While Canadian farmland values posted serious year-over-year increases in most rural communities, lower commodity prices are expected to temper appreciation in coming months, according to a report released today by RE/MAX.
The report highlighting trends and developments in 17 rural communities throughout Canada, found that limited inventory levels — reported in virtually all agricultural centres — continued to contribute to strong upward pressure on the price per acre in 88 per cent of markets examined. Peak commodity values and low interest rates created the ideal climate for expansion over the past 12-month period, spurring unprecedented demand for farmland. Strong grain prices and relaxed Saskatchewan farm ownership regulations bolstered buyer enthusiasm in the first half of 2013, creating unprecedented demand for farmland in East Central Saskatchewan. Farmland values reached new heights in many communities, with the price per acre climbing to as high as $2,000 to $2,500 for prime B and C grade parcels in areas such as Balcarres and in communities north of Yorkton. Overall market conditions remained relatively balanced year-over-year, with supply meeting demand. Larger parcels — over 50 quarters — are coveted, with demand driven primarily by out-of-province investor groups, including some from Toronto and Van- couver. Private individuals and well-organized corporate investment groups have been serious players in the East Central Saskatchewan market for several years, with many realizing significant returns in terms of peak commodity prices and rapidly escalating land values. More than 100 properties are currently listed in East Central Saskatchewan, ranging from poor pasture lands to prime B and C parcels, with approximately 10 to 12 per cent of those farms priced at $1 million plus.
In the interim, overall demand is expected to remain stable, while price per acre holds relatively steady in East Central Saskatchewan.