The cost of land is set to continue to rise due to increased competition, according to a new report from the Institute of Professional Auctioneers and Valuers (IPAV).

The annual farm survey, published today (Wednesday, March 5) shows that some regions are expecting to record growth in land prices of between 5 and 10% in 2025.

The report shows that the average price for agricultural grazing land reached €13,949/ac in 2024, up 8% from €12,840/ac the previous year.

The average price for land with forestry rose by 7.8% to €6,407/ac, up from €5,940/ac. The average price for letting land by con-acre stood at €268/ac.

IPAV said that long-term grazing leases averaged €299/ac and tillage ground came in at €304 per acre per year.

The report said that in 2024, the Irish land market remained "dynamic", with prices driven by supply constraints, strong demand from dairy farmers, high beef and sheep prices, and growing investor interest.

IPAV noted that farmers "made their presence felt in the land market", particularly in the final three months of the year and were "happy to go toe-to-toe with business buyers and investors in the auction rooms".

Pat Davitt, IPAV chief executive said that supply has been constrained by traditional factors such as farmers wanting to keep land in the family.

He also cited newer trends such as the movement towards long-term leasing and the increasing footprint of solar farms.

“At the same time competition has intensified with the forthcoming Nitrates Directive, and increasingly land being viewed as a tax efficient vehicle for wealth transfer.

“Beyond that there are of course regional factors that vary across the provinces," he said.

While forestry prices are still increasing, Davitt said that such land comes with "many risks" which came into sharp focus during recent storms.

He said that some form of subsidy will be needed for the second and further plantations, otherwise it will be very difficult to encourage farmers and investors to buy into additional forestry.

“Recent storms wrecked many forestry crops and the price paid for timber by sawmills has dropped dramatically due to the availability of so much windblown timber.

"This will leave the price of forestry land struggling and will likely cause the government programme of planting trees to come close to standstill," he said.

In its provincial breakdown, the IPAV report said that Munster land prices continued to remain high in 2024 with auctioneers reporting between €12,000 to €20,000/ac being paid for grazing land.

The overall average for the province comes out at €17,262/ac, but some exceptional sales saw farming ground make up to €40,000/ac.

"It must be remembered that dairying is the backbone of agriculture in Munster and incomes which declined sharply in 2023 rebounded as sharply in 2024," the report said.

The price of forestry land in Munster was much stronger in the province in 2024 than previously and could be bought for between €4,500/ac and €8,500/ac.

On the rental and leasing front, grazing ground was fetching an average of between €280 to €400 per acre, with tillage land making from €300 to €400 per acre.

In 2024, the report noted that farm sales in Leinster were "a tale of two regions".

Auctioneers in the northern part of the province report a good supply of land and a lively market whereas auctioneers in the southern counties saw supply remain static or tighten.

A rough overall average price for land in the province comes to €16,259/ac, grazing land made an average of between €13,300 and €20,000/ac while some headline sales saw land make up to €36,000/ac.

Forestry ground made an average of about €7,000/ac while the lease price being paid for grazing land averaged between €245 and €400/ac.

Tillage ground in Leinster commanded, on average, between €275 and €340/ac.

IPAV said that in Connacht, the Agri-Climate Rural Environment Scheme (ACRES) is "heavily subscribed" and when combined with long-term leasing it means that there is less land making its way to market.

While the overall average price for farmland in the west is around €10,000/ac, some sales saw land make up to €20,000/ac.

Grazing land averaged between €8,000 and €12,000/ac while planting land made from €5,000 to €6,500/ac.

Grazing ground for rent was making between €200 and €300/ac, while tillage ground was making between €200 and €350/ac.

Most of the IPAV auctioneers based in Ulster noticed a slowdown in the supply of land and a market with little movement.

"Larger established farmers are strong buyers while younger farmers have difficulty entering the market where prices are driven by a combination of supply shortage, increasing prices for milk, sheep and beef and where they are competing with the buying power of farmers with an off-farm income," the report said.

The average price of land in the province came to €12,625/ac while prices varied between €10,000 and €15,000/ac with some sales well exceeding that.

Forestry land was making an average of €5,500/ac, varying from €4,000 to €7,000/ac. Rental land was making between €150 to €300/ac.