The latest survey conducted by Real Estate Alliance (REA) has revealed that 59% of farmland buyers used their own cash reserves to buy their property, while over 34% negotiated a part-mortgage. The figures are a surprise, as it was expected that land buyers would return to bank borrowing as money from development land and road CPOs from the boom years had dried up.
The survey also revealed that other sources of funds used to purchase farmland property included pension funds which accounted for 3.8% and forestry investment fund which accounted for 2.9%. But there is speculation that most of the funds stem from the buoyant dairy sector.
According to auctioneer Eoin Dillon of REA Dillon, milking is generating quite a lot of cash, leaving healthy reserves in the accounts of dairy farmers, especially those who formed themselves into companies. “Many of these farmers expanded their herds and infrastructure before milk quotas were abolished in 2015,” he says. Dillon adds that businesspeople with a family connection to the land are additionally ambitious to own land once they have the cash at hand.
Farmers accounted for over 70% of farmland buyers. Local farmers comprised over 58% of successful customers in the REA survey, with non-local farmers making up a further 8.6%.