Earlier this month Farm Credit Canada published its annual farmland values report 🙂 Across the country farmland values on average increased 22.1% in 2013. Great Scott! 😯 Saskatchewan farms experienced the biggest jump of 28.5% Blimey! (゜o゜) That represents an 89% increase since 2011.
A couple of years ago I explained on this blog why Saskatchewan had the most investment potential due to its growing resource economy and past government regulations which artificially limited market demand.
The full FCC report can be found here (PDF.)
Right after I bought my first farm in 2012 some readers asked me if it’s too late to invest in farmland. I told them it’s never too late to buy land as long as you have a long term investment horizon 😉 I’ve never heard of anyone who has held onto good quality real estate, whether it be in the city or in the countryside, for over 10 years and somehow lost money during that time. And I would give the same opinion to anyone today in 2014 if they asked me that question again 🙂
Here is how I felt after I read this CBC article with a title that reads “Saskatchewan farmland values jumped 29% in 2013”
I know Saskatchewan farms and Vancouver/Toronto homes all “appear” to be overpriced today 😐 But my gut feeling tells me that prices will be even higher in the distant future. I also like investing in these assets because they offer protection against inflation as well as provide diversification to a retirement nest egg.
One major risk to real estate is rising interest rates. But I’m not worried about that any time soon 😛 Even after the Bank of Canada starts tightening, rates will still stay relatively low for a very long time.
“…[T]he new normal will be lower rates than in the past and people should get used to that.”
~Steven Poloz, Government of the Bank of Canada (source)
In my March net worth update my farmland was worth $325,000 based on my initial cost of purchase, plus $2,500 appreciation in 2012. I update this value once a year every April using the FCC reports. Now that the 2013 results have been released, I can’t wait to calculate my April 2014 net worth. I haven’t done the math yet, but somehow I have a feeling that this will be my BIGGEST monthly increase yet! （⌒▽⌒）
Random Useless Fact: Ross used to have long hair