Land values “on solid ground”: FCC

Yet another rate hike from the Bank of Canada this week has added to the pressure on anyone seeking credit, but it’s still not enough to slow demand for land.

Canada’s central bank, which sets monetary policy for the country, raised its key policy rate to 5% on July 12, warning that further increases may be needed to stamp out inflation.

“While the bank expects consumer spending to slow in response to the cumulative increase in interest rates, recent retail trade and other data suggest more persistent excess demand in the economy,” the bank noted, calling out real estate activity in particular.

Real estate listings are lagging demand, it said, adding to price pressures that are supporting inflation across the economy.

Demand for real estate is a key issue in the farm sector, which Farm Credit Canada said earlier this year has seen fewer properties available for farming and a corresponding decrease in the number trades. The decline comes at the same time as high commodity prices are supporting growth in the crop sector while livestock operations are seeking additional land to support herds.

Demand remains strong despite interest rate hikes, FCC vice-president and chief economist JP Gervais told Country Life in BC this week.

“The incentive for farms to grow their operations is still there,” he said. “The market for land is not going to tumble. I think it’s on solid ground. But the growth that we’ve seen in land values recently is going to slow.”

The pace of farmland appreciation decelerated last year and will continue to moderate this year thanks to higher borrowing costs, Gervais said, but he doesn’t see values declining.

In BC, farmland values appreciated by an average of 8% last year, with slightly lower growth possible this year.

Gervais said that farmers saw the cost of debt increase by just half a percent nationwide last year. This year, he expects farmers to pay an additional percentage point, but that will be felt more keenly in sectors with tight margins such as dairy.

“[Rates] are locked in, especially when it comes to real estate,” he says. “But higher interest rates are going to diminish the appetite to grow because it’s just not going to pencil out.”

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22 hours ago

It was another sell-out at the 31st annual Fort Langley Cranberry Festival on Saturday with organizers selling 5,000 pounds of locally-grown, fresh berries in less than five hours. Youth from the Fort Langley Lions Club's Young Lions program scooped, bagged and weighed several pallets' worth of cranberries. Ocean Spray donated the berries, which the public bought to benefit the community. Local grower The Bog was also selling fresh berries, having brought 2,700 pounds, which were on track to sell out by the end of the#BCAgt.

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6 days ago

There was a lot of reminiscing and appreciation of how far BC's turkey industry has come at a reception celebrating the 75th anniversary of the BC Turkey Association and the 60th anniversary of the BC Turkey Marketing Board yesterday in Abbotsford. With a slideshow of events and people over the years, guests laughed and had a lot to be thankful for. "It's an opportunity to celebrate the industry at a time of year that's known for turkey. It's a culmination of all the year's work," says Natalie Veles, executive director with BC Turkey Marketing Board.

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Love it - Deb Etsell I see you 🤩

7 days ago

BC was the sole province to see farmland values decline in the first half of this year, dropping 1.9% according to a Farm Credit Canada report released Octover 7. This represented an acceleration in value declines from last year, and contributed to a 3.9% decline in the 12 montsh ended June 30. The drop follows on a 1.7% decline last year, which Farm Credit Canada attributed to tougher times in the fruit sector. However, the mid-year report points to a broader slowdown in value growth diven by higher production costs, tighter margins and uncertainty around trade, tariffs and international markets.

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Ndp

3 weeks ago

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Photo | Barb Edmonson / Firefly Ranch, Clinton

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Feedback on changes to rules governing food processing in the Agricultural Land Reserve has drawn about 250 submissions. But the proposal now hangs in the balance with Premier David Eby's decision to call a snap election, which also delays discussions of assistance for farmers hit hard by this year's wildfires and historic #BCAght.

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What would you expect from the NDP, when they still had a 2 year mandate?

Ridiculous timing. We have people needing answers and have to plan for winter supplies. Fires are long past, months have gone by knowing there was going to be the need for support. Drought was written on the wall even before summer began with no snow pack. This is not new to government and they are calling for another year just as bad for 2027. I throw my hands up and wonder what else needs to be more challenging than what we've experienced over the last 6 years in BC?

250 submissions.... I'm pretty sure there are more than 250 farmers in BC