The price of agricultural land which hit a record breaking €70,000 per acre in the west, is unlikely to drop despite the uncertainty in farming, the new president of the IAVI has said.
John Dawson, who took over the presidency of the Irish Auctioneers and Valuers Institute last week, said there had been an exceptional growth in the agricultural property market in recent years. He was speaking against the background of a spectacular price of €70,000 an acre being paid for 11.5 acres of land at Kilconly, eight miles north of Tuam, Co Galway.
While the local auctioneer involved, Martin Tyrell, was at pains to point out there was no major development potential for the land, it sold for €785,000.
Mr Dawson, who runs his real estate business in Tullow, Co Carlow, said the price of land looked set to increase especially as 40,000 acres had been taken out or earmarked for road schemes over the next few years.
"As the economy grows, land values will grow accordingly. If the economy slows down, then I think there could be a cooling-off period in the agricultural market but in the long term I do not see prices plummeting," he said.
"Land will always be a scarce commodity and scare supplies always command value," he said in an interview in the Irish Farmers Journal.
"Although profits are declining in farming, there is still no major desire from farmers to let go.
"Amid challenging times, there has been no major increase in the amount of land made available for letting or a rise in the number of land sales in this region which means farmers are still holding on," he said.
Auctioneers across the country are reporting major interest in farmland but many say that those who are buying land now are seldom full time farmers.
Most are either part time farmers, hobbyists or people in the building trade who are seeking land with an eye to developing it later for building purposes. Agricultural land in Kildare is currently making €50,000 an acre and the price paid for the Tuam land is thought to be a record not only for the west but for the entire country.