Estevan-based Mack Auction Company Ltd. sold six quarters of Saskatchewan farmland online in early December for $1.75 million, an average of nearly $300,000 for each of the 160-acre parcels.
Mack, which bills itself as Saskatchewan’s No. 1 farm real estate and equipment auctioneer, holds its auctions online in timed events that can last three to five days.
The auction of six quarter sections of land in the RM of Benson, which ended December 4, drew 800 bidders
"The auction was strong," said Norm Mack with Mack Auction, who added the value of Saskatchewan farmland was undervalued in comparison to other Prairie provinces for many years, but that is changing.
“Alberta and Manitoba, have seen higher land prices and people are starting to realize that, and that's why we see the increase of land [prices in Saskatchewan]. Also, in farming there have been some pretty good years. Farming seems to be aligned and strong in Saskatchewan and Western Canada, and therefore land is increasing in value," Mack said.
"Another reason that we can see land values are increasing is that current interest rates are very low. Some people with cash might feel that owning land is a better investment than having money in the bank. Or if they were to finance, it's pretty good finance rates now."
The Benson land was sold by timed online bidding, and the auction lasted five days.
"Some of the quarters broke the $300,000 mark and sold for $321,000, $307,000 and $304,000, something like that," Mack said. "We are seeing farmland creep up to that $300,000 a quarter."
Mack Auctions have been holding online timed land and equipment sales almost since the beginning of the pandemic. And, while in the first months there might have been some doubts, the online format has been successful, Mack said.
"All our auctions for farm equipment and farmland are timed online, so there are no gatherings at all. And it's proven to be very good. This is probably one of our strongest years in 15 years," Mack said.
The online format allows more people from other areas to participate in sales. Mack Auction Company was already set up for online sales even before the pandemic, so when COVID-19 hit Saskatchewan, it was an easy transition for them.
"Our software works good and people seem to like it; they don't have to travel. And we are seeing more bidders and stronger prices."
The company also just finished a sale up in Arran, Saskatchewan, and is expanding their reach on farmland and farm equipment. The company has auctions booked well into 2021.
"We like to think that we are sort of leading the country in the land auctions," Mack said.