Re: Re: Welcome to Ireland’s ugly urban sprawl

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@Irish Examiner wrote:

Read between lines on land prices

LIES, damn lies and statistics – this week’s agricultural land sale figures for the first quarter of 2005 might give credence to that old saying. And the low per acre figure given nationally might well have more to do with loading of value onto residences, rather than land in an attempt to avoid the onerous stamp duty rate of 9%. The tight parameters, which would exclude land sales over a €14,000, is also a main reason for the overall low figure, and the exclusion of younger, qualified farmers from the stamp duty levy may also be part of the reason for the low average figure of €6,568 per acre. While the average price per acre was up on the first quarter of 2004, prices were down 11% in comparison to 2004, say the CSO.

The average per acre figure was derived from a total of 668 transactions over the year. The number of excluded transactions was 151, and these covered land sales under €500 per hectare or over €35,000 per hectare. The lower exclusion figure works out at €202 per acre and is deemed to be a non-market value representing sales to family and friends. The higher figure works out at just over €14,164 per acre which, many auctioneering practitioners will contend, is the average price paid for land in the southern half of the country. The average price given by the CSO might hold water when you take a mean between poor land in say, Roscommon, and the best of Golden Vale pasture, but when you look at the breakdown, there is still a large anomaly between the listed figures and those given as sale prices every day of the week.

Last year’s average for the South-West region, given as €6,825 per acre, is way below the average that most auctioneering practitioners quote as their rule-of-thumb average. And sales in a large number of cases have been consistently higher than the exclusion level, which would lead one to assume that they don’t register in the figures presented to the CEO. However, they haven’t ruled out raising that threshold in future releases, says Kevin Keady of the Agriculture section of the CSO, adding that their reluctance to do so was because of the damage to comparability with previous years statistics. And there are may be other factors at work behind this low mean figure, in particular the land valuation process.

Of the 151 sales excluded for the overall sales figure in 2004, that proportion was less than 20% of the total sales figures, which would not alter the final per acre figure significantly, say the CSO. The CSO figures are extrapolated from the Particulars Delivered (PD) form sent by solicitors to the Revenue Commissioners as part of the assessment of stamp duty. This in turn is sent to the Valuation Office, who in turn send the computed figures to the CSO. This figure only includes public sales and doesn’t cover inter-family transfer, which means that overall the number of transactions is just 0.1% of the overall land held in the country.

To be fair, the CSO are the first to say their results are based on voluntary processing of the Particulars Delivered form used by solicitors in a transaction, and that private sales slip through their net. But it still doesn’t get away from the fact that real life valuations for land have increased substantially, especially post-CAP as the agricultural market adjusts, and the exclusion figures should reflect that inflation. Likewise, the actual price paid for development land is now so far away from the baseline figure of €14,164 that it’s irrelevant, except in the published figures of farm sales. Any future assessment of farming in Ireland will be to some extent based on this tabulations, so their accuracy is of paramount importance.

Rose Martin © Irish Examiner

Any thoughts?

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