There have been big changes Prince Edward County vacant land prices over the last five years. The table (below) shows the average selling price per acre for vacant land without waterfront between 2013 and 2017. (There is a premium for waterfront which will be analyzed in a future post.)
Two things stand out from information in the table:
First, the cost per acre is higher for small lots and lower for big lots. This is expected because there is kind of a “volume discount” at work in vacant land sales.
More importantly, the table shows that over the past five years, prices have doubled or more. This occured in every size range except the smallest and the largest properties.
Toronto Demand Driving Prices
Historically, agricultural productivity drove the price of farm land. Agricultural productivity increased slowly in the last five year. In addition, prices were weak for agricultural commodity products.
Today it’s the demand for hobby farms and rural building lots that’s driving the increase in Prince Edward County vacant land prices. Much of this demand came from Toronto.
Some people come to the County deliberately looking for larger properties which can be used for hobby farms or private getaways. For the prospective hobby farmer, agricultural productivity has little impact on price. In fact, the view has a bigger impact on the price per acre than crop yield does.
During 2016-17, there was an acute shortage of listings in the County. Some buyers who came to the County looking for a house couldn’t find one because of the small number of listings. Some of them then decide to buy vacant land and build. This was a second driver for the increase in Prince Edward County land prices.
The upward pressure on vacant land prices is likely to continue as long as there is not a significant correction in the Toronto market.