Interesting "historical" numbers.

[jazz]

I think the party is over...

Before covid, I would have said that too, but after seeing our govts print up trillions and hammer rates down to 025%, history tells me that is simulative for the time being and will go somewhere usually into hard assets.

[farmaholic]

I think the party is over...

You see andejilic land for sale ( the largest landowner in saskatchewan) and other large packages being sold by Toronto investor groups...

Farmers are going to be sucked into the vortex of paying high land prices.....

when the investors who enjoyed parabolic appreciation cash out.

Boy is it easy to get off topic.

[Rareearth]

Is high priced land a bad thing?

There are many other cost contributors, and income that impact the bottom line. It’s a component, don’t be blinded or focus on that one line item.

When looking at the chart is there any past year where you would have made a bad vestment buying land?

[farmaholic]

Over what time frame?

[farming101]

Is high priced land a bad thing?

There are many other cost contributors, and income that impact the bottom line. It’s a component, don’t be blinded or focus on that one line item.

When looking at the chart is there any past year where you would have made a bad vestment buying land?

Any time between 1980 and 1986. Many went deep into debt and didn't last till the 90's

[Oliver88]

The value of a 10-15% drop in today's land values is what I paid for most of my land....lol.

Multiple years of those decreases and it gets real ugly.

But it can't and won't happen.....ever!

Going by my questionable memory, 20 years ago a lot of good farmland sold for 8x assessment or 350-400 per cultivated acre. Interest rates were about 7% and a land payment was actually lower than a rent payment than based on 15 years of payments with 25% down payment.
Now the financial industry doesn’t focus on land quality or assessments and everything is a certain $ per cultivated acre regardless of soil type, rocks, yield potential, etc. Also now anyone with a pulse is approved at low interest rates with longer terms.

2000-2020 it looks to me like a 500-600% increase in farmland values but interest rates are much lower and longer terms are common with smaller down payments.

[furrowtickler]

Going by my questionable memory, 20 years ago a lot of good farmland sold for 8x assessment or 350-400 per cultivated acre. Interest rates were about 7% and a land payment was actually lower than a rent payment than based on 15 years of payments with 25% down payment.
Now the financial industry doesn’t focus on land quality or assessments and everything is a certain $ per cultivated acre regardless of soil type, rocks, yield potential, etc. Also now anyone with a pulse is approved at low interest rates with longer terms.

2000-2020 it looks to me like a 500-600% increase in farmland values but interest rates are much lower and longer terms are common with smaller down payments.

Agree

Be interesting to match that up with farm “net” returns over that same period ..
Low interest rates or not , my guess is that in reality it will show that it’s not sustainable.. at all , anywhere .
Actually show land values , machinery costs and inputs against average net returns over that time period . It would point out a stark reality to why some believe land in Sask is way overpriced regardless of the small advantage in lower interest rates .
That same acre of dirt still needs to pay for the massive increase in overall costs .

[Rareearth]

I remember the 80’s , looking back 25 years

Farming sucked, poor crops, summer fallow, low yields, low commodity prices, low land prices, no holidays, no new houses, no new equipment, young people moved to Alberta. The problem was margins, no room for profit.

If you don’t have own land, equity,security, etc farming is impossible, that’s why land prices are going up. It’s a fixed cost and Huts amortized over 50 years, investors want security and 2 or 3 percent return on dollars invested + capital appreciation opportunity( every realtor uses that chart and they delete the 80’s)

Land is better investment than machinery, new automobiles, etc. We were the lowest paid professionals in Canada, that has changed somewhat. Housing prices in urban area of sask chart would look similar to farm land prices or show even better returns.