The upheaval in the global financial markets over the past month has not cut into demand for agricultural land in Western Canada, according to farmland real estate sources. However, willing sellers are becoming harder to find, as many landowners are looking at their land as a relatively secure investment.
“We’ve definitely noticed the reluctance of some farmers, who were thinking of selling, to part with their land,” said Chris Classens, of InfoMarket Group GMAC Real Estate in Alberta. “They’re saying that ‘the land will always be there, but look at the stock market and everything else.’”
In addition, “the banks are still aggressively lending money in agriculture,” said Classens.
Grain prices have come down from their highs seen earlier this year, taking some of the optimism out of the agricultural sector. However, “even if grain prices stay at the level they’re at now, there’s still some pretty good money to be made in agriculture,” said Classens.
“In essence, it’s still fairly strong,” said Maurice Torr, agsales specialist with Century 21 West-Man Realty in Manitoba, on the state of the western Canadian agricultural real estate market.
However, Torr didn’t think the agricultural sector would be able to escape unscathed from the current economic crisis, and expected farmland values would eventually level off or possibly come down. On the other hand, he also thought farmland would hold up considerably better than the residential sector.
Torr agreed with Classens that availability of land for sale was tighter than normal. He thought those people holding off for higher values may need to adjust their expectations.