Bridging New Brunswick

New Brunswick enjoys a central position in Atlantic Canada, sandwiched between Canada's industrial heartland and the north-eastern U.S. Criss-crossed by major transportation arteries, the province's historic mix of mercantile activities and a rich resource base is supporting a new tide of development with Fredericton at its heart.

Indeed, it has been recognized as one of the top 10 cities in North America for tech investment.

Centrally located, the city has a mix of the old money that characterizes the old port city of Saint John and the new money flowing from a mix of institutional and tech sector jobs, says Alex MacDonald, regional economist covering Atlantic Canada for the Canada Mortgage and Housing Corp (CMHC).

And the mix of real estate offers investors a broader cross-section than in centres such as Moncton, which has enjoyed renewed prominence as the region's hub city following construction a decade ago of the Confederation Bridge.

Fredericton, however, has a cross-section of advantages the other cities simply can't match. "It's got the military, it's close to the U.S. border, it's got a lot of science and tech," MacDonald says.

"It's smaller officially, but when you look at a lot of communities in the area, it tends to have some old money, some new money, some diversity in terms of higher-priced homes and lower-priced houses."

Housing starts in Fredericton are limited relative to the rest of the province, but the housing stock is generally older and 7.4 per cent of units require major repairs.

This indicates opportunities for investors to purchase and renovate properties to serve the needs of the city's student population as well as government workers. Approximately 40 per cent of the population rents, keeping vacancies low (3.5 per cent this past spring, CMHC reports) and demand steady.

While many of the temporary residents such as students and staff at CFB Gagetown will rent, others buy, contributing to steady turnover of properties and opportunities for investors. "You fi nd there's a lot of trading of properties and upsizing and downsizing," says Sean Daly, president of the Fredericton Real Estate Board and an agent with First Realty Co. of New Brunswick Ltd.

"You have a lot of people who are in for say, one-, two-, three-year terms, buy a home and move on."

Alternatively, some parents buy a property while their son or daughter is attending University of New Brunswick or St. Thomas University.

"When the son or daughter graduates, they either divest of the property or turn it into a full rental," Daly says. The steady demand also means there are opportunities for raw land investing on the fringes of the city. Fredericton's Northside, an agglomeration of communities across the St. John River from downtown, has seen several properties come to market in recent years.

"The only place you can now fi nd vacant land and new property development of any scale is on the Northside," Daly says. Developers are now subdividing them and building, creating new product that is setting new benchmarks in a part of the city that used to sell at a discount.

"Property owners have held on to this land for 20 (or) 30 years and now are deciding to subdivide it and you're seeing a lot of signifi cant development. And a lot of these old-time property owners are seeing a big return on their money."

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