FOR THE last number of years the only people bidding at land auctions were farmers.
However, a new trend may be emerging following the sale of a 72 acre holding after an auction conducted by GVM’s Tom Crosse.
The buyer is a Limerick based business man purchasing for investment purposes.
Located at Acraboy, Monard, close to the Limerick / Tipperary border, it was formerly part of Ballykisteen Stud and is situated adjacent to the golf club, Monard village and Limerick Junction train station.
Mr Crosse describes the property as consisting of 60 acres of very good land and 12 acres that will need draining.
There are no buildings apart from cattle crushes. The land, which is fronting the N24 Limerick to Tipperary Road, is laid out in easily managed fields with good fencing and access to water.
The vendor is a Limerick city based businessman.
“The auction was attended by approximately 20 people. Bidding opened at €500,000 and quickly increased to €580,000.
“After a brief recess no further bids were received and attention turned to private negotiations,” said Mr Crosse.
A deal was concluded afterwards at a figure believed to be the guide figure of €650,000.
As the sale was concluded just days before Christmas, Mr Crosse reflected on 2013 which he described as “a very good year generally with most holdings selling under the hammer”.
Mr Crosse sold 1,100 acres of land for total sale proceeds of approximately €10m.
“Average price per acre for the Mid-West region in 2103 was €8,800. Good quality land is fetching up to €10,000 per acre and occasionally in excess of this figure in exceptional circumstances.
“Average or poorer land can fetch anywhere from €4,000 to €7,000 per acre,” said Mr Crosse.
Farmers are very much back in vogue and competing at most land auctions, he says.
“Banks are keen to lend into agriculture and this is also fuelling interest,” said Mr Crosse.
But what was interesting about the sale in Monard is that the farmers present were outbid by a businessman, who bought it for investment purposes.
A trend we may see more of in 2014. Mr Crosse confirms that he has been approached by some investors in recent weeks seeking such investments.
“The recent increase in DIRT Tax is also tempting investors into purchasing land. They can derive a reasonable ‘hassle free’ rental income sometimes tax free if they opt to enter a long lease.
“Land is also recognised as a very safe and secure investment that ‘they are making no more of’ and the possibility of some capital appreciation going forward,” said Mr Crosse.
2014 looks like being a very interesting one for Limerick auctioneers and we await the first auctions of the year with interest.
The news this Wednesday that Irish food and drink exports increased by over 9 per cent last year is sure to fuel land prices too.