BC farmland values rose 5.4% in 2019, according to Farm Credit Canada’s annual survey released this week. This compared to a 6.1% increase in 2018, and was slightly ahead of the national average of 5.2%.
The highest average per-acre value in the province last year was recorded in the Okanagan, at $103,288 as buyers purchased orchards for vineyard development. The most expensive region continued to be the South Coast, however, where sale values maxed out at $186,000 an acre. Northern BC, which was among the most active region in the province last year according to provincial property transfer data, saw values rise 4% to an average of just $1,712 an acre.
Vancouver Island, which led the country last year in terms of value gains, saw a 13.1% increase in land values to an average of $57,500, driven by transactions on the Saanich Peninsula. It was displaced as the top region for land price increases by Atlantic Canada, where PEI logged an increase of 22.6% and New Brunswick reported land prices up 17.2%. The driver of land values on PEI was potatoes, while dairy operations in southern New Brunswick helped boost prices in that province. Prices in both provinces are a fraction of what they are in BC, averaging less than $6,500 an acre.
Many real estate markets are experiencing slower times as a result of the disruption caused by the Covid-19 pandemic. This stands to put a damper on farmland sales this year, too.
According to Gord Houweling of BC Farm and Ranch Realty Corp., many contracts now include clauses that anticipate delays in closing. The degree to which the slowdown affects transactions will depend on how long social distancing restrictions remain in place.
Reductions in the Bank of Canada’s benchmark lending rate and other measures designed to counteract the depressive effect of the pandemic also stand to play a role in transaction activity this year.
Consumers embrace niche products