Tuesday, 19 June 2012 09:35

$25B Halifax contract attracts alternative lenders

Written by  Vernon Clement Jones
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Alternative lenders -- among them an industry leader -- are now pushing into Nova Scotia, just ahead of any boom expected from that $25 billion shipbuilding contract.

“Equitable has served borrowers in other parts of the country for more than 40 years and now it’s time to bring our specialized mortgage solutions to Atlantic Canada,” said company president and CEO Andrew Moor. “The reason to start now is clear: The Greater Halifax Area has enormous development potential. Not only is it an economic powerhouse today, it has the business, government and social assets that will drive the success of the entire province in the years ahead.”

He’s not only one looking at the HRM through a fresh set of eyes.

Mortgage brokers in the area are already grappling with an influx of property investors from outside Nova Scotia looking to ferret out opportunities stemming from a federal contract for the Irving family’s Halifax Shipyard.

The idea is to purchase and, in some cases, build single- and multi-family properties to accommodate the hundreds of workers needed to build the facility.

Equitable is well positioned to capture some of that business.

The lender is declaring its intention to become an important alternative source for single-family residential mortgages for the area “by actively serving the community’s mortgage brokers and their clients including: first-time home buyers, business for-self-borrowers, investors, newcomers and those with credit challenges, with a suite of fixed-rate, adjustable, fully open and high ratio mortgage products.”

Halifax is now in the sightlines of real estate investors from coast to coast, said Scott Bentley, a mortgage market specialist with Verico Premiere Mortgage in Halifax. “There are a lot of investors in other provinces, both with and without Halifax roots, now eyeballing, the Halifax market since the announcement.”

That interest is expected to steadily grow in the next year, with REIN head Don Campbell suggesting price growth will follow the same kind of trajectory and not the boom-bust of some Western markets coming to terms with their newfound economic wealth.

Analysts are projecting that the federal contract for 21 Canadian combat ships -- awarded to the Irving family’s Halifax Shipyard -- will translate into a $10 million shot in the arm for yearly real estate sales. That’s for each of the next 30 years.


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Last modified on Tuesday, 26 June 2012 08:27


  • SPB_DAL Tuesday, 24 July 2012 16:43 posted by SPB_DAL

    A shipbuilding contract Real Estate boom is not realistic. Yes it will create jobs but most of these jobs will be for (much) less than 100k per year, most probably in the 60K range. Assuming you are really optimistic, and the contract leads to a surge of families earning a 100k per year, all looking to buy houses and interest rates remain at their all time low (which they won’t). After factoring (a low estimate of) taxes and heating costs, someone coming in with a 40K down-payment would qualify for a maximum 25 year mortgage of ~380K enabling a total purchase price of

  • Richard Payne Tuesday, 19 June 2012 21:19 posted by Richard Payne

    Our economy in Nova Scotia has always been a little protected from the rest of Canada and we didn't see too much of the 2008 recession out here.

    With the shipbuilding contracts we have seen the speculative investors come in and start buying up properties that make no sense as an investment. That is driving up the price of investment properties here right now.

    Once the dust settles, contracts will get signed and then we will see who has been swimming without their shorts on!!

    We have a great future here and the fundamentals were strong even before the shipbuilding contract. Just now everyone in Canada (and out of!!) knows it as well.

  • Don R. Campbell Tuesday, 19 June 2012 11:38 posted by Don R. Campbell

    For the first time, Halifax has made it to our Annual Top Canadian Cities For Investment list.

    As these contracts are long term and will be implemented slowly over the coming decades, the impoact will be strong, but not dynamic.

    After the initial rush of property demand, the markets will cool. Then, following a time in which the market re-sets its foundation, will again begin to build strongly.

    The good news is, these projects come at a time of world economic confusion - so even as other markets in the country ride the economic rollercoaster, Halifax and region should be somewhat sheltered (not immune).

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