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

JohnBoy · 08-06-2012 4:57pm

I saw it explained recently how farmers justify the cost of buying land in a business plan.

(no interest for round figures)

Johnnie owns 100 acres, all paid for. Therefore his business has no land costs.

If johnnie buys 40 acres at 10 grand an acre over ten years that's 400k, or 40k a year or 1k per acre, per year.

So he'll never be able to pay that off from the 40 acres.

But he has 140 acres, which reduces his per acre per annum figure to €286 per acre, per year.

Which is much more manageable.

In ten years time he buys another 40 acres, for 10 grand an acre over ten years, should cost him 1k per acre per year but can also be viewed as €222 per acre per year.

Those are figures that can be made work in a business plan.

telly_lover · 08-06-2012 4:59pm

axel7 wrote: »

..... 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 ?

ive already said fair play to those who can afford land at 10 k per acre , im asking questions , that doesnt mean i have a gripe , not at all

telly_lover · 08-06-2012 5:00pm

bbam wrote: »

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.

if farmers are cash poor , how can they afford to pay 10 k per acre for land

Bogger77 · 08-06-2012 5:17pm

telly_lover wrote: »

if farmers are cash poor , how can they afford to pay 10 k per acre for land

it's obvious in the post you're referring to that it's borrowing the money, over 10yrs.

Troll fail

Tipp Man · 08-06-2012 5:31pm

From a banks point of view I can't think of any asset that they would lend money for which is more secure than Irish land. There is very little of it for sale and there are always people interested in buying it. It must be the ultimate collateral as it holds its value and it can be very liquid if the bank needs to sell.

It's a no brainer for banks really. Especially as nowadays you'd need what 25-30% deposit. That will more than cover any potential drop in land.

From a farmers point of view the justificiation is you spread the cost over the entire farm - no only over the piece you buy.

I think that land will maintain its value around the 10k mark - certainly for small pieces

telly_lover · 08-06-2012 5:47pm

Tipp Man wrote: »

From a banks point of view I can't think of any asset that they would lend money for which is more secure than Irish land. There is very little of it for sale and there are always people interested in buying it. It must be the ultimate collateral as it holds its value and it can be very liquid if the bank needs to sell.

It's a no brainer for banks really. Especially as nowadays you'd need what 25-30% deposit. That will more than cover any potential drop in land.

From a farmers point of view the justificiation is you spread the cost over the entire farm - no only over the piece you buy.

I think that land will maintain its value around the 10k mark - certainly for small pieces

was any more land sold in 2002 when land was nowhere close to 10 k per acre ? , the irish economy is in much worse shape than it was back then

bbam · 08-06-2012 6:54pm

telly_lover wrote: »

if farmers are cash poor , how can they afford to pay 10 k per acre for land

Oh god this is unbelievable. Are you ten years of age of something?
They are often asset rich which acts as collateral for borrowing the money. They then make the payments on the profit of ther whole farming enterprise. It doesn't mean they have a stash of cash to buy the land. It's not a difficult theory, really it's not.

reilig · 08-06-2012 7:06pm

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

Land fell by 35% between 2008 and 2010

telly_lover · 08-06-2012 7:24pm

bbam wrote: »

Oh god this is unbelievable. Are you ten years of age of something?
They are often asset rich which acts as collateral for borrowing the money. They then make the payments on the profit of ther whole farming enterprise. It doesn't mean they have a stash of cash to buy the land. It's not a difficult theory, really it's not.

i understand all that but farm incomes have not doubled in real terms since 2002 yet land is much more expensive

banks dont lend to non viable business,s no matter how much collatoral they have , they want to see reasonabley impressive earnings potential

telly_lover · 08-06-2012 7:25pm

reilig wrote: »

Land fell by 35% between 2008 and 2010

from 20 k per acre

Tipp Man · 08-06-2012 7:58pm

telly_lover wrote: »

was any more land sold in 2002 when land was nowhere close to 10 k per acre ? , the irish economy is in much worse shape than it was back then

Whats the point your trying to make??

you have made several posts which don't seem to have a point to them only that land is dear in ireland - the dogs in the street know this

Assets go up and down in value all the time - quite often the earning potential of an asset is not the reason for the level of price or the change in price - prime topical example is facebook shares valued at over $30 - pure nuts but there was a market for them

telly_lover · 08-06-2012 9:36pm

Tipp Man wrote: »

Whats the point your trying to make??

you have made several posts which don't seem to have a point to them only that land is dear in ireland - the dogs in the street know this

