Reading through
mounds of materials by
expert/consultants on investment would lead one to conclude that
real estate investments are a good solid place to put your money. Well we
are not about to dispute that!
But not every real
estate market is created equal. Certainly the Maritime markets and especially
the PEI`s real estate scene differs drastically from that of Toronto's or
Calgary's. Were real estate markets in some parts are subject to wild up swings
and sudden downward adjustments, PEI has proven to be isolated from both in most
parts.
Property values on
the Island increase rather predictably from year to year with one
exception...Oceanfront. The past five years have seen a steady, healthy
increases in the price of water front properties on the Island. As most of
the Eastern Seaboard has been bought up and bid up, more individuals have come
to realize that true value lies on the little emerald island. Even with the
increase in value, ocean front properties are still a bargain when compared to
any other local on the Atlantic coast line. Moreover, the season is a minimum of
six month long (May to Oct) with mild temperate weather that offset more
expensive acquisitions south of the border were the summer season is somewhat
less attractive. As the trend continues, and with increasing interest in Island
recreational properties, the market prices are not likely to go in any direction
but upwards.
In addition, there is
still land available for development on PEI. Now having said that, you need to
understand that there is legislation in place to protect the Island from
unscrupulous developers looking to make a quick dollars at the expense of locals
and the environment, but this legislation does not impede properly conceived and
managed projects. We have enjoyed much success over the past few years
with projects like,
Sunset Dunes,
Granville on the Water, and
Sunbury Coves. All the
while, our partners in these projects have enjoyed financial success and the
satisfaction of watching their creative endeavours take form.
What about the
residential housing market; slow and steady is the answer. Average
property increases in Summerside range around the 3% - 4% mark per year and
Charlottetown's would be comparable if not somewhat higher. The key to a
residential market boom is apparent when we view Alberta. Economic
development equates to more demand for housing by migrating workers which drive
prices upwards. The likelihood of finding oil in PEI is not that
great however. But the principle involved in generating the wealth from
the market would be similar...jobs.
In a small local like
Summerside the creation of 500 jobs would be front page news for some time,
where as in Toronto you may get a foot note on page 53. When companies move in,
and they have, they bring with them a core of personnel to ensure a smooth start
up. In time some stay, while others return to the parent company. These events
can be traced in the local real estate markets as they correlate with increases
in new construction and real estate sells to accommodate the incoming work
force. Similar to Alberta, but on a smaller scale of course.
With the shrinkage of
the global, advents in technology and the strategic location of Summerside with
sea port, air port and road network, some have opted out of paying huge overhead
costs that accompany doing business in other parts of the world and settled
here. There is a formula for profit in real estate investments that becomes
apparent with this strategy.
If you were to buy up
land at current market values in the Summerside area, and then relocate
industries to the area creating new employment in the process. A
percentage of the work force would be migrated in to provide required expertise.
Since the market is fairly a tuned to demand, existing residential numbers would
prove insufficient for an y substantial in bound migration. You would in turn be
well positioned to develop those assets and stand to make substantial gains.
All be it dependent on the numbers involved in the migrating work force.
Food for thought.
