BC land values held the course in the first half of 2023, according to Farm Credit Canada, in an October 4 report on farm land values.
The mid-year update indicated a cautious approach to land purchases and spending generally, which FCC chief economist JP Gervais credit with slower demand and, in turn, appreciation.
“With higher interest rates, elevated farm input costs and uncertainty regarding future commodity prices, producers are being cautious with their investments and capital expenditures,” he says in a statement accompanying the numbers.
Provincial property transfer data indicate broadly lower sales activity for farm properties during the first half of this year.
Sales were down 53% overall, led by a 95% drop in transactions in the Fraser Valley. The Fraser Valley is home to some of the most expensive farmland in Canada but the capital-intensive operations here mean local producers have also been hit hard by tighter operating margins.
The Thompson-Nicola and Nanaimo regions saw declines of 77% and 71%, respectively, while the Okanagan-Similkameen, Peace and Cariboo regions saw declines of 63% to 67%.
The flat growth in BC farmland values during the first half of this year follows an increase of 8% last year. Gervais said at the time that the full impact of interest rate hikes had to be felt, but that the impact would be felt most in areas where debt accounted for a larger portion of farm balance sheets.
This now seems to be playing out, while other regions continue to see modest appreciation due to a lack of available land for purchase.
Nationally, FCC reports that farmland values increased by an average of 7.7%, led by Saskatchewan at 11.4%.