“In and around the shipyards, people who own property in that area are seeing dollar signs and they’re pricing with the recent announcement in mind,” mortgage broker and property investor Brad Compton, a former financial analyst, told CREW. “It remains to be seen how many migrant workers will actually be here on site, although there is certainly going to be opportunity for property investors looking to supply the demand for housing.
"But given the start dates for the project, there’s no harm in waiting as long as 12 months before purchasing properties in and around the shipyards site in order to give the market time to come down from its post-announcement excitement.”
Many property investors both in- and out-side Nova Scotia are now doing the exact opposite, many entering the market shortly after the federal government’s announcement in October.
Analysts are projecting that a 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.
Irving is expected to ramp up hiring and training in mid-2012, with hundreds of workers – from engineers to construction workers – expected to migrate to the HRM.
It is expected that the new contracts, both directly and indirectly, will bring 11,500 jobs to the province by the height of the shipbuilding contract in 2020, said James Shinners, head of Mortgage Managers Brokerage In.
Still, most of those new workers to Nova Scotia will likely rent – at least in the short-term – and not buy, said Compton. It means Halifax rental averages – some of the lowest of any major Canadian city – may increase by as much as 30 per cent to 45 per cent in the next two years, suggest some analysts.
Since the shipyard announcement, housing values surrounding the designated facilities have already climbed by as much as 3 per cent, according to some Realtors working the area.
Those values are likely to slip back closer to the HRM average of $215,000 by late 2012, said Compton.
The inventory is just as likely to be there at that time for investors willing and able to wait it out, he suggested.
Not all market watchers agree.
"I do not advocate buying on speculation (nor overpaying for a property) and rental market fundamentals are certainly crucial," said Scott Bentley, a mortgage market specialist with Verico Premiere Mortgage in Halifax."However, Halifax Metro with a population of 400k and a sizable number of investors vying for a limited number of suitable investment properties, likely will not see a price decrease in my opinion.
"It could be argued that if one were to acquire the investment property at this point in time with favourable lending conditions to see suitable cash-flow currently, they would also be in prime position as current owner of the property to capitalize on rent increases as the market dictates."