Growing urban areas and speculation of which farms adjoining Woodstock may become valuable for residential and/or commercial uses in the future is just one of many reasons why the price of farmland is increasing quickly.
I've certainly heard of farms selling for over $16,000 per acre in Oxford. At the same time with demand high, and supply as a constant, taxes are also going up for farmers because their assessments are on the rise.
I was going to make a list a few available farms, but when you factor in the residence, barn(s) and equipment, and sometimes variables like a dairy quota, the numbers are higher than many could relate to. There's currently a large dairy farm on the 13th Line (north of Woodstock) for sale, for example, for $6.5 million.
Here's the London Free Press story:
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Farm land prices soar
By John Miner, The London Free Press
Monday, September 10, 2012
LONDON -- If you have a yearning to buy a farm and get back to the land, it’s going to take deep pockets and a friendly lender to satisfy.
That is if you can even find a farm for sale.
Prices for farms in the London region, particularly the Woodstock and Stratford regions, have shot up hundreds of thousands of dollars in the last 12 months, according to report released Monday by Re/Max.
And in South Huron and Mid-Perth, basic 100-acre parcels are changing hands for as much as $1.8 million, up from $1.4 million in 2011, the Re/Max market trends report found.
“The market is strong,” said Kevin Williams of Re/Max a-b Realty, which has offices in Oxford and Perth Counties.
“We’ve seen land trend higher and it will plateau and then it will go back up again. This rise has been a little quicker than anyone expected,” he said.
Williams said higher crop prices, now treading in record territory, are partly responsible for the increase farm prices.
Another factor is few farms are hitting the market as farmers at retirement age are keeping their farms and renting the land instead of selling, he said.
“That is definitely tightening the supply,” Williams said.
Re/Max is forecasting farm prices in many areas will continue to rise.
While prices in Southwestern Ontario have surged, they are nowhere near the highest prices in the country in the Fraser River valley where farm land is bringing $40,000 to $60,000 an acre, the same as it did in 2011.
The soaring market for farm land, according to the Re/Max market trends report:
Woodstock/Stratford
Prices per acre have moved up to $15,000 from $9,000 just a year ago.
100-acre parcels are the most sought after
Properties sell within 60 days or sooner
Bruce County/Huron County
Prime farmland in South Huron and Mid-Perth commands $16,000 to $18,000 an acre, up from $10,000 to $14,000 an acre
Farmland moves within 15 to 30 days
Local buyers are leading the charge, but there is the odd offshore buyer of land
London-St. Thomas
Price per acre up almost $1,500 an over last year
Farm land selling for $10,500 in Middlesex East, $7,500 in Middlesex West, $8,500 in Elgin County East, $6,500 in Elgin County West, 9,500 in Lambton North and $5,900 in Lambton South
Chatham-Kent
Starting prices range from a low of $5,000 to a high of $16,000 per acre with the most popular price point between $7,000 and $90,000
50 to 100 acre parcels the most coveted
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