According to Brian Rushton (VP of Century 21), he described the Windsor market as “very active”, offering affordable pricing for first time home buyers. We have devised some of the main socio-economic and geographical factors that influence home-owners, investors and potential migrants into Windsor. Let’s examine these factors more thoroughly
1. Effect of Student Population – University of Windsor
An investor must know the market in which he is searching for property or hire an expert to help. For investors seeking an income stream from rental properties, the most important aspects to consider are property location and market rental rates. As for location, many successful rentals are in close proximity to major schools. For example, if you buy a property near a state university, students are likely to want to rent it year after year.
2. Vacancy Rates/Ease of Lease
The Windsor Star reported on December 12th that “the rental apartment vacancy rate, which was 14.6 per cent at the end of 2008, stood at 5.9 per cent in October 2016 as per the results of the Canadian Mortgage and Housing Corporation survey. The vacancy rate in October 2012 was 7.3 per cent, which shows a healthy decline in average coupled with the CMA forecasts that anticipate a vacancy rate of 2.2% in 2018 and 2019.
According to CMHC market analyst Amran Wali, the vacancy rates in Windsor-Essex were lower than the monthly average for a two bedroom apartment in Canada which saw a 2.7% rise (at $989). A lower vacancy rate in Windsor-Essex area indicates homes being occupied and this is music to a landlord’s ears.
In regards to the ease of lease, Windsor is not in the GTA so it is not subject to the additional 15% tax on a foreign investor trying to lease a home. However, any investor is now subject to the mortgage stress test to determine liquidity and eligibility.
According to REMAX’s 2018 Housing Market Outlook, the typical first-time buyer demographic are young families moving into detached homes and town-homes continue to be the most sought after property types. Since Windsor shares a border with Detroit, there is an active economic influx that comes from across the border. This coupled with an active sellers market that is a result of low inventory levels has increased the pricing of homes in Windsor and is expected to see an increase of 9% into 2018 (Remax)
The construction of the Howe International Bridge is expected to begin in 2018 and is projected to place a rise in migration and employment as a result.
4. Lifestyle/Community :
Located in the far south of Ontario, close to the American city of Detroit, Windsor enjoys the warmest climate of any of Ontario’s cities.
Windsor’s climate is modified by its location on the shores of the Great Lakes. The water in the lakes ensures Windsor is warmer in winter and cooler in summer than it would otherwise be. The lakes are also the source of Windsor’s summer humidity, which many people find uncomfortable.
Retirement – Windsor has a growing population of seniors and this is expected to strengthen demand for health care professionals, lifting employment in the health care and social assistance sector.
5. Industry and Growth
Quarter 1 – 2017 (Source: WEEDC)
Rising Population (15+) – 329,400
New Investment Facilitated – 113,162,702
Building Permits – 79,221,500
Quarter 2 – 2017 (Source: WEEDC)
Rising Population (15+) – 331,700
New Investment Facilitated – 26,150,250
Building Permits – 147,563,934
Quarter 3 – 2017 (Source: WEEDC)
Rising Population (15+) – 334,600
New Investment Facilitated – 19,189,000
Building Permits – 79,993,600
Canada’s real estate market is governed by the seasons in the year – the slowing in the 3rd and 4th quarters of 2017 are a result of the colder weather that stops people from buying/selling homes. This results in a natural slow-down or calming that provides a platform for a greater rise in the first quarter of 2018.
The proof of this trend is depicted in the forecast below:
Source: CMHC (Starts and Completions Survey and Market Absorption Survey). Statistics Canada. CREA(MLS®). CMHC Forecast (2017-2019)
The report above depicts a positive trend and growth for the real estate market. This is shown by the projected increase in MLS listings and sales for both the New Home and the Resale market. Furthermore, there is an increase in average home prices (17%) and a decreasing vacancy rate showing promising signs of migration, occupancy and cash flow. 2018 and 2019 look to be a haven for optimistic investors and home buyers who seek a better future.
REFERENCES:
Gazo, Kim . “WINDSOR-ESSEX COUNTY ASSOCIATION OF REALTORS®Residential Stats President’s Report for SEPTEMBER 2017 |www.wecartech.com/wecfiles/stats_new/2017/sep/.
Wageningen, Ellen van. “Rental Vacancy Rate Dropping in Windsor.” Windsor Star, 12 Dec. 2013, windsorstar.com/business/rental-vacancy-rate-dropping-in-windsor.
“WINDSOR-ESSEX.” Housing Market Outlook, REMAX, blog.remax.ca/wp-content/uploads/2017/12/2018_HMO_EN_Windsor-Essex-797×1024.jpg.
Iamundo, Gabriella. “This High Speed Train Will Be Able To Take You From Toronto To Windsor In Just 2 Hours.” Narcity, Narcity, 23 Oct. 2017, www.narcity.com/ca/on/toronto/news/this-high-speed-train-will-be-able-to-take-you-from-toronto-to-windsor-in-just-2-hours.\