Price expectations recover sharply in both the non-residential and residential sectors, but they still remain negative in the latter area Demand for commercial farmland rebounded during H1 2009, while residential farmland demand continued to fall sharply Surveyors are reporting that large scale commercial farmers are still keen to expand production, particularly onto neighbouring farms.
However, foreign demand, particularly from Irish farmers, is reported to have dried up.
On the residential side, life-style buyers continue to withdraw from the market, possibly because of jobs cuts and lower year end bonuses in the City.
Supply continued to fall sharply in both sectors indicating that neither commercial farmers or lifestyle owners are under sufficient financial pressure to sell.
As a result, commercial farmland prices (bare land) have remained broadly flat during H1 2009 whereas farmland containing residential property has seen prices fall.
Indeed, the RICS opinion-based measure (which covers bare land) shows a relatively modest fall in farmland prices in H1 2009. Farmland price(per hectare) H2 2008 H1 2009 % difference Arable 13,182 13,085 -1 Pasture 11,490 11,260 -2 Weighted average 12,336 12,172 -1 The RICS transaction-based measure (which includes residential farmland) shows a larger fall in farmland prices.
On this measure the weighted average price of farmland fell from 16,342 to 15,114 (a 7.5 per centfall).
The larger falls in the transaction-based measure probably reflect the relative weakness of the residential farmland market compared to the commercial side.
Confidence in the price outlook turned positive in the non-residential sector, having been sharply negative during H2 2008.
In the residential sector, price expectations improved significantly from the extreme lows reached in the previous half year, but they remain slightly negative.
