Regina Housing Market.

[farmaholic]

News report says its cooling. Competitive. If you want to move it, start with a lower asking price....hmmmm.

Remember when houses were selling for more than their asking prices? Sellers market.

Will farm land prices suffer the same fate? Will rents drop? Could be tough times ahead in some parts of Western Canada. Sometimes high commodity prices can't compensate for dismally poor production.

[hobbyfrmr]

[QUOTE=farmaholic;349255]News report says its cooling. Competitive. If you want to move it, start with a lower asking price....hmmmm.

Remember when houses were selling for more than their asking prices? Sellers market.

Will farm land prices suffer the same fate? Will rents drop? Could be tough times ahead in some parts of Western Canada. Sometimes high commodity prices can't compensate for dismally poor production.[/QUOTE

No.
They're not making more farmland.
Somebody has to feed the world.
You just have to be efficient. Grow more volume at a lower cost and the rent will get paid.

[iceman]

No
Not until a major credit crisis in Ag happens.
Rents could drop by 25% and they would still be too high.

Iceman Out

[hobbyfrmr]

I read an FCC article title something like "Not all farm debt is bad".
I didnt take the time to read the article.
A credit crisis in Ag would be devastating in so many ways. Nobody wins, farms dissolve, equity dissolves, landlords dont get good rents, young people lose interest if farming is not going to pay them a proper living salary.
You end up with a bunch of old, cheap, curmudgens driving shitty outdated equipment paying out as little as possible. Its very hard to profit from these type of folks. The industry suffers. They need profit to create jobs and income tax payers.

[Oliver88]

This is overdue for Saskatoon and Regina.
Cold prairie cities with artificially inflated home prices due to low interest rates, zoning/subdivision bylaws, CMHC granting larger mortgages than would otherwise be approved and other subsidies.

Should a home be worth 2-3 times more than a quarter of land?

[farmaholic]

I went back and found this old post I made....

"Just a thought.....

At the end of the day, with a small owned land base, if all you did or were able to do is farm a pile of high rent dirt, lease or buy expensive quickly depreciating iron, and support companies with the ever increasing costs of goods and services but have no more equity to show for it than when you started.....why bother?"

When are the Primary Producers going to wake up?




City housing prices.... Some DINKS(Dual Income No Kids(married without children)) can probably afford those prices. Or two professional salaried people with kids probably could too. Maybe some self employed person(their own business) with a working spouse also can. Please read the above quote and maybe that is why "farming only" families seem like they can't afford the luxury homes.... It's not the fact they don't make alot of money.... they just don't/can't keep enough of it. Probably pretty hard to build a farm AND build and live in a mansion at the same time.

[Hopalong]

A generation or two ago, a good guarter of farmland was often about the same as a new house
New house today is often twice as large and costs more than twice as much as a quarter.
Better comparison might be acre of farmland versus square foot of house.

[farmaholic]

Just to be clear.....I don't think the first place to see a reduction in costs to the Producer should be the land rent....UNLESS IT IS A NON-FARMING INVESTOR'S/SPECULATOR'S LAND....then I don't care if its the first!!!!! A bit biased....I might be.

Maybe when I bought land I looked at it the wrong way.....like someone on here said...farmland is not for farming, its for investing in. I guess I bought it with the wrong intentions/endgame in mind. Foolish me!

Now farmland is cheaper to rent than buy....probably like buying versus renting a house in the big city....but zero equity at the end of the day.

That news report also stated that if you bought a house in Regina two years ago and need to sell it now----you will likely lose money. I think I know..... (I better not finish that because my predictions of the last three to five years hasn't materialized and I don't want someone telling me if I repeat the same prediction long enough the odds of it coming true get better-lol).

[sumdumguy]

It was much better for young farmers to establish when farm land prices were related to productive margin. These rediculously low interest rates and false consumer statistics have resulted in speculative mentality. And yes there is more land being broken, just go up north just to Big River, for example. What about all the pasture land not far south of Regina that has been brought into production, probably many other examples like windrows bull dozed, sloughs drained, etc? Just saying.

[farmaholic]

Re foolish me: I didn't have millions to dump into land like foreign investors through investment shell companies or extremely successful Canadian business people that invested in farmland but never made even a nickle "farming" farm land . I had/have to make it pay for itself through down payments, making payments and maybe subsidizing it with paid for land.....not paid in cash!

But just imagine the value of the capital injection into the province of Sask that happened because of the change in farmland ownership rules. But at the prospective young farmers expense. Good for the retirees I guess. Now they only have to sell two quarters to buy that nice house in the big city!

[FertaCloud]

I remember saying in 2011 we were due any day now for at least a 25% housing correction in sk. Shows wtf i know. Still think its coming, but with no serious intersest rate hikes on the horizon, when is anybodies guess.

[sumdumguy]

I think the government finally is starting to raise interest rates. Monetary policy is sure way to dampen house prices and put a lid on rising consumer debt. RV sales have never been more robust, maybe something to do with cheap gas too.

[Rareearth]

Not sure why every one wants housing to crash? Or should I say a soft landing?

That's similar to asking for more or less rain,luckily that's mother natures call. Housing, interest rates with government manipulation that's dangerous, always unintended consequences that might cost Ag a bundle?

Markets, industry, etc everything is a cycle, like it or not, that's how markets work. Personally I prefer limited government intervention that benefits all tax payers and Canadian infrastructure. I don't care what housing prices are in certain locations, there has always been these discrepancies and distortions always will be.

[fjlip]

Agree, when land was cheap we were POOR and made SFA from farming/grain.
Land is always EXPENSIVE to buyers that farm, was same for us in the 70's. All got paid.
It is a LONG term deal, need luck too, many lost it all in the 80's.

[farmaholic]

Rareearth: I guess a person's level of satisfaction with the real estate market direction depends on if you want to hold em, fold em or buy em. I sure am happy with farm land appreciation but it sure makes it ugly to buy now.

What exactly do you mean by this statement: "costing Ag a bundle".

I agree with the cycles thing. But people who think that real estate can't or won't correct are only fooling themselves. Also would have to say trends always seem to be up over the loooooong term. But if you buy at the peak, make sure you have enough "time" to see it recover by the time you have to sell it if there is a correction. Part of me would like to see a "reality check" in land prices. I'm not selling so it wouldn't matter to me. I believe it really has gone past the point of making sense. No doubt Sask had some big time catching up to do but the economics of farming it at those prices isn't there. Subsidize that excellent "investment" at today's prices.