Are we near the top For Land.

[bigzee]

Who needs investors to keep the price of land up?
We all have neighbours who are doing a pretty good job of it on their own.
Canola at $15, and flax at $20 can do crazy things to a guy.
When cash rent is $125 in some areas, buying land for 500k seems cheap.

[jazz]

I am not sure where everyone else sits, probably bigger farms than mine, but if I sold out tomorrow and invested the proceeds in my lenders stock, I would make more money than farming it.

Talk about a catch 22. What the hell do you do with those economics? Pretty out of whack.

[SASKFARMER]

Yes rent is insane now in most of sask.


Step back look at the big picture.

[GDR]

I am not sure where everyone else sits, probably bigger farms than mine, but if I sold out tomorrow and invested the proceeds in my lenders stock, I would make more money than farming it.

Talk about a catch 22. What the hell do you do with those economics? Pretty out of whack.

I would think the majority of farms if they sold out would have more than enough equity to never work again, even though while running the farm, lots may have trouble making ends meet. Doesn't really make sense.

I have also criticized buyers of farms thinking if they had that much money why would they risk it farming? Well if I work that backwards now I have to ask that of myself.

Spoke to a realtor last week, lots of land moving to both farmers and individuals looking to park money, some land selling above listing prices with multiple offers.

[Herc]

I feel that we are targets for that capital gains exemption elimination. Its the easiest tax change to make. Some are seeing that as a risk. I dont trust Trudeau at all.

Longer term, wealth or inheritance taxes and carbon taxes.

Bidens first day in office and we see it already. Trudeau is emboldened.

The exemption is one thing. What if they mess with the inclusion rate. Was 75% at one point in history.....

Farmers would have a farm sale years ago and never use all their capital gains exemption. Now one quarter bought in the 60’s pretty much uses it all up.

[Austrian Economics]

As long as interest rates continue to fall, farmland prices will continue to rise.

There's a bit of a hiccup in the trend right now. Interest rates have trended up and that might be causing some investors to back off a bit. The economy has so many heavily indebted players in it that even a small rise in rates could trigger defaults or at the very least a reluctance to borrow.

Once interest rates go negative, you will see farmland values you would never have imagined.

It's not just farmland prices that are skyrocketing. I read yesterday that in the latter part of 2020, residential housing prices rose so quickly that they accounted for nearly 10% of Canadian GDP.

At the height of the American housing boom pre-2008, housing only accounted for 7% of their GDP.

[SASKFARMER]

Large block of land in east sask that was I think organic. Now up for rent 21000 acres good if you want hard work cleaning up a mess. You to can be a BTO.

[blackpowder]

"When cash rent is $125 in some areas, buying land for 500k seems cheap"
If you find both conditions in the same area, buy.

[zeefarmer]

The higher than normal amount of wanting to rent/wanting to buy land ads on Kijiji and Facebook tell me the top isn't in yet. The run up in crop prices since harvest will fuel the fire. Enough guys out there that will buy or rent just to stick it to someone else.

[bucket]

Keep buying !

The interest is a tax write off !

And when the interest can't be paid the write downs begin....Grain prices are not the same as the eighties and interest rates on 40,000 dollar quarters kicked the shit out of guys to the point where some lenders wrote down the loan...because the price of land had dropped to 20k..they were losing either way...better to get interest on 20k than none at all...

Can you imagine what would/will happen on land 10 times the price with the same grain prices?