How much does agricultural land cost and how to set the prices?

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How much does agricultural land cost and how to set the prices? Prices range between1500- 4500 euro / ha, depending on factors such as legal status, size, post-acquisition costs, the merging degree of the parcels.

Those who sell land are usually individuals who do not have the financial capacity or the necessary equipment to exploit them.Those interested in buying the land, are associations working the land, or foreign investors who accumulate and merge large areas that are resold.

Agricultural land prices have increased in the last two years by about 50% .Prices for agricultural land ranges from 1,500 euros per hectare to 4,500 euros per hectare, depending on several factors such as the legal status of land, size of locations, post- acquisition costs the merging degree of the parcels or topography.

The most expensive land in Romania, is found in the Western Plain, on the secondary market, meaning that segment accounted for a surface between 50 and 1,500 ha and are tabulated and have cadastral situation (“CF”).

There, a hectare costs between 3500-4500 euros. In the same region, the primary market (parcels between 1 and 10 ha), with land title and non-tabulated, prices vary between 2,000 and 2,500 euros per hectare.

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The supply of agricultural land for sale is divided in two types, depending on the size of the sites, as medium and small land areas (up to 100 ha) and large (over 100 ha). Thus, this market is generally divided into two major sections.

The first segment is the primary market, a segment including small plots of land (1-10 ha) generally “entitled”, and the second segment, the secondary market including merging parcels of land between 50 – 1,500 ha generally recorded in the Land Register.

“Entitled” land costs less

Price is influenced by the legal status of agricultural land. So, mostly, such land transactions are carried out involving all plots that are “land registered” (tabulated and cadastral case) and to a lesser extent for “entitled” plots.

In recent years, farmland bidders sold “acquisition projects” of land surfaces consisting of up to 1,000 ha of agricultural land called “cores” – “land registered”, characterized by a very good merging and “future land “- having land titles, represented by a size of approximately 2000 ha, located in the vicinity of the cores, which can be acquired in the future (within 2-4 years) in order to form a big zone of action, which is of higher interest for companies  that work the land or tenants.

Thus, future land purchases are made by the ”acquisition projects” bidders,  knowing well the location, easily negotiating with sellers of small “entitled” parcels, which then are tabulated and form areas with good merging degrees, that later are sold to “core” buyers.
Prices for “entitled” land are smaller because in this case there are subsequent purchase expenditures involving registering costs.

The merging degree, 10% of the price differences

The merging degree of parcels is a key factor influencing prices. This is an estimated percent representing a level of proximity between land parcels. The merging degree is actually a market perception as the closest are the land parcels, the easier is to work the land and thus the land has a higher value.

There are four merging degrees (under 40%, between 40% and 60%, between 60% and 80%, and the best and largest is 80% -100%) and price differences between them are on average 10%.

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Who is buying agricultural land?

Potential buyers of agricultural land are usually divided into two categories, as local companies / agricultural associations and investors whom are foreigners.

Local companies and agricultural associations are those that exploit the land. They have already bought medium and large areas of land and want to increase the merging degree by buying adjoining parcels of different surfaces. In addition to land held by this group of buyers, they have other large areas of land leased from land owners who do not work it.

So, this group is interested in buying or renting adjoining land, while investors buy mostly large and very large areas, but they do not always work the purchased land, the ultimate goal being to acquire and amass large areas later to be sold.

If you are looking to buy land end your search here: because there will certainly be a plot for you .

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