Land value: where investors are hunting up agricultural land prices

Land value: where investors are hunting up agricultural land prices

A look behind the numbers: Agricultural land Where investors chase the field prices up In Berlin, the government invites angry farmers to the agrarian summit. They feel left alone by politics – also because many can no longer afford their own land. Guilt is the run on agricultural land. Depending on the state, prices have risen tenfold. In the meantime, people have become accustomed to these record-breaking cascades: Prices have risen again, and even skyrocketed, depending on the state even up to ten times. This time, however, these figures do not show, as so often, the explosion in rental or purchase prices of real estate. But of something that has apparently little to do with the price madness of the big cities: agricultural land. Data from the Federal Statistical Office show that prices for agricultural land in Germany have almost doubled since reunification. This does not include building or inventory. There are clear regional differences. While agricultural land in the old federal states costs more than twice as much as it did after reunification, prices in the east are more than four times higher than 1991. This is mainly due to the prices in Mecklenburg-Vorpommern, which have increased almost tenfold, and those in Saxony-Anhalt, which have quadrupled. In absolute terms, however, prices in West Germany remain higher (see graphs). The farmers are not behind the farm boom. On the contrary, they see themselves as victims of development. That is one of the reasons why many of them traveled to Berlin this Monday to sue the Federal Government. The “agrarian summit” is about the multitude of regulations that make farmers feel harassed, but above all about the feeling of being left alone by politics. At least with regard to agricultural prices, this accusation is not entirely unjustified. The buyers who push prices so high are often investors in search of returns. These exist practically only in risky forms of investment such as shares. Even real estate can no longer be regarded as low-risk in times when the warnings about a real estate bubble are piling up. As a somewhat down-to-earth relatives of the property, Agarland is just right: at the gates of expensive cities, less glamorous, less returnable, but stable. Andreas Tietz, agricultural expert at the Thünen Institute for Rural Areas, speaks of a “very safe investment”. How many transactions are exactly on the account of investors, is not recorded. But there are indications. For example, Thünen researcher Tietz has stated that in the meantime every third East German agricultural enterprise is owned by a non-resident investor. The real estate boom makes farmland a speculative object. What’s behind the risky business and how investors benefit from rising prices. from Heike Schwerdtfeger, Martin Gerth Investors, who literally hardly know where to go with their money, are often faced with individual farmers who do not have such a big capital cushion. The higher the price of land rises, the more prohibitively expensive is the landlord among them. What’s more, for tenants, new owners often raise their leases to meet their return expectations. In line with the purchase prices, the rental prices have almost doubled in recent years. With regard to the agricultural land, the farmers, after all, have traveled to Berlin with just a little hope: Minister of Agriculture Julia Klöckner had already postulated in advance that “farmland in the hands of farmers” belonged. But how to implement the catchy slogan is so far unclear. To methodology The prices per hectare are the average prices paid for the land that changed ownership in one year. They result from the general price trend on the real estate market, but they are also influenced by the quality and location of the properties that were sold or bought. The Farm Structure Survey From 2010 farms with at least 5 hectares, 1999 to 2007 with at least 2 hectares of utilized agricultural area (UAA) or with special crops or herds, if established Minimum sizes are reached or exceeded. Source: Destatis According to Klöckner, farmers should be given greater opportunities when land is sold. However, they already have a legal right of first refusal. However, this can be leveraged relatively easily. Often, investors not only take over the country, but also the company to which the country belongs so far. In that case, neither an authorization is required nor the right of first refusal becomes due. And, to a certain extent as the icing on the cake: there is no land transfer tax due. Nevertheless, the lamentations of the farmer falls short, as agrarian expert Tietz of the Thünen Institute explains. His argument: on the one hand not only investors suffer from the zero interest, but also wealthy farmers. They therefore enlarge their space instead of investing the money elsewhere – thus contributing to rising prices. On the other hand, the housing market is also reflected in agricultural prices. Because cities need more building land, they buy this from the farmers. However, they are only allowed to keep their profits tax-free if they invest them again in agricultural land. Especially in Bavaria, where building land is scarce, now agricultural land is only very limited available, so that the prices here rise to astronomical heights. Nevertheless, Tietz expects nationwide an end to the price explosion in agricultural land. In the face of climate change, harvests of unpredictable and agricultural land would be less secure. The German farmers fight against a new fertilizer ordinance. The new regulation could promote innovations – and ultimately benefit the farmers. Now on wiwo.de You want to know what drives the economy? Click here for the latest articles of WirtschaftsWoche. © Handelsblatt GmbH – All rights reserved. Acquire usage rights?
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