Variability identified as a key theme for agricultural land prices
By Amanda Brodhagen, Farms.com
In 2013, farmland values in Southwestern, Ontario increased approximately 22 to 25 per cent, according to a study produced by London-based Valco Real Estate Appraisers and Consultants.
They found that the increases were consistent with what they’ve seen in previous years dating back to 2010 – when farmland prices skyrocketed to historic levels. Ten counties were assessed in the study including, Huron, Middlesex, Oxford, Elgin, Kent, Lambton, Essex, Bruce and Grey.
The top counties, with the largest average annual increases since that time, include Bruce County, Lambton County and Elgin County with a 27 to 38 per cent increase. Within those counties (county divisions) the largest increases include, Elgin East, Huron North, and Lambton North. Some of the highest sales in 2013 for those areas ranged from $20,000 to $25,000 an acre.
In other areas of the province, land prices continued to be high, especially in “strong quota/livestock” areas. These counties included the areas of Huron, Perth and Oxford. Ryal Parker, notes that quota has acted as a stabilizing factor in these areas despite lower commodity prices.
The author of the Valco report predicts that variability in agricultural land values will become the new norm. He says that buyers and sellers should expect the range in values to be “extreme” with 50 per cent ranges, and even 100 per cent ranges are possible. In addition, he forecasts that there will likely be fewer sales and more lists and seller expectations will outpace buyer willingness to purchase more land.
The real estate firm has been conducting studies of Southwestern Ontario farmland values since 2010. The full report can be read at http://www.valcoconsultants.com/.