Land prices are surging in Canada
Land prices in Canada are surging over the past 2 years on top of a very strong 10 year period of double digit growth.
If we look into what is driving up prices, there are a number of factors that are common among the provinces, namely urban sprawl. Property developers are buying up land close to urban centers to develop new suburbs and shopping malls. Speculators have also entered the market, it is local farmers who are missing out by being priced out of the market.
Investment funds looking to cash in on the seemingly endless rise in prices are buying up large acerages that they can sit on for 5 or 10 years and lock in 1,000's% growth rates.
Prices for land can vary wildly from $950 CAD an acre in Saskatchewan to highs of $63,000 in parts of the Fraser Valley in British Columbia. On average prices have risen by 120% in the past 10 years across all provinces, of course there have been years when prices have dipped, but the outlook is looking very positive for the next ten years, if we look at the recent performance, land prices have risen by 7.9% in 2016 and again by 8.4% in 2017.
Most recently Canada has legalised the production and sale of Marijuana which will be another factor in the rise in prices in the coming years as this industry is expected to generate billions of dollars every year from the legal sale of the Marijuana plant.
Download the latest Farmland Price report for 2017 here.