The difference between Farmland and Urban land prices in Canada has long puzzled investors. While urban land prices are generally high, farmland values are low. However, this distinction does not hold true across Canada. In this article, we will compare and contrast the values of farmland and urban land. We will also explore how land prices in each region vary. We will explore why farmland prices are higher in some regions than in others.
Urban land prices are high
Those who live in Canadian cities often ask why urban land prices are so high. A lot of people in the country love the excuse that there is not enough land to build on. Real estate developers, politicians, and even academics support this argument, but it’s simply not true. Land is scarce, and this excuse doesn’t apply to every city. It’s true for Toronto, Calgary, Edmonton, and Vancouver.
While prices vary significantly across Canadian cities, they generally follow the same pattern. The main differences are economic bases and the relative affordability of these locations. For example, metropolitan areas based on manufacturing and financial services have seen prices rise while resource-dependent cities have experienced flat or declining prices. And, during a spike in the price of natural resources, the latter have seen higher prices. If you’re wondering why Canadian urban land prices are so high, consider the following factors:
The supply-side constraints of urban land can be problematic. Canada’s housing prices have been pushed up by a lack of development in some areas. Moreover, a recent report by BMO questions the assumption that supply constraints are the culprit behind the rapid house price inflation. The price differential between residential and non-residential real estate has reached more than 15 percent. The supply-side constraints for housing development in Canada are also acute. In fact, the Canadian housing market is not much more urban than the U.S., according to the OEC. But, it does have a large population and isn’t as dense as the U.S. Besides, Canada has more suburbs than the U.S.
Farmland prices are low
While farmland prices are still low, the demand for agricultural land is rising. The recent increase in crop prices and low interest rates have increased demand for farmland. However, the Bank of Canada plans to raise interest rates in 2022, though they will remain low from a historical perspective. This means that farmland values are likely to increase in the next few years. However, extreme weather conditions could have a negative impact on farmland values.
Despite the recent increase in farmland prices, the increases were not as impressive in other parts of Canada. The price increase in Saskatchewan was only 6.2 per cent, the lowest since 2010. However, increases were higher in the potato-growing provinces, P.E.I. and New Brunswick, which saw increases of 22.6 per cent and 17.2 percent, respectively. In Manitoba, farmland prices rose only 1.8 per cent, marking the lowest increase in 15 years.
According to the FCC Farmland Values Report, prices are expected to increase by 8.3% nationally in the first half of 2021. The same report notes that prices have continued to rise in Manitoba, Ontario and British Columbia, and in the last 12 months. In Alberta, land prices have increased by nearly 10%, while in Quebec prices have risen by more than double that. This is great news for farmers and those who own farms.
Farmland values are homogeneous
Despite the varying and highly variable values of Canadian farmland, some researchers agree that these valuations are fairly homogeneous. These values reflect the baseline material characteristics of agricultural land. These include inherent soil quality, land type, water availability, and location relative to relevant infrastructure. In order to make comparisons among farmland, however, standardization is required. This article will discuss these issues and explore the reasons why farmland values are so heterogeneous in Canada.
The value of farmland in Canada is not completely dependent on public reporting, as public sales of land are not enough to fully determine its value. The market value of farmland in different regions is determined by supply and demand. As a result, farmland values in different areas are more consistent and predictable than their value on publicly reported sales. The Canadian ag industry will face many challenges over the next few years, including labour shortages, supply chain disruptions, geopolitical tensions, and incremental interest rate increases. However, the receipts of grain, oilseeds, and pulses are expected to grow over the next 11 years, as global supply is limited.
In post-Soviet regions, such as Russia, the agricultural sector has been affected by rapid financialization. In 2009, most of the farmland companies listed on stock exchanges were in Russia and Ukraine. These results highlight the contradictions and limitations of asset-making. As the post-Soviet region struggles with land scarcity, farmland values have eroded to near-pre-record lows.
