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
Hey! I just love your blog and the way you go about planning your future! Having lived in the Lower Mainland and then moved to SK in 2008 I concur with your views on farmland being a solid investment! If the Chinese start snapping it up we should all pay attention. In my view farmland is an almost better investment than real estate, because it is not as vulnerable to environmental problems, especially if you own grassland, which you can lease out to graze cattle. That is pretty much fail-proof! That’s what we have and have done very well with! If you ever need a local go-to in SK give me a holler! In the meantime: I’ve to my eye on you kid! Doing really, really well! Thumbs up!
Thanks for the kinds words 🙂 It’s great to meet a fellow farmland owner. I may join you and move to SK one day when I retire 😉
(Correction!).I cannot wait to see your net worth hike this month…. for sure, it will inspire and motivate many of your readers including me :).
That post should go up on May 4th, AKA Star Wars day 😉
Wowser. Have rents jumped accordingly?
Rents have gone up too 🙂 But not as much. Maybe 10%. So still pretty good.
That is quite the increase… Congrats…Looking forward to your networth update in about a weeks time
Thanks. I don’t want to jinx anything but I’m hopeful for a double digit increase 🙂 We’ll see how the stock market performs on the last trading day of the month.
We’ve invested some of our money into a closed fund that buys and holds farmland in Saskatchewan (http://moneyramblings.com/investing-in-canadian-farmland/), and I’m really looking forward to some nice returns. Mind you, it might not be as high as yours, but our risk exposure is much lower and completely hands off while you have to deal with renters and such. But I’m still very happy with this investment. Possibly will be doing more in the future!
You also get the benefit of diversification because your fund owns land across SK 🙂 AgCapita just wrapped up their Farm Fund IV 😀 and it was a big success. I’m happy for everyone who benefits from these kinds of investments. Just goes to show that there are always ways to make money in the world of investing,
[…] decided to buy another! Took out another loan from the bank, but I believe it’s worth it. Farms Prices Still Soaring – It’s 2014. Farm Credit Canada released its annual report. In 2013 my two farms […]
Your blog is great!
I would like to contact you.
Hi Yvan. Thanks for stopping by the blog. 🙂 You can use the contact page to email me. Cheers.
[…] FCC reported Saskatchewan farmland prices increased 28.5% in 2013. I may be sacrificing $1,905 of losses each year on income, but I just made $49,163 in capital […]