To give us an overview of the land market situation, the Estonian Land Board compiles statistics on land transactions in Estonia. The agricultural land is no exception. The Land Board statisticians compiled a report that was based on transactions in 2017. In addition to the number and total value of transactions, the report also included an overview of different factors that influence the value and price of agricultural land in Estonia by county. Let’s take a closer look at the prices and see, where in Estonia was the most expensive and cheapest agricultural land price per hectare last year.
How many transactions were made with Estonian agricultural land and in what value?
First, let’s look at the transactions. Last year, there was a total of 1253 agricultural land transactions made in Estonia. It is 10.8% less than in 2016. In total, 38.2 million euros worth of transactions were made with agricultural land, which is 6.9% less than in 2016. Considering that the decrease in the number of transactions is greater than the decrease in the total value of transactions, the average transaction price has increased – exactly by 4.3%. The majority of transactions were made in Lääne-Viru (163), Tartu (118) and Viljandi County (106). The least amount of transactions were made in Hiiumaa (22) which is also the smallest county in Estonia.
On what basis do we compare agricultural land prices?
Only transactions that meet the free market conditions were included in the price statistics of agricultural land in Estonia. Transactions affected by business relationships or relatives were left out. Transactions that involve land with development in addition to agricultural perspective were also left out as it makes the price disproportionately high. Furthermore, land up to 2 hectares was also left out, because crops are most likely grown for personal use. Thus, only land plots in accordance with the use of agricultural land were compared.
The price per hectare is not compared based on the average price of all transactions (which leads to a disproportionately high average in case of a few very expensive transactions), but the median price. It is a price point, where half of the transactions were made at a higher price per hectare and the other half at a lower price. Therefore, it gives a more realistic overview of the county’s average price level.
Where is the most expensive and cheapest agricultural land in Estonia?
The lowest median prices per hectare are in Lääne County and Hiiumaa – less than €2,000. This is due to lower soil fertility as well as smaller land plots. In 2017, the highest median price per hectare of agricultural land was in Jõgeva County – €3,406 per hectare. Järva, Põlva, Lääne-Viru, Tartu and Viljandi County, where the agricultural land parcels are larger and have more fertile brown soils, also stand out with the price of more than €3,000 per hectare.
Where does the difference in prices come from?
The price of Estonian agricultural land is shaped by many different factors that you often wouldn’t think of, but that can be seen in statistics. The most common and well-known factors are accessibility and soil fertility. Statistics Estonia points out that the average median price per hectare is higher when selling a larger agricultural land. Land, that has been listed in the ARIB register of agricultural land parcels is also more expensive because for this land ARIB grants can be applied for. Another factor that most likely shapes the price, is whether there are ditches on the land. The price per hectare of agricultural land without ditches is almost €300 higher compared to the one that has – no matter the location of the ditches.
What do statistics show about agricultural land prices in different counties?
In conclusion, if you have a smaller agricultural land plot located in Western Estonia with lower soil fertility, the sale price per hectare is lower. If you own agricultural land with fertile brown soils in Central Estonia, you have a better chance to get a higher price – especially if you are selling a large agricultural land parcel.
If you would like to sell agricultural land in Estonia – make us an offer. We have extensive experience in land transactions and we offer a fast transaction and a good price.