Belgium’s farm land market stagnates after 5 years of growth
Sunday, 28 July 2019
The farm land market in Belgium did not see any growth during the first semester of 2019.
The market has seen a lot of growth over the last five years, but it has had a bit of a dip recently, according to a study by Fednot (Notary Federation) presented during the Libramont Agricultural Fair on Sunday.
“The property market saw a lot of growth during the six months of this year, but the land market did not. Prices have also stabilised. But it is very difficult to draw conclusions from only six months of data,” said notary Renaud Grégoire.
Belgium had experienced massive land price increases over the last few years (22.9%).
Farm land cost on average 44 euros per hectare during the first semester of 2019, which is a 3.9% drop compared to the same period last year.
The average price per hectare in Wallonia was 32 euros during the first semester (a 1% drop). But these figures hide big disparities between the provinces. The average price in Brabant Wallonia was 41 euros and it was 25 euros per hectare in the Luxemburg province.
The study also highlithed a number of “smaller parcels of land” (one hectare or less) coming onto the market. “The average size of the plots on sale is decreasing, because bigger pieces of land are coming onto the market less often.”
Several factors may explain this pause in growth; The reform in farm renting, which comes into effect in 2020, means potential buyers are waiting longer to take the plunge. Low interest rates is another factor.Land owners are hesitant to sell if it means they will end up placing the money into a savings account with interest rates that are even lower than inflation.
“There is much incertitude about the future of farming, investing in land remains complicated,” said Grégoire.