There is no rational to land prices in this country. Prices are all determined by demand in specific areas.

bob charles · 08-06-2012 2:11pm

7 - 9K for bare land of a decent sized farm, productive land

telly_lover · 08-06-2012 2:12pm

rubbledoubledo wrote: »

Hi all
What the going rate to buy an acre of land today.
I know it depends on the type of land it is.

For talk sake we will say good dry land.
Thanks

quality of land is important but more important is how interested the neighbours are

telly_lover · 08-06-2012 2:14pm

reilig wrote: »

The going rate for an acre of land, no matter what its quality, is how much the ajoining landowner has saved and can beg, borrow or steal in order to buy it. There is no rational to land prices in this country. Prices are all determined by demand in specific areas.

all it took for farmers to flash the cash for land was two years of good beef and milk prices , the banks are not lending yet land is sailing up in price yet farmers tell us they are poor

fair play to anyone who can buy land but the yarn about penniless famers is a bit tedious

reilig · 08-06-2012 2:18pm

telly_lover wrote: »

all it took for farmers to flash the cash for land was two years of good beef and milk prices , the banks are not lending yet land is sailing up in price yet farmers tell us they are poor

fair play to anyone who can buy land but the yarn about penniless famers is a bit tedious

Banks are lending to farmers. Since the construction bubble burst, farming is about the only industry that they will lend to. Some people would go as far as to say that they are wrecklessly lending to farmers at the current moment and in a small percentage of cases, the money will not be repaid (especially repaid by income from the farm investment).

bbam · 08-06-2012 2:45pm

reilig wrote: »

Banks are lending to farmers. Since the construction bubble burst, farming is about the only industry that they will lend to. Some people would go as far as to say that they are wrecklessly lending to farmers at the current moment and in a small percentage of cases, the money will not be repaid (especially repaid by income from the farm investment).

Spot on there reilig.
My sister works in a bank in Meath and they are throwing money out to farmers based on the weakest of business plans. Little to no futureproofing of the income against the repayments as long as the deeds are thrown in. She is convinced that farm lending is the next bubble to burst over the next 5-10 years with milk prices dictating how it will go. Huge money borrowed this spring to stock ground based on beef prices sustaining but milk seems to be the biggest risk of a real bubble burst.

telly_lover · 08-06-2012 2:45pm

reilig wrote: »

Banks are lending to farmers. Since the construction bubble burst, farming is about the only industry that they will lend to. Some people would go as far as to say that they are wrecklessly lending to farmers at the current moment and in a small percentage of cases, the money will not be repaid (especially repaid by income from the farm investment).

when you consider how land is making 10 k per acre and the average farmer only makes around 200 euro per acre per year , thats 2% yield , very few banks would be impressed with that kind of return , add in the extremley tight lending enviroment and the only conclusion i can come to is that a sizeable number of farmers are cash buyers and FF to them btw but they all cant be farmers who got windfalls for property during the boom

bbam · 08-06-2012 2:47pm

Regarding land prices they nowhere near reflect the potential profit. It continues to hold an emotional value with the need to have more land being a greater draw that what profit can be made.

Muckit · 08-06-2012 2:50pm

It's madness when you think about it really. I walked a lovely farm near us recently. Good land for the area I'm in, offers over €7,500/acre.

I couldn't see how this land could be bought and paid for by itself. ie the twenty acres being paid back soley on the profits from the stock it would take. Am I wrong? Even with existing yard, sheds, machinery used to farm it.