Rural land values are heterogeneous
In a recent study, researchers in the southern Quebec region of Haut-St-Laurent have assessed changes in land values and uses over time, taking into account their relationship with geomorphology. The researchers constructed a geo-referenced database of land registry maps and other data, which included a geomorphological map of the area. A comparison between the values of the region’s various farmland types was made, allowing them to pinpoint the most common factors associated with rural land value.
The study’s authors have identified the most important factors influencing the sale price of farmland per square meter in different parts of Canada. In particular, proximity to built-up areas explains sale prices by a significantly higher proportion. The researchers found this to be a significant effect in determining agricultural land values, and have continued to study this phenomenon. In Kostov’s study, he found that proximity to existing built-up areas increased prices by a higher margin than those in rural areas.
The price of land varies greatly across the country. The market value of land depends on many factors, including the social and economic status of the local population, availability of employment, and the economic activity of the region. In addition, proximity to schools and green open spaces affect real estate prices as well. Since each customer has different needs and priorities, their real estate values will vary. However, buyers will typically seek out land parcels with features they need, and this can affect the value of real estate.
Interest rates are low
The current interest rates are a key determinant of the value of agricultural land in Canada. Agricultural land prices depend on interest rates and expected earnings. Higher rates lower expected earnings, make borrowing more expensive and increase the cost of production. In agriculture, interest rates are vital because land and buildings comprise half of all farm assets in Canada. Inflation has also been a major factor, pushing up seed prices and affecting harvest time.
With mortgage interest rates near historic lows, lenders have been able to offer affordable rates to Canadians. Zoocasa estimates that this has helped fuel the rapid growth of the Canadian housing market. However, a recent survey showed that Canadians disagree about the impact of low mortgage rates on affordability. While 44.4% of Canadians agree that low mortgage rates have made home ownership more affordable, the majority of respondents disagreed.
The bank of Canada is expected to raise its key interest rate tomorrow. The previous low rate of 0.25 per cent fueled the housing boom in Canada during the Pandemic. But the rising interest rates may reduce the purchasing power of first-time buyers, says Kate MacPhail, a Vancouver realtor. She has a number of clients who are on the verge of buying their first home, and the new rates will likely reduce their purchasing power.
Many readers of the Daily Hive love Tudor mansions, and the reporter for their website recently visited an abandoned Tudor mansion in Ontario. It appears the mansion was abandoned following a weather event, but the pictures show otherwise. While it appears the mansion has suffered from water damage, the inside is still in pristine condition. We asked the reporter to name his favorite abandoned place – the answer was a Tudor mansion. The pictures reveal the pristine state of the mansion’s interior.
The Canadian urban exploration community has been looking for abandoned mansions for quite a while. In fact, abandoned homes are like time capsules containing key artifacts of previous owners. One Ontario mansion was once dubbed the “dream home” by its current owner, but now hardly looks lived in. In the video, Riddim Ryder explains why he finds so many abandoned mansions in his travels. The answer is simple: foreign nationals buy abandoned homes as a means of moving money out of a country.
The Peter Grant Mansion is a 65,500 square-foot lakeside mansion that was left unfinished after the 2008 financial meltdown. The abandoned mansion contains luxurious amenities, including a waterfall, a small golf course, two swimming pools, a tennis court, and an indoor boat garage. Despite its abandoned condition, it sits on a picturesque lake in northern Ontario. The video also offers an insider’s tour of the mansion.
Among many other things, David A. Grantham is a contributing author to UmassExtension West Vancouver Blo. He is a renowned expert on real estate in BC.
Born in North Vancouver, Louisiana, Dr. Grantham grew up in Lower Lonsdale. He then went on to complete his business degree at the University British Columbia. As of this writing, Grantham has completed over 100 projects, including the development of a high rise building in Vancouver.
He is a husband, father, son, brother, and friend. He was a dedicated outdoorsman and enjoyed sports such as hunting, fishing, scuba diving, and snow skiing. His wife, Alison Grantham, and their two daughters survived him. He is survived by his wife Alison Martin Grantham and two daughters.