Will land prices drop in 2023? Hah!! The very small number of listings of bare land with land price drops tells the story: unless the land was overpriced, the price doesn’t generally need to be reduced to sell.
Bare land is purchased by the wealthy: those who can afford to build new custom homes, developers seeking to make a profit by building and selling new homes on the land; or deep pocketed investors who understand that, instead of land prices going down, they are going up, up, up!
Land Prices in Municipal Areas
The BC Provincial Government is pushing hard for increased density in municipal areas. Unlike the United States, where urban sprawl seems to be universally accepted, the tendency in Canada is to keep population concentrated in urban areas, allowing public services to be provided more easily. Will municipal land prices drop in 2023? Not as long as builders snap up any pieces of bare land and re-zone for higher density!
Land Prices in Rural Areas
How about rural areas? Are land prices going down there?
Once again – fat chance! Land prices in rural areas are driven by a patchwork of factors:
- Desire for a rural lifestyle: with prices in the City soaring, many homeowners are opting to sell their city home and move to the countryside where they can find peace and quiet, and perhaps have a hobby farm.
- Desire for a large house: municipal regulations increasingly limit the maximum size of house that can be built in the city. Prices for acreage in Langley soared in 2023!
- Desire for low taxes: “farms” pay much lower taxes than residences. Many enterprising homeowners have built large homes on acreage, and managed to qualify themselves as “farms” by making a very modest amount of money from “farm produce”, thereby reducing their property taxes to a tiny fraction of what they would otherwise be.
- Investment in farm land: many news articles have reported the buying of tens of thousands of acres of farmland by American billionaires, including Bill Gates and Jeff Bezos. The same trend is present, at smaller scale, among the less prominent wealthy. As the world’s population booms, owning farmland means owning the means of food production – which is always a good investment.
So are land prices going down? If they do, snap it up, because any price declines won’t last long!
