Covid-19 and Current Economics: Observed Impacts on Farmland Values
June 3, 2020
As of today, our farm appraisers have observed that farmland values have remained largely on trend with the existing value trend in the given area or values have held steady in most rural areas throughout Alberta and Saskatchewan. Properties located in closer proximity to major urban centers have experienced modest downwards trends over the last few months. However, a moderate depreciating trend had existed prior to the onset of the pandemic which is mainly due to broader economic weakness. Thus, it is unclear if Covid-19 had further impacts on the trend.
There are also select rural sub-markets where there were downward pressures on land values prior to the pandemic and we are monitoring those marketplaces to see if the market value trend in those areas turn firmly negative. However, we are also aware that lenders are attempting to work with landowners in an attempt to avoid any forced sales. On the contrary, we are also aware of many sub-markets throughout the western provinces where demand remains high and the land value trend has experienced notable growth over the last twelve months.
Given the above, there are many areas throughout western Canada that are likely to deviate from the average provincial or regional value trend indications published by Serecon (Farmland Value Trend Newsletter) or others. As a result, it would be prudent to investigate the current land value trend in your local market and seek an appraisal or valuation consultation if needed.