Where are Alberta land prices going?

[AlbertaFarmer5]

Is anyone else's crystal ball working better than mine? I can't see what would continue to drive AB land prices up now that the oilman, the cattleman, and the grain farmer are running out of enthusiasm. In my area most land is bought with energy industry money, rather than farming, and that has dried up. Cattle guys just barely got a chance to start thinking about expanding when the wheels fell off cattle prices.
Banks are getting stricter. City folks who bought a lot of land around here all have or had energy industry jobs. US values are going down. Canadian and Albertan political climate is anti investment, anti business, to be polite.

But, CAD is dropping, interest rates are still and likely to continue to be record low. Values still went up considerably last year in spite of the energy industry. Still many pundits preaching about inflation. European farmers still moving into the area, prices still nearly free compared to Holland, probably more motivated than ever to leave the economic disaster that has become the EU.

I believe there will be better opportunities in coming years, but I've been hearing how land is so overpriced that it just has to drop for my entire adult life and then some. Everything that I have ever bought has been far too expensive at the time. But in hindsight, they all look brilliant. Can't be true forever though.

Anyone seeing any recent trends either way?

[farmaholic]

.....try to remember the early 80's!!!!!!!!

[4GFarms]

I do not understand what anyone grows on their land to justify the cost of it. Too much variables in farming to extend out for the dollar values that are around now. For our farm anyways. Will keep watching and see if there is a correction. I know some of you do not want to see that if you are on the way to selling but I would be more in the buying mood so want lower prices for land. I would like someone to put up an example of how you pay for the land with the crop grown of that land. Without the outside income or investment. Just farming to pay for the land.

[farmaholic]

How many people do you know who buys a quarter or two of dirt and pays for it without subsidizing it with other income?

[4GFarms]

Thats my point farma! I do not have any outside income or investment so the values just do not compute for me!! I guess you could just buy and pay interest and then hope it increases and sell in x number of years but thats not on my agenda. I want land to farm like a normal farmer.

[Ache4Acres]

As long as interest rates stay low and are moving even lower land prices will be High and going higher

[farmaholic]

Thats my point farma! I do not have any outside income or investment so the values just do not compute for me!! I guess you could just buy and pay interest and then hope it increases and sell in x number of years but thats not on my agenda. I want land to farm like a normal farmer.

You either needed deep pockets or paid for land to subsidize it because it wasn't the economics of grain farming it that drove land prices this last run up.

[AlbertaFarmer5]

As long as interest rates stay low and are moving even lower land prices will be High and going higher

Judging by your name, I suspect you might be just a little bit biased? Why are US values already dropping with low interest rates?

[grassfarmer]

Everything that I have ever bought has been far too expensive at the time. But in hindsight, they all look brilliant. Can't be true forever though.

Don't know - it's been that way for a long time. OK so there was a setback here in the 80's but just like the stockmarket it was a blip on the line of upward movement.

I do not understand what anyone grows on their land to justify the cost of it.... I would like someone to put up an example of how you pay for the land with the crop grown of that land. Without the outside income or investment. Just farming to pay for the land....... I guess you could just buy and pay interest and then hope it increases and sell in x number of years but thats not on my agenda. I want land to farm like a normal farmer.

I'm starting to think that is wrong headed thinking - why do you have to pay off the capital asset with the production off it? - you've got the asset and its appreciating. I know it was possible in the 1950s through to the late 1970s in Europe to pay off land purchase with the production - my Dad did it and his rule was you had to be able to pay it off in 7 years or you didn't buy it. Looking back over history I think that time period of fairly good farm profitability relative to land price was an anomaly.
With land prices where they are now maybe we should consider it two profit centres - ownership of the land and farming of the land?

[4GFarms]

I kinda see your point but still cant wrap my head around it. Somebody (me) would still have to make $150+/acre land payments per year to pay for that appreciated asset.