[randomdata]

That's driven by the farmland bubble. Southern Ontario farmland prices are up 700% since the mid-2000s, which has priced urban sprawl out of the market. With Toronto (i.e. the cities around the City of Toronto) unable to expand like they once were able able to, that has increased buying pressure on the land that is already within the city limits, thereby also driving up the cost of housing in those cities.

While Canada as a whole has recently seen some small increases to the cost of housing on the back of increasing lumber and labour costs, the country has a whole has remained largely stagnant, even falling in some cases. The gigantic gains seen, which bring up the country average, are limited to the prime agricultural areas, namely Toronto and Vancouver, where farmers are now willing to pay more than developers for undeveloped land. Something that is historically unusual.

[gruez]

>That's driven by the farmland bubble. [...]

>The gigantic gains seen, which bring up the country average, are limited to the prime agricultural areas, namely Toronto and Vancouver, where farmers are now willing to pay more than developers for undeveloped land. Something that is historically unusual.

Why is farmland in those areas so sought after? Were canadian farmland historically underpriced? Is the land just really good farmland? Are speculators buying it because of global warming?

[randomdata]

1. High prevalence of supply managed (dairy, poultry) producers. These farmers are effectively guaranteed a high income through policy. Said income provides a lot of room to buy land with.

Further, the way into these sectors is to buy what we call quota. Dairy farmers in Ontario imposed a price cap on quota back in 2006 in an effort to make it accessible to young farmers. While the fair market value of quota has likely doubled in the meantime, the maximum price you can pay is what it was in 2006. This means that there is even more cash floating around, that historically would have been tied up in quota purchases, in which to buy farmland with.

2. Increased profitability in agriculture in general. The US ethanol subsidy program of 2007 set the stage for significant increases in the price of field crops. As that program winded down and prices were coming back down, the US midwest got hit with three major weather events over the intervening years that decimated their crops, boosting prices again for those who had one. Not to mention that the US Farm Bill has been modified over the years to be more favourable to foreign countries like Canada.

[brendoelfrendo]

Do you think the legalization of marijuana has had an impact? I visited a cousin in Windsor back a few months before legalization hit, and the surrounding farmland was experiencing a huge boom in greenhouse construction, I assumed to house marijuana grow operations.

[antoniuschan99]

very interesting observation. I live in Toronto and it's the first time hearing about this. Can you point to any articles about farmland preventing urban sprawl?

It's interesting because back in the 2000's that was the main talk about how Urban Sprawl was going to ruin everything!

[poutine]

This isn't true. Costs of housing have spiralled out of control outside of Toronto and Vancouver -- here on Vancouver Island in Nanaimo the house I built in 2018 for $950k is now worth near $1.5M. Up 20% in the past year. It's nuts.

[jonwithoutanh]

>While Canada as a whole has recently seen some small increases to the cost of housing on the back of increasing lumber and labour costs, the country has a whole has remained largely stagnant, even falling in some cases

Kelowna? Calgary? Halifax? Are those places being driven up by farmland demand?

[oblio]

Are you building higher density stuff?

If not, the injury is self inflicted.