JUNE 2018 • COUNTRY LIFE IN BC Demand for land drives farmland values higher by PETER MITHAM


VANCOUVER – Speculation was a hot issue during the recent public consultation undertaken to gather suggestions for revitalizing the Agricultural Land Reserve. The 2,300 submissions to the review committee regularly expressed concern over who is buying farmland and what they’re doing with it. Farm Credit Canada’s annual report


on trends in farmland values says farmers looking to expand were the single biggest driver of demand for farmland in 2017, however. “The strongest demand for farmland


was from producers looking to expand their operations,” FCC stated in its latest report. “Non-traditional buyers – those who invest in farmland but are not active farmers – and industry consolidation also contributed to higher values in some specific areas.” The activity fuelled the weakest increase in farmland values since 2012, with values rising just 2.7% in 2017 versus the previous year. According to property transfer data collected by the BC Ministry of Finance, a total of 987 farm properties changed hands in 2017. Volumes in the second half of the year – a period for which comparable data from 2016 exists – were up 22%. The strongest volumes were seen in the Peace


region, with 280 farm properties changing hands, the Okanagan-Similkameen with 95 sales and the Cariboo with 76 sales. “Though there were some larger transactions in 2017, most market activity involved modest expansion purchases,” FCC reported. “The area’s resource-based economy continued to influence the farmland market as industry and producers sometimes competed for the same land.”


SOURCE: BC MINISTRY OF FINANCE There was also expansion in the Okanagan, with


FCC singling out “significant investment in new plantings” by tree fruit growers as a driver of demand. Provincial data for the Okanagan Valley’s three regional districts indicate 181 farm properties changed hands across the region last year. Prices increased just 5.7%, but this still made for the highest average price in BC at $91,978 per acre. While farm expansion also drove sales in the


Lower Mainland, a lack of properties dampened activity. Just 133 properties changed hands in the Fraser Valley and Metro Vancouver regional districts in 2017, resulting in values rising just 13.9%. The result was the highest base price of any region, at $43,000 an acre, and an average of $89,314. The increase in values in the Lower Mainland was second only to that on Vancouver Island, which logged the greatest increase of any region at 23.6%. The typical sale maxes out at $100,000 an acre. A common element to price increases on


Vancouver Island and across the Lower Mainland was proximity to urban areas. “Throughout most of the province,


there continued to be demand from rural residential buyers seeking land close to urban centres,” FCC noted. The increases diminished the further


away from Victoria and Vancouver one moved, dropping through the Okanagan and Kootenay regions and north through the Thompson-Nicola, Cariboo and Peace, where appreciation bottomed out at just 0.2%. Provincial property transfer data reveals


that buyers of farm residences – the residential portion of farm properties, up to an acre in size – weren’t focused exclusively in municipalities such as Richmond.


The municipality stole the spotlight in 2017 when it came to regulating


residential development on farmland, with critics saying local properties were the target of speculators. However, Abbotsford, Langley Township and Chilliwack saw 217 of the 917 farm residences sold across BC in 2017. Richmond ranked 19th, with just 15 sales. Provincial data indicate that 303 farm properties sold in the first three months of 2018, underscoring the ongoing strength of the market. Sales have been strongest in the Fraser Valley, Metro Vancouver and Peace regions. A change in how the province tracks the data


makes a comparison with previous years difficult, however. Data collection now relies on parcel identification data from BC Assessment rather than property transfer tax filings, where purchasers identified what kind of properties they bought. “Given this change in reporting, 2018 should be


considered a new dataset,” finance ministry staff told Country Life in BC.


9


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48