<i>"This is an article about sharply rising land prices in western Canada- Alberta and Saskatchewan specifically. 2% a year for decades, 20% the last two years, and most of that in the last 6 months."</i> It's coming your way... quickly. A lot of that probably has to do with proximity of shale oil & natty gas, especially Alberta. Twenty years from now, land there will have appreciated beyond current belief. Cover the carry costs, and there is no lower-risk long term hold than land in the right places. At current USD per acre you quote, I'm very interested in AB, SK or Manitoba acreage soon myself :>)
yea i mean isnt there quite a bit of truth in this? especially now that you are almost certainly chasing a train that has left the station compared to a few years back. Im sure as a storage of wealth, land will never be topped. I mean i think i would rather own land than t-bills, i'm not sure it makes alot of sense though to compare to trading.
The general problem with land is that there are real carrying costs such as tax that act like inflation moths to constantly nibble away at your value. My theory has always been that these costs/taxes are the very thing that help contribute to land's appreciation since who would ever think to sell for less than their total costs? The other problem with land is that depending on how far off the beaten path it is it is oftentimes a persons heirs and estate that end up benefiting from the slow appreciation. It can take a lifetime or two for "development" to advance toward one's property and construct roads etc. and make the land usable and more valuable. But I have become fairly wealthy by holding land myself. I chose the most desirable land I could find that I knew would be of prime interest to high-end custom home owners when I saw a scarcity of waterfront start to develop. It was easy to predict and the only barrier to entry was having to pay a high price. It was a stretch and the taxes were very high but I ended up making %444 return on borrowed money (from the prior owner) in 5 years. Believe me, the prior owner was happy to get his 6.5% interest on his personal note but about had a cardiac arrest when the title company called him 5 years later to report to our closing and to pay him off when he found out how much I made (or how much he would have made had he not sold to me). I'll never forget that outraged look in his eyes that communicated "you god damn smart bastard you paid me pennies on the dollar of real value and played me as a fool". But now I think the land owning game is going to be more challenging. Governments (especially the heavy tax-and-spend social variety like Canada) will eventually have little choice but to impose huge minimal-production land use taxes to encourage growth and tax revenues. In other words, if land owners of farm land or commercial land sit on it undeveloped and do not produce production revenue at a rate consistent with its highest and best land use they are going to disincentivize static/non-productive use of land to force its turnover to someone who will. Beware of politicians and tax collectors. TS