All across Alberta it’s getting harder to find farmland that meets your needs, and what is available is getting more costly. Real estate people everywhere in the province tell the same story: “There just isn’t much land for sale.”
Irrigated land in southern Alberta is fetching the highest prices. One quarter section in the county of Lethbridge is reported to have sold recently for $1 million, or more than $6,000 an acre, although there may have been assets other than bare land involved. Prices around $5,000 an acre for good light land are considered “in the ballpark.”
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Lethbridge realtor John Perlich has sold farmland across southern Alberta for many years, but he won’t discuss prices.
“Every deal is different,” he says. “Some people are looking to expand their business, or make room for the next generation. When a piece of land is close to them, or meets their needs for some reason, they want it.”
It’s still too early in the sales season for Perlich to predict how active this year will be. In the south, the main land sales season starts after harvest with most deals settled by the time cropping plans need to be made and inputs booked.
Darcy Powlik of ReMax in Leduc sees huge demand for good land.
“The biggest thing people are looking for is quality,” he says. “They want No. 1 soil and if a piece of that quality comes up, several people are interested right away. But there’s not that much land for sale. I see just a few parcels like that in a year, and they’re gone right away.
“Years ago, people wanted to buy close to home. But now, good land has become scarce, they’re prepared to go farther out. Good land brings good prices, and, if land has oil revenue, that pushes up prices. Some land in this area brings in $3,000 or $4,000 a year from oil lease payments.”
Powlik has sold land with top-quality soil for as much as $2,750 an acre while poorer land is generally around $1,500 an acre.
Older farmers selling
Most of the land that comes up for sale is owned by aging farmers who are retiring, often from small cow-calf operations. Buyers tend to be younger farmers wanting to expand their grain operations. Investors, both local and offshore, are looking for the same sort of land as farmers, although they really want bigger parcels.
Even in the Peace country where many farmers had drought this year, land prices are holding their own or rising.
“We’ve only had one year of pretty bad drought,” says Jack Alexander of Royal LePage in Peace River. “It takes more than one year to really affect land sales. We’re having a hard time putting a price on land, but it’s land quality and location that really counts.
“People like to be fairly close to town or a good road. That sort of land is usually around $1,500 an acre. Grazing land is cheaper, maybe $600 to $650. Bushland is really tough to put a price on, most goes around $350 an acre. Buyers usually just fence and pasture that land, but if it has trees they’ll cut them and sell the wood to a pulp mill.”
Many small farmers like to buy close to town and near good roads because the land has alternative uses if the farming venture doesn’t pan out. Those sorts of sales are generally for small parcels, such as a quarter section, but Alexander said he also sees a lot of corporate buyers, some from offshore, looking for larger holdings.
“They like to have 30 or more quarters in one block, but there are very few pieces like that available,” he says. “I’d have a hard time finding 10 quarters in a block.”
Corporate buyers want to buy land to lease it out, says Alexander, adding he doesn’t believe they are pushing up prices.
“They’re not simple-minded,” he says. “They see farmland as a secure investment. But, they’re fairly frugal and the numbers have to show a decent dollar for them – $1,500 an acre is pretty good up here. A lot of people are looking for land and even though this is the last frontier, there’s not a lot of it for sale.”
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“TheywantNo.1soilandifapieceofthatqualitycomesup,severalpeopleareinterestedrightaway.Butthere’snotthatmuchlandforsale.Iseejustafewparcelslikethatinayear,andthey’regonerightaway.”
DARCY POWLIK
LEDUC REALTOR
