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According to data from the statistical institutions of the Baltic States, in 2020 one hectare of agricultural land in Lithuania cost on average 4,127 euros, in Estonia – 3,553 euros, in 2019 in Latvia – 3,922 euros.
“At the beginning of the investigation period, in 2011, a hectare in the Baltic countries cost just over 1000 euros. Since then, its price has risen every year, and Lithuania, which previously led Latvia in 2015, outperformed the most expensive land in the competition. I don’t think anything is going to change in this market in the near future; land is a finite resource, so its demand is under constant pressure. Furthermore, the existing EU payment system and evolving agricultural technologies mean that the real yield per unit of land is constantly increasing, so completely rational reasons for the increase in land prices are sufficient. If we add additional factors, such as good expectations, an increasing amount of free money and the popularity of real estate, we will conclude that the price of land is likely to grow in the long term, ”said Vytis Žegužauskas, Client Director Luminor commercials. .
According to him, the price of land in the Baltic countries is also correlated with performance indicators: fixed jumps in prices in 2012, 2013 and 2015 coincide with better-than-normal performance and, consequently, higher incomes. of farmers.
“There are about 3 million hectares of arable land in Lithuania, about 1.8 million hectares in Latvia and less than one million hectares in Estonia.
It would seem that a lower supply in Estonia should lead to the higher price, but on the contrary, land in Estonia is cheaper. This is due to several factors. In Estonia and Latvia, a large proportion of farms are dedicated to dairy production, so the need for more fertile and therefore more expensive land is less.
The price difference is likely to increase further in Lithuania as the land gradually consolidates into larger massifs; the market value of such areas is higher. In Estonia, the consolidation of land areas has progressed further, while in Lithuania this process has been very long for various reasons, including the nuances of land restitution and stricter regulation of the market, ”said V. Žegužauskas .
