Omnigence examined the relationship between Canadian farmland values and long-term real interest rates from 1970 to 2025. Real rates were calculated using the annual average 10-year Government of Canada bond yield less annual CPI inflation.
The research found that Canadian farmland appreciation declined as real rates increased. During years with negative real rates, farmland appreciated by an average of 15.2%, with no down years. Average appreciation was 9.7% when real rates were between 0% and 4%, compared with 1.2% when real rates were 4% or higher.
All six material farmland drawdowns in the 56-year dataset occurred during periods of elevated real rates. Farmland also recorded double-digit appreciation during both the 1970s stagflation period and the 2021–2023 inflation shock.
The findings suggest that real interest rates have historically been an important factor in Canadian farmland price behaviour, although past results do not guarantee future performance.