Land Prices Sore in BC Due to Demand of Farmland

Why Are Farmland Prices Increasing In BC?

According to a recent report, the value of farmland prices in BC is steadily increasing despite a decrease in the number of transactions made since 2007. The report says that there is a clear trend of hoarding farmland since the farmers are expecting a higher demand in future due to increase in demand for food and water and decrease in the availability of arable land.

The Landcor report, which was based on a database of 1.7 million properties in BC, says that the trend is of consolidation of farms with bigger farmers buying the nearby farms offered for sale to increase the size of their farmland. The report adds that smaller farmlands of the size from 100 to 300 head of cattle are being purchased by larger ranches with 600 to 1200 heads of cattle. The same trend is visible in food producing farms too.

Though there has been a perceptible decrease in transaction of agricultural properties since 2005, the report attributed this to hoarding and not to lack of buyer interest. This is indicated from the fact that the average sale price which was $ 587,972 in 2007 increased to $ 939,617 in 2012. Still, it is not possible for the small farmers to survive without any additional income, while the larger farms can benefit from technology and other labour expenses.

The current indications are beneficial to farm land prices. According to Wall Street Journal, the price of beef may climb to a new high this year due to drought in US. The foreign markets for Canadian beef are opening up after a lull which happened due to mad cow disease. The food production in the world has to double by 2050 to meet increasing demands and Canada would be one of the few countries with surplus food production.

The limit in developing arable farmland due to hilly terrains is resulting in increase in demand for the available farm lands in lower regions. This is expected to boost up the price of BC land for sale, especially those within the reach of major cities. This is evident from the fact that the Frazer Vally Farmland is selling at a price from $ 40,000 to $ 60,000 per acre as compared to Ontario where the price is still $3,000 per acre. This is also because the growing season in Frazer Valley is much longer than that of Ontario.

The experts are also advising for a long term agricultural policy in BC to protect the agricultural land and to make farming more attractive, which can result in increased returns from farming.