The average price of arable land per hectare rose to over two million forints last year

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Last year, the average price of arable land per hectare rose to more than two million forints, although prices varied in different regions of the country, falling in Central and Northern Hungary, and rising in other regions. The highest average price of over HUF 2.2 million per hectare had to be paid for orchards and vineyards, which was not far behind the average price of arable land of HUF 2.13 million. The nominal rate of increase in the price of agricultural land slowed down to 2.6 percent in 2023, but a 22 percent correction in real terms followed the more than 25 percent drop in prices in 2022. The number of agricultural land transactions decreased further last year, according to preliminary data, the size of the areas changing hands did not reach 30,000 hectares, according to the MBH Mortgage Bank’s analysis. The value of the MBH Agricultural Land Index rose to 308.1 points last year from the level of 300.3 in 2022. The indicator, deflated with the agricultural producer price index, strengthened significantly due to the decrease in the agricultural producer price index, increasing from 112.5 points to 137.3.

Arable land rose in price the most in Western and Central Transdanubia

The average price of arable land increased by 7.1 percent year-on-year, which was less than the 10 percent measured in 2022, but exceeded the values ​​between 2019 and 2021. While the average price decreased by 5.5 percent in Central Hungary and 1.7 percent in Northern Hungary, the amounts to be paid per hectare increased in the other regions. In Western and Central Transdanubia, the price increase was the greatest, in both cases, you had to pay about 7.3 percent more for arable land. In Southern Transdanubia, the increase was around 7 percent, in the Southern and Northern Great Plains, prices increased by 4.6-4.7 percent. The highest average price of over 2.2 million forints had to be paid for a hectare of arable land in Southern Transdanubia, Central Hungary, the Southern Great Plain and the Northern Great Plain, while in Northern Hungary the price of a hectare of arable land was only 1.42 million forints. Among the counties, the prices were the highest in Tolna, Békés and Hajdú-Bihar, both hovering around HUF 2.5 million. The cheapest price was HUF 1.14 million in Nógrád, while the average price in Heves was HUF 1.36 million. Among the districts, Hajdúszoboszlói and Hajdúböszörmény were still at the top with average prices above 3.5 and 3.2 million forints per hectare, respectively. MBH Jelzálogbank’s analysts also examined how prices developed in favorable and less favorable counties as a result of changing weather conditions: Borsod-Abaúj-Zemplén, for example, has caught up strongly since 2010, but Szabolcs-Szatmár-Bereg was also able to observe a greater increase in arable land prices compared to the counties of Békés and Bács-Kiskun, especially in the period after 2015. When examined between 2020 and 2023, in addition to Szabolcs-Szatmár-Bereg and Borsod-Abaúj-Zemplén, Vas and Zala also increased in value compared to Békés and Bács-Kiskun.

Lands of better quality and larger areas became more expensive

Last year – breaking the pattern experienced in recent years – the higher quality arable land rose in price by 8-9 percent, i.e. more significantly, compared to the 2-4 percent increase in prices experienced in worse areas. The arable land prices per golden crown were the highest in Szabolcs-Szatmár-Bereg county, over HUF 180,000, while in Zala and Pest counties they were around HUF 150,000. In Nógrád, Békés, Fejér, Vas, Csongrád, Heves and Jász-Nagykun-Szolnok counties, the amount paid for a golden crown of arable land was under HUF 100,000. In terms of property size, the price increase in 2023 was 12 percent for areas larger than 10 hectares, 7 percent for those under 1 hectare, and 6 percent for those between 1 and 5 hectares. An average of HUF 2.4 million per hectare had to be paid for areas larger than 10 hectares, while HUF 2.2 million for areas under 1 hectare. The most expensive were the fields between 5 and 10 hectares with an average price of HUF 2.43 million per hectare, in which an 11 percent increase in price occurred in 2023.

Prices were also mixed in the various branches of cultivation

The average prices varied to different extents in the various branches of cultivation. While the prices of arable land rose by 7.1 percent, the prices of orchards fell by 1.3 percent. The prices of lawns, meadows and pastures mostly stagnated. The average price of forests and wooded areas increased by 2 percent, and that of vineyards by 3.6 percent. Among the branches of cultivation, the most had to be paid for a hectare of vineyards and orchards, HUF 2.2 million, which was not far behind the average price of arable land of HUF 2.13 million per hectare. The average prices of forests and wooded areas as well as lawns, meadows and pastures were almost the same, for the former 1.28 million forints and for the latter 1.31 million forints per hectare. Grapes were the most expensive in Southern Transdanubia – buyers paid an average of HUF 3 million for one hectare – and the cheapest in Northern Hungary, with an average price of less than HUF 2 million per hectare. Orchards were sold for the highest price in Central Hungary, for about HUF 3 million, and the lowest price per hectare, approximately HUF 1.8 million, was available in Northern Hungary. A hectare of forests and wooded areas, as well as lawns, meadows and pastures cost the most in Southern and Central Transdanubia, 1.34 and 1.69 million forints respectively, and the least in Northern Hungary, 900 thousand and 1.03 million forints. “The increase in the price of agricultural land may have been supported by the fact that in 2023, the value of crop and horticultural products per hectare increased by 2.5 percent, and the net income of entrepreneurs increased by 14.5 percent. The increase in the price of agricultural land over the last almost 20 years exceeded the increase experienced in the case of house prices and surpassed the BUX index, and among the instruments we examined, only the increase in the value of gold expressed in forints preceded it. In other words, agricultural land has a great value,” emphasized József Sánta, network director of the credit institution’s Agricultural and Food Business. He added: “At MBH Bank, our goal, as the leading financier of the agrarian industry, is to take our share of the financing needs related to the current phase of the land sale program in a manner worthy of our market weight. In the majority of cases, we can accept the loan request without a valuation in order to help our customers, for whom we also offer the Agrár Széchenyi Investment Loan MAX+ interest-subsidized product for the purchase in addition to a market-sourced agricultural land purchase loan.