How is forest property value assessed?

There is no such thing as a hectare price

One of the most common questions forest owners ask is what a hectare of forest land is worth. There is no single answer. Two neighbouring ten-hectare properties can differ significantly in value, and both valuations may be correct.

A forest property combines three main sources of value: the standing timber, the future growth potential of the forest and the characteristics of the land itself. Access, restrictions and management conditions then determine how that value can actually be realised.

What a buyer actually looks at

Standing volume and assortment distribution. The volume of standing timber and its division into sawlogs, pulpwood and other assortments have a direct effect on value. The same volume can have a very different value depending on tree species, dimensions and quality.

Species, age and site index. Site index describes the productive capacity of the growing site and helps indicate how well a particular tree species can grow there. Age and site conditions also affect how soon a stand may reach maturity.

The share of mature forest. Mature stands generally contribute more immediate timber value, while younger and middle-aged stands carry more of their value in future growth. Both matter, but they are valued differently.

The value of young forest. A planted and properly tended young stand also has value. Previous regeneration and tending work, the condition of the stand and its future growth potential are all taken into account in the assessment.

Access. The condition of forest roads, year-round accessibility and forwarding distance affect harvesting conditions and costs. Properties that can only be accessed or worked under specific seasonal conditions may be valued differently.

Drainage. The presence and condition of drainage systems affect both forest growth and management conditions. Poorly functioning drainage can limit access, reduce growth and make forestry operations more difficult.

Restrictions. Protected areas, water protection zones, woodland key habitats, Natura 2000 areas and other restrictions affect what can be done on the property. Restrictions do not automatically make a property unsellable, but they can affect its use and value.

Size, shape and consolidation. The size, shape and consolidation of a property affect how efficiently it can be managed. A single compact property is generally easier to manage than several separate parcels.

Where the data comes from

Much of the initial assessment can be done before a site visit.

• The cadastral reference is the key identifier for the property and is used to retrieve cadastral and other public information.
• Forest Register inventory data provides information on stands, including tree species, age, standing volume and site index. Forest inventory data is valid for ten years from the date it is entered in the Forest Register.
• The Land Register provides information on ownership, co-ownership, mortgages and other registered encumbrances.
• The Land and Spatial Development Board's map applications provide information on cadastral parcels, access, protection zones and other spatial restrictions.

A site visit is used where the available data needs to be verified or the actual conditions may affect the assessment.

How to tell whether an offer is fair

Ask what the price is based on. A well-founded offer should explain the standing volume used in the assessment, the expected assortment distribution and whether young forest and other relevant factors have been taken into account.

Get more than one offer. Comparing two or three offers gives you a better basis for judging the market value of the property than relying on a single figure.

Look beyond the price. Check who arranges the notary, how transaction costs are divided, how long the offer is valid and whether any other conditions apply.

What to do before you sell

1. Check that the ownership details in the Land Register are correct.
2. If the property is in co-ownership, discuss the sale with the other co-owners before requesting an offer.
3. Check the age and validity of the forest inventory data in the Forest Register.
4. Check whether there are valid forest notifications, regeneration obligations or other restrictions affecting the property.
5. Gather any information you have about recent forestry work, such as harvesting, planting, tending or drainage work.

We assess the property using Forest Register data, restrictions, access and other relevant information, and visit the site where necessary.

For properties up to 10 ha, we make an offer within 5 working days; for larger properties, within 10 working days.