Hey there, time traveller!
This article was published 10/9/2012 (1385 days ago), so information in it may no longer be current.
FARMLAND prices in Manitoba have soared to record highs in the wake of an unprecedented demand from expansion-hungry farmers eager to cash in on high grain prices, industry officials say.
In its 2012 Farm Edition report released Monday, RE/Max said productive grain land in southwestern Manitoba -- the only local area covered in the report -- is selling for an average of $1,350 an acre.
That up about 35 per cent from two years ago, when the average price was about $1,000 an acre, and up 286 per cent from 15 years ago, when it was about $350 an acre, said Ian Anderson, a real estate agent/appraiser with RE/Max Valleyview Realty in Brandon.
And the price escalation isn't limited to just the southwestern corner of the province.
"They (grain land prices) are going up all over Manitoba," said Stacey Hiebert, co-owner of Canada Farm Realty in Steinbach.
Hiebert said prices have been climbing by an average of about 10 per cent a year for the last three or four years in most areas of the province. In southeastern Manitoba it's been even more than that because there are more land-intensive livestock operations there, which drives up demand.
He said grain land there is selling for between $1,900 and $2,300 an acre.
Claude Jacques, a local appraiser with Farm Credit Canada (FCC), the country's leading agriculture lender, said a variety of factors are driving up land values, including rising demand, limited supply, low interest rates and high grain prices.
Jacques said FCC's fall Farm Land Values report, which will be released on Oct. 9, will look at how much prices have increased in different areas of the province.
"You've got some areas where price are significantly higher and others where it will be a little less."
The RE/Max report, which looked at prices in 16 markets across the country, said they're up almost everywhere while supply is tight across the board. It said selling prices per acre range from as low as $800 to $1,500 in northern Saskatchewan to as high as $40,000 to $60,000 in British Columbia's Fraser Valley.
The report said most farms don't even make it to the open market, with many being sold between neighbouring farmers. Those that do get to market usually sell in less than a month.
The report also said it's not just farmers who are snapping up farmland these days.
"Investment funds are taking a hard look at farmland... with well-known asset managers calling farm returns among the best investments out there," said Gurinder Sandhu, executive vice-president and regional director for RE/Max Ontario-Atlantic Canada.
But Sandhu said that hasn't provided farmers with added incentive to sell their land.
"In fact, the reverse is true, with many looking to further amass parcels of land and expanding existing operations."
Hiebert said that's certainly been the case this fall in Manitoba.
"Guys are hanging on to what they have. It (the value of farmland) is not going to go down, and the outlook for agriculture is good. So they want to keep it for a little bit longer."
Hiebert and Anderson also said while institutional investors may be snapping up farmland in other parts of the country, there's been little evidence of that happening in Manitoba.
NUMBERS TO PONDER:
$1,200 to $1,500 -- average selling price for grain land in southwestern Manitoba
$1,900 to $2,300 -- average selling price for land in southeastern Manitoba
$1,000 -- average price of grain land two years ago in southwestern Manitoba
35 -- percentage increase since then
$350 -- average selling price 15 years ago in southwestern Manitoba
286 -- percentage increase since then
$800 to $1,500 -- lowest average price per acre among 16 Canadian markets surveyed by Re/Max; that was in northern Saskatchewan
$40,000 to $60,000 -- highest average selling price per acre, in the Frazer Valley.
Sources: Re/Max, Re/Max agent/appraiser Ian Anderson, and Canada Farm Realty co-owner Stacey Hiebert