land prices

[malleefarmer]

seem Canadian land only heads one way here in aust prices ease there way up and down depending on commodity prices and yields etc

Land in my patch has come back 10 to 20% depending on land quality and improvements.

My whnge is its stuffs up your equity through no fault of your own, im sure some will say if you paid to much for your land and it falls "go suck a fart"

But being here on family farm since 1913 and slowly adding and NOT buying at the peak of about 8 years ago my balance sheet was wonderful now then just average now but in Canada were land keeps rsing you guys aint got that problem.

Im sure some of you like me agree land should go up and down but not massive swing, some blue ribbon country not that far away from here 100kms $1550 per acre and could produce 1.5 tonnes of wheat to the acre yes acre , well a run of dry springs and frost its back to $900 my best mate is in a bit of trouble because of it lost his capacity to borrow cause hes worth less on paper.

hope someone responds logically
just chewing the fat on a hot day

[freewheat]

Now wait a minute! My banker says land here has been retracing. And no, land does not simply go up forever. It has risen and crashed before.

I agree, some areas seem immune to land corrections, but Canada is a big country, what happens in central Alberta, doesn't happen everywhere.

Heck, our land prices are less than HALF of what they are 40 miles west of us. AND WE HAVE BETTER SOIL AND NORMALLY BETTER CLIMATE.

Tough to generalize...

[stonepicker]

Ya, last downturn in land prices in western canada was the late 80's, right now goin for around 3,000. a broke acre here in my area. Could be a downturn coming, pretty tough paying off high-priced land like that. I was in australia this past winter, beautiful country where i was. I think australians are more patriotic than canadians.

[sumdumguy]

Mallee, it's minus 11 Celsius here and heading down to minus 25 in a couple of days just saying.

As for land prices rising continuously here, I can't see land staying at these levels for long if returns stay low. Land has tanked here before. We bought $750/acre land in 1981 to watch it's value decline to the $325-$350 range and stay low until 2007. Yep, we sweated out a few years. Lentils and Canaryseed were our liferaft.

[Daylate]

Investors in our area are out now. They can't generate a return at what farmers are willing to pay for rent. Too many people wanting out and not enough getting in or getting bigger. I think in the near future it's peaked and is at a maximum for land productivity and being able to own it in your career. Good land in the right spot will remain at the peak. But anything else will take a hit. Just my point of view from my corner of the earth.

[SASKFARMER3]

Investors have slowed down or pulled to the sidelines. In our area is farmers picking up touching quarters or ones they always dreamed of owning!

[farmaholic]

It will happen. A correction, not a collapse. Keep some powder dry. I wish I was 20 years younger....

[malleefarmer]

I guess I got confused with everincreasing rent over there just presumed it was because land was rising and you guys talk of land bubble bursting seemed it hasn't and wont.

I was wrong thanks for correcting me.

A chilly 33c tomorrow creeping up to 42 on Saturday for valentines

[Guest]

stone picker , 3000 an acre , really ? is that just a few guys with old money now showing whose boss or is that really where the market is ? even at 3% interest that's $90/ac just for interest ? doesn't make much business sense as a farmer or investor . new combines , sprayers , drills , etc at $400,000 each makes even less sense ??? . I'm sure the investors don't go that high and I bet oilpatch guys that had to much money, don't anymore . is it really still selling for that ? just wondering ? I find around here half of it is bs . one rental agreement was bragged about at $85/ac , now truth comes out it was $65 /ac . latest one was $75 or- , but turns out there was shop , pole shed and bins thrown in with the land rent .
mallee , just curious how many , bushels , tons, tonnes of , #1 wheat , whatever you market in there , would it take to buy a an average quarter of land ? in this area it is about 45,000 bushels # 1 hard red spring wheat at today's ave area price

[farmaholic]

The longer the rumour of a sale or new rental agreement circulates the higher the "assumed" values get. Ask the sources if they're willing to talk.

Every area has it's own micro market forces that drives prices and rents.

[jake550]

One fairly decent sized farm sold east of Regina just lately for $2050 a cultivated acre. That is down from $2400 in the immediate area on multiple other sales during the last year.
In my opinion it's got a long ways to drop yet before it makes sense.

[blackpowder]

Minus 15C.
My question for my area is this. With all my landlords over 70. And rents at 3-4% of market.
What's it gonna look like in 25 years?
Rented to owned ratios in district hard to guess. Increases with size of course. Boomer equity roll still coming. Talked to investment firm other day. Their still interested in Alberta. Willing to take % of revenue leases in "low" margin years.
So maybe the only thing to correct values would be flood of market from estates wanting the cash or a prolonged commodity crash. Maybe the only time land is expensive is when rental roi falls below market interest?
Not much changing hands here lately. One quarter at $1000 / ac over nearest bidder not good example. Basically still steady at $3000 /ac and $90-120 rents. Double what is 60 miles south. The fact isn't that no one is buying. The reality is that no one is selling.

[blackpowder]

After reading. Two things always amaze. How my area is over the years the most expensive as ratio of production. And how guys in lower value areas keep denying.

[jake550]

There are ALWAYS reasons why land is "cheap" in some areas. No, the grass isn't greener because the land is cheap.

[ajl]

Mallee if you are coming here to pay the big bucks you can probably buy the entire province of Sask right now. Then you could run it the way you want to.