CKD Galbraith’s Farm Sales Forecast For 2016
CKD Galbraith announced today that firm’s farm sales for 2015 showed significant growth over the previous year but that the firm expects to see more considered pricing in the general farmland market in the year ahead.
Farm sales figures for 2015 reveal that CKD Galbraith sold in excess of £60.5million worth of agricultural property throughout the year, totalling some 16,980 acres. This is an impressive 30% increase in acreage sold compared to 2014 and a rise of 13.5% in sales value. The firm also sold 57,092 acres of Scottish estates in 2015 with a sales value of just over £30.7million.
Duncan Barrie, senior associate at CKD Galbraith, commented:
Looking back at 2015 the commercial farm market in Scotland remained remarkably strong despite poor cereal, potato and milk prices and confusion and uncertainty about recent CAP reforms. However, more marginal arable and livestock units proved to be slightly more difficult to sell, largely due to recent fluctuations in commodity and livestock prices, which created difficulties for farmers trying to obtain finance.
Moving into 2016 buyers and sellers of commercial farms are cautious of the downturn in commodity prices therefore the firm are advising that realistic pricing will be key to successful selling this year.
CKD Galbraith partner Simon Brown said:
The main factors influencing the farmland market this year are sensitive pricing and the quality of the land. A good, well equipped arable farm in a desirable location will always sell and we expect the demand to remain strong from both farmers and investors. Investors are rarely put off by low commodity prices and the dips we have witnessed in 2015 are unlikely to affect agricultural property prices to any large extent. However, the price gap between the different regions of Scotland will result in the market becoming increasingly polarized. CKD Galbraith’s localized teams of staff are extremely well placed therefore when it comes to accurate regional pricing.
While the commercial farmland market has been very buoyant during the recession, the countercyclical nature of the industry has started to show signs of decline in the demand for all but the very best arable farms, as well as upland farms that can be planted for commercial timber. We do not expect to see a dramatic fall in prices, but farms brought to the market at asking prices that are ambitious will generally fail to find buyers, which is a predicament not faced by the land market for a number of years.