Farmers could benefit financially from this trend

Farm Financial Planner: Urban dwellers pay high prices for small land parcels

Farmers could benefit financially from this trend

There is a trend for city folk to buy country property to get away from the COVID-19 virus, city lockdowns and everything else associated with the world pandemic. It’s a pattern of outmigration from densely populated cities.

Farmers are potential beneficiaries. They can sell small parcels at relatively high prices. I have found city folk paying $50,000 for a two-acre plot, but price and value are in the eye of the beholder, as the phrase goes.

In Britain, where urban ex-migration is in full swing, an official of Savills, a prominent property sales firm, explained to the major newspaper The Telegraph in May last year, “There’s a feeling that this sort of thing (serious viruses) is highly likely to come again and that the country is a good place to be.”

Closer to home, it’s happening too. Explains Aubrey Arellanno, a real estate agent with Sutton-Harrison Realty in Brandon, “I sell country property a few times a year. It’s typically small acreages — one to 10 acres.”

Behind the moves from town to country is a business concept: selling a seven-figure house or condo in the city can generate enough money for buyers to purchase a bit of a farm, build or remodel existing structures and walk away with cash jingling in their pockets.

In small amounts of conversion, everybody is content, explains Rhonda Garratt at JC Realty in Regina. In Saskatchewan, purchases by city people moving to the country are usually under 12 acres. Banks issuing mortgages are happy with that size for farmland not intended to be financially productive, she explains.

Guy Shepherd is a farmer and realtor in Moosomin, Sask. He recalls a friend who bought 10 acres for $80,000, four miles south of the town. “He got utilities inexpensively because he was only a quarter mile to the next house, which had hydro and gas. He had to put in a septic tank and plumbing for it, add gas and hydro connections, but the cost was manageable.”

Once the farm to getaway home trend gets going, sales volumes can rise. In Haliburton, a few hours northeast of Toronto, there were 105 sales of country property with waterfront in 2019 and a substantial number for 2020, according to Toronto Life magazine. The concept for most buyers was to self-isolate in a pleasant home that could be a weekend retreat or, if the virus remains a long-term threat, a permanent, safe home.

“During COVID-19, we have had more rural buying by young families, I do maybe 35 to 40 sales a year to city folk moving to the country. Usually, the parcels are 10 to 40 acres at $6,500 per acre,” explains Ernie Hawrysh, a realtor with Century 21 Gold Key Realty in Steinbach, Man.

Taking advantage of this trend — of selling a little land at something like city lot prices — could put extra money in your pockets, and there’s the additional benefit of strengthening your community with new people in your neighbourhood.

About the author

Columnist

Andrew Allentuck’s book, “Cherished Fortune: Build Your Portfolio Like Your Own Business,” written with co-author Benoit Poliquin, was recently published by Dundurn Press.

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