Land prices hit record high of €81,500 per hectare in the Netherlands

Agricultural land prices hit a record 81,500 euros per hectare in the first half of 2024, realtors’ association NVM reported. Due to the strong demand for land from the agriculture sector itself and for housing construction, the NVM expects the increase in land prices to continue unabated.

Dairy farmers, in particular, are buying more land, the NVM noted. In the first half of this year, 41 dairy farms changed hands, nine more than in the same period in 2023. “The increase in the number of transactions is due to the phasing out of the derogation scheme, which puts an end to the Dutch exception to spread more manure,” the NVM said. “As a result, farmers are looking for extra land to dispose of manure and are buying available companies more often, preferably with permits.”

“At the same time, land remains in high demand - depending on permit applications - for housing projects, infrastructure, sustainable energy, or as an investment,” the NVM said. The Netherlands has a massive housing shortage and the government aims to build 100,000 new homes per year to resolve that. All those extra homes require extra infrastructure and facilities. The Netherlands is also transitioning to sustainable energy sources, and the equipment needed to generate renewable energy, such as wind turbines and solar panels, requires space.

And due to the ever-increasing prices, land remains an attractive investment opportunity. “Arable land is approaching the 100,000 euro mark per hectare at an average of 94,000 euros,” NVM said.

NVM brokers assess the saleability of agricultural land at 9.0, 0.2 points higher than in the second half of 2023. “The shortage is also increasing,” NVM said. “61 percent of brokers see the relationship between supply and demand tightening further.”