A report released on April 11 by Farm Credit Canada (FCC) revealed that much of the gains enjoyed by the sector over the past two decades could be attributed to sustained demand, robust crop income, and low interest rates.
Manitoba led the pack in terms of agricultural real estate last year, posting a strong 12.4 per cent growth rate. Alberta and Quebec came not too far behind, showing 11.6 per cent and 9.6 per cent increases, respectively.
However, as with other property types in Canada, the agricultural segment isn’t experiencing uniform growth.
“There appears to be greater volatility with a higher number of locales where values decreased,” the FCC stated in a news release, as quoted by CBC News.
The report warned that the sector might face weaker growth this year due to crop price adjustments, although no major crises are expected as agriculture still remains relatively insulated from the full effects of lower commodity prices.
“The best-case scenario would be for the average value of farmland to reach a point of long-term stability, where any future increases or decreases are modest and incremental,” FCC chief agricultural economist J.P. Gervais said.
Continuing a slow-burning trend that has started in 1993, the value of agricultural property in Canada grew by 10.1 per cent last year, according to a recent study.