Will Farmland become a Buyer's Market?

During one of my recent Farm Calls, a client (a veteran of farming for many years) and I engaged in a lengthy conversation about the direction of Saskatchewan Farmland values. This particular client of mine is convinced that land values will drop in the short term due to several reasons...commodity prices have recently corrected, interest rates can not go any lower (and will inherently rise), and  input & machinery costs continue to rise all resulting in squeezed margins (something relatively new again). With land being the single largest input cost per acre, he thinks that it will have to correct and he's quick to reference the fast rise in farm land in the late 70's/ early 80's followed by a large correction in values. History, it's said, often repeats itself.

This conversation is not unique anymore, these views are quite common place. Consensus among those who generate their livelihood from grain farming would agree with this view. If commodity prices stay at these lower levels, it will no doubt be next to impossible to continue the meteoric rise in land prices we have seen over the last half decade.

But will we see them correct back to pre-2008 values? Or will see values flatten out or keep up to inflation?

Only Time itself holds that answer...

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Regan Martens

Regan Martens

Sales Representative
CENTURY 21 Proven Realty
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