Somebody please prove me wrong so I can convince the OH we can buy it

telly_lover · 08-06-2012 2:50pm

bbam wrote: »

Regarding land prices they nowhere near reflect the potential profit. It continues to hold an emotional value with the need to have more land being a greater draw that what profit can be made.

banks have no truck with emotional attachment so the farmers must have the cash

bbam · 08-06-2012 2:52pm

telly_lover wrote: »

when you consider how land is making 10 k per acre and the average farmer only makes around 200 euro per acre per year , thats 2% yield , very few banks would be impressed with that kind of return , add in the extremley tight lending enviroment and the only conclusion i can come to is that a sizeable number of farmers are cash buyers and FF to them btw but they all cant be farmers who got windfalls for property during the boom

Yes there is some movement on ment taken on during the boom but huge lending is taking place. The difference being that land is an asset the bank can rely on as being forever in demand.
Where a business premises may lie idle if a business goes under there will always be a que of farmers ready to buy land at top prices so the deeds are very good collateral.

telly_lover · 08-06-2012 2:52pm

Muckit wrote: »

It's madness when you think about it really. I walked a lovely farm near us recently. Good land for the area I'm in, offers over €7,500/acre.

I couldn't see how this land could be bought and paid for by itself. ie the twenty acres being paid back soley on the profits from the stock it would take. Am I wrong? Even with existing yard, sheds, machinery used to farm it.

Somebody please prove me wrong so I can convince the OH we can buy it

i consider 7000 per acre to be reasonable for land and id buy it at that if i could get it , even i never worked it , with a rental value of 150 euro per acre ,thats 2% yield , as good as most banks pay and i can sleep safe at night knowing a euro collapse wont hit me too hard in the morning

ps , what part of galway is that , is it near portumna ?

telly_lover · 08-06-2012 2:55pm

bbam wrote: »

Yes there is some movement on ment taken on during the boom but huge lending is taking place. The difference being that land is an asset the bank can rely on as being forever in demand.
Where a business premises may lie idle if a business goes under there will always be a que of farmers ready to buy land at top prices so the deeds are very good collateral.

when land was cheap at 15 k per acre six years ago , banks thought land was safe and look where they are now , im not saying land is not safe but surely every assett has a limit to when it becomes over valued

Muckit · 08-06-2012 2:57pm

telly_lover wrote: »

i consider 7000 per acre to be reasonable for land and id buy it at that if i could get it , even i never worked it , with a rental value of 150 euro per acre ,thats 2% yield , as good as most banks pay and i can sleep safe at night knowing a euro collapse wont hit me too hard in the morning

ps , what part of galway is that , is it near portumna ?

So you reckon €3000pa would cover the repayments? :rolleyes:

Galway/Roscommon border

bbam · 08-06-2012 2:57pm

telly_lover wrote: »

banks have no truck with emotional attachment so the farmers must have the cash

OK you seem hell bent on the notion that farmers are knee deep in cash. I'd say a few are but it's a small few. The banks are lending big time to farmers, I know this to be a fact.
Also my comment about the emotional value of land is separate to the banks issue, it's a combination of us being an island nation and our history.

reilig · 08-06-2012 2:58pm

telly_lover wrote: »

when you consider how land is making 10 k per acre and the average farmer only makes around 200 euro per acre per year , thats 2% yield , very few banks would be impressed with that kind of return , add in the extremley tight lending enviroment and the only conclusion i can come to is that a sizeable number of farmers are cash buyers and FF to them btw but they all cant be farmers who got windfalls for property during the boom

But that's not taking everything into account. You say that a farmer is only making €200 per acre. But like every other business,most farmers have loans. The repayment of these loans is paid out before profit per acre is calculated. In reality, nobody can speculate how much per acre farmers are making. Banks are offering loans based on ability to repay as opposed to profit per acre. There is a huge difference.

bbam · 08-06-2012 3:01pm

Muckit wrote: »

So you reckon €3000pa would cover the repayments? :rolleyes:

Galway/Roscommon border

Repayments?
He's obviously sitting on a wad of cash himself

bob charles · 08-06-2012 3:02pm

supply and demand is what influences the price. the supply side is if my head is still right around half a percent of total land. with such low supply then the prices will have to be high. Farm returns will never pay for a farm at the moment. most will leverage it and hope that the repayments are less that the rental value which they currently are not. Looks to me like we are following the Danish model. strap in as there is a rough ride ahead and plenty of bargins to be had yet.

bbam · 08-06-2012 3:23pm

I enquired about a small 15 acre plot near me, €14k an acre! Nice land but nothing but a crush for loading. I was thinking about €5k tops, boy was I wrong.

