The RE/MAX Market Trends Report, Farm Edition 2012, highlighting trends and developments in 16 markets throughout Canada found that prices have increased almost across the board this year. In Ontario, several areas experienced “impressive gains over last’s year’s figures,” the report says, including Kitchener/Waterloo, Woodstock/Stratford, London/St.Thomas, and Bruce/Grey/Huron.
Al Mussell, senior research associate with the George Morris Centre, called the rate of increase in Ontario farmland values remarkable. And Mussell says he doesn’t expect any dramatic changes in the continuing upward trend of land values.
The report says population growth set to outpace increases in food production in years to come and ongoing urban sprawl will contribute to higher land prices in the future.
Ann Slater, Ontario coordinator for the National Farmers Union, says soaring land costs make it more difficult for new farmers to begin in the agricultural industry. “For anyone who wants to get started, it’s a huge debt load to take on even though interest rates are low.”
Slater also notes increasing land costs leads to a greater concentration of farmland in fewer hands and that means fewer farmers.
Per acre land costs in Kitchener/Waterloo jumped to $11,000/$15,000 this year from the $10,000/$11,000 range they were in during 2011. In the Woodstock/Stratford area, per acre land prices soared by $6,000 to $15,000 this year compared to last year’s $9,000.