Assets go up and down in value all the time - quite often the earning potential of an asset is not the reason for the level of price or the change in price - prime topical example is facebook shares valued at over $30 - pure nuts but there was a market for them

my point is not that land is dear , my point is that farmers have a lot more money than they let on , ive no problem with farmers having money or anyone else for that matter , its just funny how most farmers go on about having none , when ryanair is doing well , michael o leary shouts it from the rooftops

land is dear now in historical terms but cheap compared to what it was my making in 2007 but heres the difference

in 2007 , builders were still in the game and banks were a whole lot less prudent when it comes to lending , builders are now completley out of the picture so speculation is no longer a factor and banks are tight with lending to the point of being neurotic yet farmland prices still appears to be on the rise and has not fallen anything like the rest of the property market , this strongly suggests to me that farmers are at least putting down large deposits when spending 250 k on 25 acres , something likes 80% of loan applicants are being turned away right now in the housing market and if commonly held beliefs are true , most of them earn more than farmers , regardless of the increase in the price of beef and milk this past two years , the line about farmers using existing collatoral is a bit spurious as the average farm in ireland is quite small and most people dont like using their house or homestead as security , banks are reluctant to use it either

bbam · 08-06-2012 9:39pm

I don't think there is any point to all this other than mouthing on about land values and farm incomes but no real point to make.
Well there was some point made about farmers being great about talking about being poor.
Usual farmer bashing nonsense.

telly_lover · 08-06-2012 10:08pm

bbam wrote: »

I don't think there is any point to all this other than mouthing on about land values and farm incomes but no real point to make.
Well there was some point made about farmers being great about talking about being poor.
Usual farmer bashing nonsense.

thats not farmer bashing , thats a mere observation , farmers tend to potray themselves as poor

Muckit · 08-06-2012 10:12pm

telly_lover wrote: »

farmers tend to potray themselves as poor

It's all a smoke screen. Minted the lot of them. Where ther's muck theres luck. Mattresses near the ceiling. That woman that had the money in the lining of her curtains was a farmer i bet

bbam · 08-06-2012 10:59pm

Muckit wrote: »

It's all a smoke screen. Minted the lot of them. Where ther's muck theres luck. Mattresses near the ceiling. That woman that had the money in the lining of her curtains was a farmer i bet

Look. I find if you get large denominations and spread them out well they hardly put a lump under the mattress. We tend to stuff them into the pillows on the spare room too.
OP is right, I thought we could keep it under wraps but the pressure of hiding so much cash is tough.

Farmer Pudsey · 09-06-2012 8:45am

Most of the sepulation in land at the moment is by farmers with big farm payments. As the next SP will be acerage based they are willing to buy land for to secure there present level of payment rightly or wrongly. Most of the land sold in this area in the last 2 years has benn bought by a couple of farmers with large SP.

You got to remember about land, they are not making any more of it, you do not have to paint it, most land only only comes for sale once in 3 lifttimes (200 years) and it is only dear the day you buy it.

The price of land is base on milk returns not on beef returns. An efficient dairy farmer could have a margin of 700 euro+/acre this changes the maths completely. However at present it is beef farmers are buying. Also the more land you own the better your ability to generate money to buy more. If you look at it from an accounts view it makes no sence.

Going back to the couple farmers buying neither of them will be selling bubble no bubble.

On one last note how many posting about the price of land being too expensive have ever bought land or there parents????

telly_lover · 09-06-2012 12:39pm

Farmer Pudsey wrote: »

Most of the sepulation in land at the moment is by farmers with big farm payments. As the next SP will be acerage based they are willing to buy land for to secure there present level of payment rightly or wrongly. Most of the land sold in this area in the last 2 years has benn bought by a couple of farmers with large SP.

You got to remember about land, they are not making any more of it, you do not have to paint it, most land only only comes for sale once in 3 lifttimes (200 years) and it is only dear the day you buy it.

The price of land is base on milk returns not on beef returns. An efficient dairy farmer could have a margin of 700 euro+/acre this changes the maths completely. However at present it is beef farmers are buying. Also the more land you own the better your ability to generate money to buy more. If you look at it from an accounts view it makes no sence.

Going back to the couple farmers buying neither of them will be selling bubble no bubble.

On one last note how many posting about the price of land being too expensive have ever bought land or there parents????

they werent making anymore land twenty years ago either yet it wasnt making 10 k per acre , thats a cliche

tommylimerick · 09-06-2012 12:55pm

it s only small lots of land making 10k a acre
theres a farm for sale in cork for the last 9 months
with 115 acres with a top bid of 600k at the moment
also a 70 acre farm near me went for 450k
a couple of weeks ago

telly_lover · 09-06-2012 3:29pm

tommylimerick wrote: »

it s only small lots of land making 10k a acre
theres a farm for sale in cork for the last 9 months
with 115 acres with a top bid of 600k at the moment
also a 70 acre farm near me went for 450k
a couple of weeks ago

was that the one near charleville ?

Land value Today

Comments