telly_lover · 08-06-2012 3:29pm

Muckit wrote: »

So you reckon €3000pa would cover the repayments? :rolleyes:

Galway/Roscommon border

borrowing to buy is another story and that location doesnt sound like tillage or dairying country

axel7 · 08-06-2012 3:30pm

If you look at it from the bank's view you can see why they're lending to farmers. They need to lend to someone to make a profit but there are very few suitable (secure) customers out there. If you look at farms they seem to be relatively secure. They've maybe 70% fixed income from payments (SFP, DAS, some forestry)- subject to 2013 I know. They'll more than likely have a lot of collateral in the form of existing land and buildings. The outlook for food prices is good to strong. Why wouldn't they lend to farmers when most other sectors (retail, construction, motor etc.) are out of bounds.

IMO land prices at the moment are not good value, I'd definitely prefer to go with maybe a 3-5 year lease and see where the market has levelled off at.

telly_lover · 08-06-2012 3:31pm

bbam wrote: »

OK you seem hell bent on the notion that farmers are knee deep in cash. I'd say a few are but it's a small few. The banks are lending big time to farmers, I know this to be a fact.
Also my comment about the emotional value of land is separate to the banks issue, it's a combination of us being an island nation and our history.

the emotional attachment explains our reluctance to sell land , it tells us nothing about farmers ability to buy it

i believe farmers have a lot more money than they let on which wouldnt be hard as they talk poor like no one else

telly_lover · 08-06-2012 3:36pm

axel7 wrote: »

If you look at it from the bank's view you can see why they're lending to farmers. They need to lend to someone to make a profit but there are very few suitable (secure) customers out there. If you look at farms they seem to be relatively secure. They've maybe 70% fixed income from payments (SFP, DAS, some forestry)- subject to 2013 I know. They'll more than likely have a lot of collateral in the form of existing land and buildings. The outlook for food prices is good to strong. Why wouldn't they lend to farmers when most other sectors (retail, construction, motor etc.) are out of bounds.

IMO land prices at the moment are not good value, I'd definitely prefer to go with maybe a 3-5 year lease and see where the market has levelled off at.

land went up by 15% in value last year which is quite something when you consider the state of the property market in general

the price of farmland in ireland defies all logic , the global economy is heading back into rescession , europe looks like it might crumble yet land is still booming , farmers are truly amazing creatures

Muckit · 08-06-2012 3:45pm

Thanks for that David McWilliams!

axel7 · 08-06-2012 3:47pm

telly_lover wrote: »

land went up by 15% in value last year which is quite something when you consider the state of the property market in general

the price of farmland in ireland defies all logic , the global economy is heading back into rescession , europe looks like it might crumble yet land is still booming , farmers are truly amazing creatures

..... and that is why I said land is not good value at the moment. Wait until it levels off.

You seem to have a serious gripe with farmers. Why ?

bbam · 08-06-2012 3:54pm

telly_lover wrote: »

i believe farmers have a lot more money than they let on which wouldnt be hard as they talk poor like no one else

Many farmers may be asset rich but have little cash to hand. To be honest your starting to sound more like a troll and less like someone whos looking for Information or willing to listen to the facts rather than your ill conceived beliefs.

telly_lover · 08-06-2012 4:02pm

bob charles wrote: »

supply and demand is what influences the price. the supply side is if my head is still right around half a percent of total land. with such low supply then the prices will have to be high. Farm returns will never pay for a farm at the moment. most will leverage it and hope that the repayments are less that the rental value which they currently are not. Looks to me like we are following the Danish model. strap in as there is a rough ride ahead and plenty of bargins to be had yet.

supply and demand doesnt apply as the demand was every bit as high six years ago when it was double the price it is now

i actually think land is a good investment as the demand for food is rising , the people with money worldwide are heading towards hard assetts , hence the rise in the price of prescious metals but in order to buy land you need money and judging by the price of it in this country , farmers most certainly have it

Land value Today

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