In an article in the April issue of Canadian Real Estate Magazine titled: “Halifax – a safe harbour” I was quoted 6 times while commenting on our local market and about the economy and some great investments in the area. I thought I would copy and paste the Q and A that I was called upon to answer back in January. So here goes…
Here were the questions:
1. How has the city of Halifax grown and developed in the past year?
2. Why do you think the real estate market has been performing the way it has recently? (prices escalating)
3. What draws buyers into the area?
4. What is the current demographic of buyers?
5. In your opinion, what are some hot buys that investors can look forward to? Why are these neighbourhoods within the city good opportunities? (Please provide neighbourhood, property details, average price and approximate rental returns)
Here were my answers:
1. Halifax Regional Municipality has seen growth in all areas, but none quite as profound as “Dartmouth Crossing”. When development started 2 years ago it was the largest retail construction project east of Calgary & this year it is expected to surpass 2.2 million Sq. Ft. of retail space. We have also seen an urban sprawl with a number of new developments happening at once throughout Halifax Regional Municipality which is driven by a long approval process for high rise developments in the downtown area. According to CMHC stats for the area, the number of single detached housing starts went from 1207 in 2007 to 1175 in 2008. A change of 2.7%. Meanwhile the number of new apartment unit starts dropped from 969 to 700 in the same period. A negative change of 28%.
2. Our economy in the Halifax area is comprised of many different trades and sectors such as various government departments, military, aerospace, information technology, offshore natural gas projects & our many universities with attendance of over 30,000 students. We have seen a dramatic increase in demand for construction labour to support our high level of both commercial and residential construction activity. This, along with returning Nova Scotians from the oil patch is boosting demand for our very affordable housing (as compared to Fort McMurray).
3. We have a quality of life here in the Halifax area that is attractive to young professionals & retirees alike. As the saying goes around here, it is a great place to “live, work and play”. We have great shopping, low cost of living, affordable housing & a vibrant culture.
4. We have a good mix of demographics. Lots of young professionals buying their first home, retirees from central Canada choosing to settle here. We also see an increasing number of previous residents returning from Alberta citing reasons such as affordable housing and greater opportunities now then when they left.
5. There is a shortage of apartment complexes with more than 6 units for sale (on the peninsula of Halifax). If you are fortunate enough to find a good one it would prove to be a great investment due to increasing rents and property values. There has only been one of these sold in the last 2 years. The only one currently listed is 1.9M and has 11 rental units and a ground level pizza shop. Total income was $174,720 and total expenses were $43,496 in 2008. Net income equals $131,524 per year! With most of these buildings you can apply to have a condominium corporation created and sell the units off individually down the road. Similar condo units in this neighbourhood are selling for over $200,000 each.
Flats (3 or 4 bedroom Triplexes or Fourplexes) are more widely available and are very popular with the student population in the south end and central part of Halifax. The average price of one of these units is $500,000 and average Net income per year is $35,000.