Farmland prices around the country continue to tick up, with international buyers flocking here to tap relatively low prices and relatively high appreciation.
As reported in CREW last September, traditional farmers are facing bidding wars against investors and developers. With adverse weather conditions affecting crop yields globally, demand for Canada’s produce is growing and farmers naturally want a slice of the action.
But they are now facing growing competition from deep-pocketed foreign buyers.
“The global desire to ‘bury money in the ground’ is not without merit,” says Gurinder Sandhu, Executive Vice President and Regional Director, RE/MAX Ontario-Atlantic Canada. “Investment funds are taking a hard look at farmland as a result, with well-known asset managers calling farm returns among the best investments out there.
According to Statistics Canada, the average price of an acre increased by more than 15 per cent in the last three years with Ontario, Quebec and Manitoba recording the biggest hikes respectively.
“I listed an 11 acre farm on Monday and it sold today (Thursday),” says Dean Manton, a RE/MAX agent in Guelph. "That is how quick farmland moves now."
He says the average price of an acre in the Kitchener-Waterloo area has increased by up to 35 per cent in the last 12 months, reaching record levels of up to $18,000 each.
With farmland prices escalating globally due to increasing demand for food, experts fear an impending “barn bubble,” especially in the U.S. and the U.K.
Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate