Are you facing the challenge of accurately assessing the value of your agricultural land? Valuing agricultural land is complex and depends on numerous factors. This article explains the key criteria and how you can achieve the optimal value for your land.
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The topic briefly and concisely
The soil quality, expressed by the soil index (7-100), is the most important factor for the value of agricultural land and its yield potential.
Location, infrastructure (transport connections, proximity to markets) and consolidation can affect the value by up to 15%.
Legal frameworks such as land use plans, nature conservation requirements, and EU funding programs have a significant impact on usage and value. [3,-]
The value of arable land and grassland has steadily increased in recent years. But what factors truly determine the price? From soil quality to location and legal conditions – a thorough valuation is crucial, whether for sale, leasing, or inheritance matters. We show you how to correctly assess the factors for valuing agricultural land and avoid pitfalls.
Soil quality as the foundation of assessment
The quality of soil is the decisive factor when assessing agricultural land. It significantly determines the yield potential and thus the economic viability. The so-called soil number, also known as field or grassland number, serves as an important indicator.
This metric is measured on a scale from 7 to 100 points. A higher soil number indicates better soil condition and promises higher yields. Factors such as soil type, nutrient content, and water retention capacity are included in this assessment. For example, arable land with values between 40 and 60 is considered good soil. []
Knowing the exact soil number is therefore essential for a realistic soil value analysis. The natural yield conditions, influenced by climate and landscape features, also play a role. This illustrates why two otherwise similar areas can have significantly different values.
Location and Infrastructure: More Than Just the Address
The location of agricultural land significantly impacts its value. Proximity to processing facilities and markets is an important factor. Short transport routes can enhance cost-effectiveness by up to 15%. Good transport connections and the general level of development are also crucial.
This includes well-developed access roads and ideally existing drainage systems or irrigation options. The distance to the operating base of potential tenants also plays a role. Consolidation, i.e., the shape and layout of the land, can increase management efficiency by up to 10%. An unfavourable shape, on the other hand, can lead to deductions of 5-8%.
The following aspects of infrastructure are particularly relevant:
Connection to the public road network
Presence of irrigation systems
Proximity to storage and processing capacities
Distance to regional and interregional markets
Digital infrastructure (e.g., for smart farming)
These factors should not be considered in isolation, as they strongly influence each other. A comprehensive market analysis of the property is therefore essential.
Regional market conditions and price developments
For years, the prices for agricultural land have been showing a clear upward trend. In Germany, the average price for a hectare significantly increased from around 11,800 euros in 2010. By 2022, the average price had already risen to 31,911 euros per hectare. []
However, there are significant regional differences. While in 2019 a hectare cost on average 11,656 euros in Thuringia, in North Rhine-Westphalia one paid around 54,000 euros. [] In Bavaria, the average value per hectare was as high as 77,305 euros in 2023. These price differences reflect the varying demand and the specific land valuation factors.
Population density also plays a role: In regions with high population density and the associated demand for housing, agricultural land is generally more expensive. [] The competition for land, even by non-agricultural investors, further drives up the prices. [] Therefore, a precise knowledge of the local market is essential for a realistic valuation of agricultural land factors.
Legal framework conditions and their influence
Legal regulations can significantly influence the value and usability of agricultural land. These include land use plans, nature conservation requirements, or specific funding programs. These regulations must be considered in every property valuation.
The Property Traffic Act, for example, regulates the sale of agricultural land. In many federal states, agricultural authorities have a pre-emptive right. The EU agricultural policy, with its subsidies and environmental protection requirements, also has a direct impact. For instance, subsidies for disadvantages in Natura 2000 areas can be granted.
Important legal aspects include:
Land use plans and development plans
Nature conservation requirements (e.g. FFH directives)
Water law provisions
Regulations of the Property Traffic Act
Requirements of the Fertiliser Ordinance
Heritable building rights or lease agreements with terms over 10 years
The complexity of these regulations often makes expert advice necessary. Especially in the case of contaminated sites or environmental aspects, significant devaluations can occur.
