According to experts, the demand for agricultural land has increased in the past year. There was more interest, especially among non-agricultural and small investors, who saw the land as a good protection of their capital from inflation. Agricultural land prices have also risen in the past year, the fastest in recent years. Farmy.cz reports growth of 16.1 percent to 294,326 crowns per hectare, according to rival company Agro 21, the price increased by 23.3 percent year on year last year.
Given the development of inflation, higher interest can be expected this year as well as further growth in agricultural land prices, according to information from Farmy.cz and Agro 21.
According to Farmy.cz, the share of non-agricultural investors in land transfers at the market price last year was 48 percent, which was seven percent more year-on-year. At the same time, their share steadily decreased from 2014 to 2019 in favor of farmers. The supply of agricultural land was slightly lower year on year.
“Due to high demand, land offered at affordable prices is sold faster than in the past. The selection of land offered for sale is thus significantly more limited. Land offers offered at excessively high prices usually remain on real estate portals,” Farmy.cz said.
According to Agro 21, especially in the second half of last year, many investors appeared, including smaller ones of around one million crowns, who were looking for a one-off investment in land. “We are seeing a part of the demand for residential real estate, which is already very expensive in many localities, spilling over into the demand for agricultural land,” said Miroslav Rytíř from Agro 21.
The most expensive land was in the vicinity of Prague, where people had to pay up to 40 crowns per square meter. Prices with over 30 crowns per square meter were achieved by areas with very fertile land, such as the districts of Olomouc or Hradec Králové. High prices have also traditionally been in localities on the borders with Bavaria and Austria, where, according to the Knight, the price is influenced by the demand of Austrian and German farmers.
According to Farmy.cz, the structure of foreign investors did not change much last year, with bidders from Germany predominating. “No significant interest in the purchase of land by investors from outside the EU was recorded. Nevertheless, it is appropriate, especially in times of increased global instability, to repeatedly draw attention to the minimum barriers for any foreign investors in the real estate market in the Czech Republic,” the company added.
Arable land, hop gardens, vineyards, gardens, orchards and permanent grassland are considered agricultural land.
The company Farmy.cz specializes in the sale of farms and agricultural real estate, Agro21 mainly deals with the purchase of land for farmers.
Source: Farmy.cz, Agro21 and CTK
