Irrigation
The local irrigation belt, including land north of the Oldman River, offers some of the richest agricultural land in Canada. It's served primarily by four different irrigation districts, which convey life-giving water through a maze of canals and pipelines to what would otherwise be semi-arid scrubland in the worst dry years.
While row crop producers such as potato growers have long had an influence on land prices in the Lethbridge-Taber region, there's also relatively new demand coming from canola seed producers looking for the best land and locations.
As well, better crop science and genetically modified species have helped individual producers grow larger, higher-yielding crops.
Even traditional southern Alberta specialty crops such as sugar beets have been boosted by GMO science, to the point where crops yielding records of 30 tonnes per acre or more are not uncommon, notes Van Dyk.
"The demand is very strong. There is not enough land available to satisfy the buyers," he said, describing some parcels as attracting more than a dozen offers when they hit the market.
Van Dyk explains that, aside from the overall quality of land and what it comes with in terms of irrigation equipment, a parcel's value can also be influenced by site-specific factors: everything from primary highway access to who your neighbours are and what they want to acquire.
Higher prices
Certainly things are looking up from a few years ago. The cattle industry is better off than it was thanks to higher prices for beef, and the sugar industry is more stable. Less than a year ago sugar beet growers were wrangling with Lantic Sugar over a contract dispute that threatened to end beet processing at the Taber sugar factory. Now they are in the middle of a three-year deal and preparing for another crop in 2013.
Potato acreage in Alberta is also up. Harvested acres jumped to 54,000 in Alberta last year and the crop's total volume was up 13 per cent.
Spuds are a key contributor to value-added processing in the Lethbridge-Taber region thanks to processing plants owned by french-fry giants McCain Foods and Lamb-Weston.
And given the recent purchase of Maple Leaf's spud processing plant in Lethbridge by New Brunswick-based Cavendish Farms, the potato industry's appetite for prime land isn't likely to subside any time soon.
A healthy agricultural sector is also pushing demand for commercial and light-industrial land in both urban and rural municipalities, including Lethbridge, the surrounding County of Lethbridge, Taber and the surrounding Municipal District of Taber.
The MD is home, for example, to the new Western Tractor dealership on the fringe of Taber. Its 48,000-square-foot shop/dealership on 23 acres of land at Highways 3 and 36 is highway-frontage proof of investments taking place in the area, notes Cory Armfelt, whose contract duties include overseeing the planning and economic development functions for the Town of Taber.
"Obviously there's corporate confidence in the Taber market for agriculture," said Armfelt.
New business
Armfelt said the town issued some significant development permits in 2012 for businesses serving not only agriculture, but the oilpatch as well. The latter has been a key contributor to the Taber economy since the 1950s.
And while there's speculation that oil service firms will be focusing their sights further west (oil service giant Sanjel Corp. located in Lethbridge recently), the outlook for oilpatch businesses in Taber remains positive, Armfelt says.
There's also new residential development in the town of 8,500, and even redevelopment in the community's downtown with live/work developments, Armfelt says.
While Lethbridge and Taber may be the two leading urban municipalities west of Medicine Hat on Highway 3, they aren't the only ones.
Coaldale
Between the windy city and Canada's unofficial corn capital sits Coaldale, a community of 7,500, which grew over 21 per cent between 2006 and 2011 - a growth rate higher than those of either Lethbridge or Taber.
While Coaldale hasn't been able to attract the same scope of industrial and commercial development as its urban neighbours, it certainly hasn't stopped trying.
It wants to build on that with its new "Three for Free" commercial tax incentive program for new and existing businesses.
Under the initiative, new businesses breaking ground in Coaldale in 2013 will be exempt from commercial taxes for three years, with Year 1 starting January 1, 2014.
"We have to face the fact that all municipalities in southern Alberta are competing to draw new economic development opportunities," said Coaldale Mayor Kim Craig. Three for Free will actually stretch to offer a 75 per cent tax break in Year 4 and a 50 per cent break in Year 5.
Coaldale is hoping the program will push businesses already looking at Coaldale to a tipping point - one that will make them choose the site in-between Lethbridge and Taber.
While the agriculture land market is hot in southern Alberta, there's more caution on the residential front generally.
Housing
Southern Alberta housing prices averaged essentially the same for 2012 as they did for 2011, with the average December price dipping to just $240,459 - roughly 5 per cent below what it was 12 months before according to the Lethbridge and District Realtors' Association.
Also of note: Lethbridge has Alberta's highest vacancy rate for rental apartments according to Canada Mortgage and Housing Corp. That rate is 7.5 per cent, up from 6 per cent a year ago and more than triple the provincial rate of 2 per cent for Alberta urban centres over 10,000.
Still, building-permit values in the city were up in 2012 by about 24.2 per cent - much of that relating to a 47 per cent jump in the value of new single-family homes constructed in the city.
So what should potential investors in the rental market be thinking?
Well, they shouldn't be expecting the same rents landlords were collecting a few years back according to Amy Breznik, who runs Renter's Choice and Management with offices in both Lethbridge and Taber.
Breznik says newer fourplex units that formerly fetched $1,200 per month from good tenants in Lethbridge now rent for closer to $950 per month. Downward pressure on rental prices has resulted from reluctant landlords - folks who rented out single-family homes that they couldn't sell a few years back.
"Those people who never wanted to be landlords were pushing the market down," explained Breznik, who isn't sure she has seen the bottom of the rental market.
Now traditional landlords are having to compete more for tenants. "They're getting lower rent, and it's taking much longer to find a qualified tenant," she said.
from Western Investor March 2013
