“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.
“If people are interested in getting into the market, they probably have about an 18-month window before the impact of the job and population growth first begins to be felt,” he told The Chronicle Herald.
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.
Irving is expected to ramp up hiring and training in mid-2012, bringing as many as 11,500 new jobs to the province by the height of the shipbuilding contract in 2020.
Most of those new workers to Nova Scotia will likely rent – at least in the short-term – and not buy. 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.
None of that seems lost on investors from Ontario, B.C. and, especially, Alberta, suggests Bentley, who specializes in arranging mortgages for those niche buyers both in and outside Nova Scotia.
A large part of the attraction may be a dearth of inventory in their home markets, something already beginning to slow the acquisition of many, now prepared to hold onto their existing portfolio for an extended period.
“More investors are looking that the value gains they’ve made over the last five years of owning a property and they don’t line up with their targets, or expectations,” Randy Bett, head of BetterGroup.ca, an investor-focused realty group, told CREW Online. “It means that they’re deciding to hold onto the properties longer and focus on cash flow until market prices improve. As investors, we have made the same choice.”
Buying in Halifax is another strategy for investors likely to face some the same inventory challenges, but generally lower prices than in other key urban centres.
Those lower acquisition costs -- coupled with the steady climb in rental values courtesy of in-migration associated with the shipyard contract – should continue to attract outside eyeballs to the growing Halifax market.
Still, it also means they’ll face some significant local competition, said Bentley.