The price of farmland in most Canadian markets has either held steady or increased this year, following a period of strong year-over-year growth. Mirroring the trend in residential and recreational property values, lower crop prices, floods and challenging winter weather conditions have failed to significantly impact the Canadian agricultural real estate market.
There is significant variation in price and productive capacity of farmland across Canada. Macroeconomic factors impacted prices to a degree; however, practical considerations such as the proximity to a processing facility or prospective buyer’s existing operations drove individual transactions.
The real estate market in western Canadian markets remained strong, with prices in parts of British Columbia both the highest and lowest in the country. Dairy farms in the Chilliwack-Fraser Valley area sold for up to $63,000 per acre, while bare land in Peace River North—which is closer to Yellowknife than it is to Vancouver—sold for between $750 and $1,550 per acre.
In Alberta, short supply left many family farmers ready and willing to make a deal at a moment’s notice. Tile drained land sold for as much as $10,000 per acre in southern Alberta, which represents a 20 per cent increase over the previous year. The value of scrubland and other non-productive land in Canada’s most prosperous province also climbed, buoyed by demand from well-off urbanites seeking the tranquility of the countryside.
Demand was softer moving through Saskatchewan and Manitoba. Although challenging growing conditions jeopardized profitability for farmers, sale prices actually rose modestly to between $950 and $2,200 per acre. Listings have stayed on the market for months and in some cases, years.
While prices across Ontario have started to level off, the value of farmland in some pockets rose significantly. North of the Greater Toronto Area, agricultural land slated for development reached $54,000 per acre. In Chatham-Kent, excellent soil quality boosted the price of farmland up to $25,000 per acre—representing a surge of as much as 40 per cent over the previous year.
While this represented a boon for sellers, it was a barrier to expansion for some buyers. The rising prices led to a small migration of farmers, particularly Mennonites, northeast to areas including Quinte and Renfrew County where comparable land sold for between $8,000 per acre and $12,000 per acre.
Nova Scotia’s Annapolis Valley experienced modest growth over the first nine months of 2014. The relatively small market has seen an increase in the number of vineyards, which have played a role in boosting prices to $10,000 per acre in some areas.
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