Where will the next housing boom be?

According to the Kitchener Waterloo Association of Realtors, sales in the area increased 4.9% in 2015 over 2014, with an 11.8% increase in December 2015 compared to the prior December. Condo sales were up nearly 54% in December 2015 over December 2014, and the average home price was $367,121 — single detached homes sold in 2015 had an average price tag of $400,456; condos were $237,735. That’s a heck of a lot less than the average detached home price in Toronto, at around $1 million.  

Home to Google Canada’s engineering headquarters, BlackBerry Ltd. and numerous start-ups, as well as Waterloo and Laurier Universities, and with an area population of nearly half a million, it’s big enough to have most of what you need, provided what you need isn’t world-class theatres or Michelin-star restaurants.

Neighbouring towns like Elora and St. Jacobs have ample charm for weekend wanderers. Nearby Cambridge is another source of employment with Toyota and Loblaw among the area’s business leaders. Another sign of prosperity? Starbucks now proliferate.

Is Bloomberg News being hyperbolic then to call it Silicon Valley North? Heralding the province’s latest condo boom, Bloomberg recently reported that a 250-unit, $85 million project called District Condos sold out (and added 170 people to its waiting list) in three hours. Many units went to investors anticipating a 40% return before the building is even finished.

Bloomberg says shares in FirstService Corp., which will manage the property, have gone up 90% in the last year. In addition to District Condos, there are more than a dozen other condos under construction or planned in the region.

Like most trends, when the tipping point comes and the general population is attuned to them, it’s bordering on too late to take advantage. So if Hamilton was last year’s boom town and Waterloo is next, to really take advantage, it’s time start asking ourselves what comes after that.

University Suites in Kingston

A report published in 2012 by the Real Estate Investment Network called “Top Ontario Investment Towns 2013-2018,” made its predictions based on a number of criteria, many of them comparisons to the provincial average: is the area’s income growing faster than the provincial average? Is it creating jobs faster? Is the population growing faster? As well, is there infrastructure to handle growth? Is there more than one major employer? Are labour and materials costs growing? Will the area attract Boomers? Are the political leadership and economic development office progressive? Are there major improvements to transportation in the works?

The report went on to name its top 11, with Hamilton first, followed by Kitchener/Cambridge and Waterloo. So far, so good. If they’re right, then, Barrie is next, following by Brampton, Ottawa, Orillia, and the Durham Region. The Barrie boom isn’t so new, with two record sales years in a row; the area also boasted record low listings left on the market at the start of 2016, which is good news for sellers and bad news for those looking for a deal. Brampton, Orillia and Durham, too, are already on the radar of most would-be real estate magnates.

So what does that leave? I’m going to go out on a limb and say look east, to Kingston and Gananoque. Sales in the Kingston area were up a tick in 2015, a little behind the average, but inventories were down after a two-decade high in 2014 (9.8 months of inventory in December 2015, versus 11.6 the year before). Home prices rose by 4% year-over-year, compared to less than 1% in 2014. Total sales value was up 22.4% in December to $45.9 million over the year before, according to CREA.

Kingston ranked 23rd last spring on MoneySense magazine’s list of the 35 top Canadian cities in which to buy (based on value, momentum, economic strength and rental income potential). The average home price in Kingston was $302,452 in December 2015, up more than 13% from the previous December, with the average for the year at $293,375.

The private sector accounts for half of the city’s local employment, although Queen’s University is its biggest employer, followed by the Canadian Forces Base and Kingston General Hospital, the school board, correctional services, Providence Care, the city itself, and Hotel Dieu Hospital, all employing more people than its biggest private employer, Invista Canada, which produces polymers and fibres for nylon, spandex and polyester applications. (Yes, I had to look it up). Bell Canada employs more than 400 and a Tim Hortons distribution centre accounts for another 300+, but there is also a big insurance company, food services company and technology concerns.

I’ve always thought Kingston had that certain je ne sais quoi people like in a home town — it’s pretty, boasts a decent night life, is on water, has several qua restaurants, a fair share of interesting old buildings, a thriving coffee culture, welcomes a bunch of buskers every summer and has an active arts scene including a thriving music scene, and it is close to Ottawa, Montreal and Toronto and a stone’s throw from a US border. Plus, you can still get a detached house there in the $200,000 range. When was the last time you could say that about the GTA?