Farmland valuation in Ontario may have ‘approached their maximum,’ says report
A reduced rate of farmland value growth in all but one region defined the growth picture in Ontario in 2024, according to a new cross-country cultivated land value growth report from Farm Credit Canada.
Average cultivated farmland values in Ontario increased by 3.1 per cent according to the 2024 Farmland Values Report. It follows a 10.7 per cent increase in 2023 and a 19.4 per cent increase in 2022.
“The province is known for its diverse buyers, ranging from supply-managed operations, field vegetable producers, cash crop producers, part-time farmers and investment companies, to some extent,” explained the report.
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“In 2024, based on the trends in cultivated farmland values, buyers’ valuations for farmland seemed to have approached their maximum, resulting in farmland value ranges tightening in some regions of the province.”
The Central West region — at 13.5 per cent — was the highest value per acre increase and the only one in the double digits. FCC credited this gain to urban pressure. The region was home to farmland averaging $31,700 per acre.
Meanwhile, the Southern region saw a slight 2.4 per cent growth for a final value per acre of $23,600. The South West region’s growth also showed a modest increase at 3.2 per cent landing at a per-acre figure of $33,700.
Land value growth in the Mid Western region landed at zero per cent, but that’s slightly misleading according to the report.
“In the early part of 2024, land values in the Mid Western region backed off from the prices being paid in the prior six to 12 months. The second half of 2024 saw a slight rebound in values, with the region’s annual rate of change ending up flat overall.
“There was also minimal sales activity here in the last quarter of 2024.”
Land values in the region sat at $19,200 per acre.
The South East region saw an increase of 3.8 per cent for a total per-acre value of $21,500, representing the second-highest growth rate in the province.
The Central East region experienced the second lowest rate of growth in Ontario. The report blamed minimal sales and a slowdown in urban pressure, with a 1.1 per cent increase in cultivated land values. The value per acre ended up at $13,100.
“Demand for good quality land was still strong, but this isn’t the case for poorer quality farmland. The same can be said for areas of the Eastern region, which saw a 1.9 per cent increase in cultivated land values,” the report said. The Eastern region average land values were just behind Central East at $13,000 per acre.
Cultivated land values in the Northern region grew by 2.6 per cent for a result of $4,900 per acre.
Source: Farmtario.com