Further value-influencing factors in detail
Besides the main factors, there are additional aspects that influence the value of your agricultural land. The size and shape of the plot are noteworthy. Larger, well-shaped plots are generally more economical to manage and often achieve a price 5-10% higher per hectare.
The type of cultivation also plays a role. Land that is already farmed organically or is suitable for such can have an added value of up to 15%. Potential repurposing, for example, as building land, can multiply the value, although it is a complex process. [,] Land earmarked for development is already more valuable than pure arable land. []
Additional factors are:
Slope and exposure of the plot
Possible shading from boundary planting
Presence of wind power or solar energy potential []
Hunting and fishing rights
Encumbrances in the land register (e.g., easements)
A professional assessment takes all these details into account. Do you have questions about specific factors of your land? The Auctoa ImmoGPT chat can provide you with initial assessments.
Procedure for the valuation of agricultural land
Various methods are used for the valuation of agricultural land. The comparative value method is widely used. This involves using the actual purchase prices of comparable properties in the region. This method often provides a market-close value but requires an adequate number of comparable objects.
The income value method focuses on the sustainable achievable net yield. This is capitalized at an appropriate interest rate. Operating costs and market adjustment factors are included here. This method is particularly relevant when the land is to be used for agricultural purposes in the long term.
In certain cases, such as potential repurposing, the residual value method may also be applied. This involves determining the value from the difference between the expected total yield of future use and the necessary investments. The choice of the correct method heavily depends on the valuation occasion and the characteristics of the land. A professional valuation by Auctoa ensures that all relevant factors and the appropriate method are taken into account.
bewertung-agrarflachen-faktoren
The evaluation of agricultural land is a complex process that requires expertise. Numerous factors, from soil quality to location and legal conditions, as well as current market developments, influence the value. [2,3,] An average price increase of over 235% between 2002 and 2022 in Germany highlights the dynamic development. []
For owners, heirs, and investors, a precise and neutral valuation is essential to make informed decisions. Whether you wish to sell your inherited farmland or plan an investment: Do not rely on estimates. Use data-driven analyses.
Auctoa offers fast, objective, and AI-supported property evaluations. Request your free quote now and benefit from our expertise in evaluating agricultural land factors.
Additional useful links
landwirtschaft.de explains why agricultural land is becoming increasingly expensive.
The Federal Statistical Office (Destatis) provides tables on the purchase values of properties in Germany.
The Federal Ministry of Food and Agriculture (BMEL) provides statistics on lease prices and purchase values of agricultural land.
The C.H. Beck eLibrary contains a scientific article or legal commentary on property valuation.
The Federal Environment Agency discusses the environmental impacts of agriculture on soil.
The Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMUV) offers a final report on soil conservation.
FAQ
What is the difference between market value and income value for agricultural land?
The market value is the price that could likely be achieved under normal market conditions. The income value is based on the sustainable net income of the area, capitalized at an interest rate.
What role do lease agreements play in the valuation of agricultural land?
Existing lease agreements, their duration, and the amount of rent influence the value. Long-term contracts with below-average rental income can decrease value, while market-standard or indexed rents can support the value.
How does EU agricultural policy affect the valuation of agricultural land?
EU subsidies (direct payments), funding programmes for specific cultivation methods (e.g., organic farming) or environmental regulations (e.g., Natura 2000) can directly influence the yield situation and thus the value of agricultural land. [-]
What does consolidation mean in the context of agricultural land?
Arrondierung refers to the shaping, layout, and consolidation of plots. Well-arranged, large, and contiguous areas are easier to manage and therefore tend to be more valuable than small, fragmented parcels.
How can I obtain an initial assessment for my agricultural land?
For an initial, non-binding assessment, you can use online tools like the Auctoa ImmoGPT chat. However, for a detailed and reliable evaluation, it is always recommended to get an expert appraisal that takes all specific factors into account.
What impact does the ability to establish renewable energy plants have?
The potential for the establishment of wind farms or photovoltaic systems can significantly increase the value of agricultural land, often by multiples of the purely agricultural value. This depends on regional planning, grid connection possibilities, and approvability. []
