Farmland prices could rise by 6% in 2024, according to the Society of Chartered Surveyors of Ireland (SCSI) and Teagasc.

The increase will arise from an expected recovery in milk prices, facilitating continuing demand from dairy farmers, as well as continuing interest from non-farming investors, they say in a new report.

The increase will not be uniform. Land prices are expected to rise by 4% in Leinster, 11% in Munster and 5% in Connaught.

The forecast increase in land prices in 2024 will be lower than the increases of recent years, the authors say. This moderation is because of lower returns from farming and higher bank interest rates.

They note that 2024 will prove very challenging for tillage farmers in particular and that weather conditions will continue to be an important uncertainty for the remainder of this year.

Report findings

The survey found that average prices for non-residential farmland in 2023 was €9,300/ac. This was up 11% on the average of 2022. The national average for poor quality land was €6,286/ac while good quality land was €12,308/ac.

The most expensive county was Waterford where average prices were €20,000/ac. The next most expensive counties were Tipperary, Kildare, Meath, Carlow and Cork. While the least expensive land was in Mayo where large holdings of over 100ac of poor-quality land sold for an average of €2,733/ac.

The survey forecast that the average land rental prices will rise by 4% in 2024. The increase will be 7% in Munster, 6% in Connaught/Ulster but average rental prices will fall by 1% in Leinster in 2024.

It found average rental price increased by 5% nationally last year. The increases were generally small in Leinster and Connaught/Ulster.

However, in Munster, rental prices rose by 19% for grazing land and by 9% for cereal ground, or by an average of 12%.

The increase in rental prices was not as high as predicted, Peter Murtagh, chair of the SCSI’s rural agency committee said. “These increases did not materialise due in the main to poorer overall returns in farming and very poor weather conditions which dampened demand from some farming sectors – particularly in Leinster and Connaught/Ulster – and kept a lid on rental inflation.

No significant change

The report says that there was no significant change in the volume of land sold last year and that executor/probate sales were the main source of farmland sales.

The survey is based on data from 129 SCSI members who operate as land auctioneers and valuers. This is the 11th survey produced.