Alberta no longer has the most valuable total farm real estate in Canada, numbers from Statistics Canada show.
The value of Canada’s total farm real estate — including farmland and buildings — grew to $652 billion in 2022, according to agriculture balance sheets from StatsCan published last month.
The figures show that in 2020, Alberta’s total farm real estate was valued at $146 billion, higher than any other province. Ontario was in second spot, at $141 billion.
By 2022, Alberta’s total farm real estate value had increased to $167 billion, compared to $201 billion for Ontario.
“If you look at Ontario, the demand for land, farmland around urban areas … has been really, really strong,” said J.P. Gervais, chief economist for Farm Credit Canada.
“I do think that it’s a trend since really 2020 beginning of the pandemic.”
Growing conditions are also a factor, Gervais said.
“In the Canadian Prairies, it’s been really difficult for growers, [with] major drought and poor yields,” he said. “Whereas in Ontario, the yields have been pretty good.”
Data from Farm Credit Canada indicates Alberta’s farmland is most expensive south of Calgary, with costs running up to $20,200 per acre in 2022.
In Ontario, farmland is most expensive in the southwestern part of the province, where values ranged up to about $39,000 per acre the same year.
Even though Alberta’s total farm real estate value is no longer the highest in Canada, Gervais said Albertans can be optimistic about the future of local agriculture.
“[Land values] reflect the positive side of the industry,” he said. “The demand for what we’re growing in Canada continues to expand.”
While Ontario has seen more dramatic increases, climbing land prices in Alberta are posing challenges for young Alberta farmers building their businesses, according to Gervais.
Businesses have emerged to help farmers with the growing costs of expansion.
Area One Farms partners with farmers, giving them more capital to invest and expand.
“I say build the farm you want to farm in 10 years, but build it now when the opportunity exists,” said company founder Joelle Faulkner.
Matt Hamill, co-owner of Red Shed Malting — which produces malt on a farm near Penhold and sells it to craft breweries around Alberta — says his business exists because of the high price of farmland.
Matt Hamill and his wife Sonja Hamill live near Penhold, Alta., where Matt co-founded a grain malting company to generate sustainable income without purchasing more farmland. (Submitted by Matt Hamill)
“If you’re a first-generation farmer, the cost of land is so prohibitive,” Hamill said. “We didn’t know if we could acquire additional farmland to grow.”
Instead of expanding his family’s operation, Hamill shifted focus and began turning his grain harvest into malt for brewing.
“There’s a lot of young farmers, the next generation taking over the farm, who are looking for more creative ways to … make small-scale farming more sustainable,” he said.
Red Shed Malting sells to several Edmonton breweries, including Alley Kat Brewing and Polyrhythm Brewing.
Hamill said as his business expands, he’ll likely buy grains from neighbouring farmers before considering acquiring additional land.
Gervais, meanwhile, said higher interest rates should slow down the increases in the cost of farm real estate.
On Wednesday, the Bank of Canada raised its benchmark interest rate to five per cent in its latest bid to curb inflation.
Gervais does not expect prices to go down, however.
“The farmland market itself is going to remain very strong.”
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
