World Land Prices to Rise Soon – Knight Frank

According to one of the latest statements made by a UK-based estate agency, Knight Frank, farmland values across the world are to experience rises in the near future. Such countries as Australia, Canada and Africa in particular already witness an increased demand from land investors, specialists say. As the economic recession started, land prices skyrocketed in response to increased food prices; however, a decline in food prices in investor demand in the 3rd and 4th quarter of 2008 led to an equal decline in farmland values. Currently, industry specialists say that as investors are already expressing their interest in land, and as the supply of land and water is limited, prices should recover at a rapid pace. Knight Frank’s head of rural property research, Mr. Andrew Shirley, says that although farmland prices will definitely not skyrocket at a 2-digit rate as they did in 2008, they still will be increasing steadily, which finds proof in the fact that the recovery in this property sector started earlier than expected by many. Moreover, land is the only type of investment and property that was not hit as bad as others were. All individuals considering investment in farmland have to clearly understand several things. First, they have to have a lot of cash; second, they need to do a thorough research of different regions; and last, but not least, they have to be aware of the fact that land lacks liquidity and, thus, makes it hard for investors to redeem capital fast. On the other hand, farmland has always been considered one of the safest long-term investment options. World leading investment funds and investment advisors are already reporting an increase in the number of inquiries for farmland investment, which suggests that investors’ activity on the land market is picking up. The bad news, however, did come from certain countries, including those located in the South and North Americas. In Argentina, for instance, increases in farmland values are limited, while in 2009, US land prices saw the first decline in 2 decades.