Is farmland the next big housing market trend?
A recent report from Farm Credit Canada (FCC) showed that the average farmland value in Canada rose nearly 7% in 2018. In 2017, farmland value rose 8.4% and in 2016 it rose 7.9%.
In Ontario, the average value of farmland rose by 3.6% in 2018 and 9.4% in 2017, according to FCC.
The northwestern region experienced the highest average increase in values at 7.6%, followed by the southeastern and south-central regions with increases of 6.7 and 6.2%, respectively.
“Increases in these three regions were attributed to upward pressure from large intensive livestock operations, urban buyers and more specifically the imbalance between high demand and a limited supply of available land,” FCC wrote.
“As in the past, a mix of transactions were recorded, including private and real estate-brokered sales, auctions, tenders and intergenerational family transfers.”
The northern and eastern regions of Ontario remained unchanged.
The majority of Ontario’s overall farmland value increase was fuelled by demand for supply-managed farm operations, cash crop producers, and investors. Within each region, FCC said, land values fluctuated. For example, there appeared to be less appetite for land from dairy producers in 2018.
Favourable soil types – allowing to grow vegetables and ginseng, for instance – were popular among buyers. Some areas in the north central region of Ontario also experienced significant farmland value increases due to urban pressure and land purchases for future development.
With that in mind, is farmland a niche market worth getting into?
Castanet.net reported that the 2018-2019 growth rate may not be as large due to ongoing canola trade issues with China.
FCC said that farmland values generally gain the most when:
- Interest rates are low and
- Crop receipts are high or are expected to get higher. “Buyers will pay more for land they estimate will generate a higher return,” FCC wrote.
However, if you did decide to work in the farmland sector – or another niche market – property data could help you achieve your goal.
By using a tool like Purview – which gets its data from the Province of Ontario Land Registration Information System, POLARIS – you could look up past ownership records of farmland across the province, see the current property details, such as the legal landowner, estimate the property value, and more.
POLARIS registers all property sales, including private deals and exclusives. Use it to find your niche property needs, including farmland.
Learn more about Purview’s property tools today. Call 1-855-787-8439 or visit www.purview.ca.
Purview is just one of Teranet’s Financial Services Solutions; stay tuned for our upcoming portfolio unveiling!