Report predicts economic boom times ahead for Hamilton
The forecast study says the bay area’s 5.6 per cent unemployment rate will fall below five per cent in 2017.
http://www.thespec.com/news-story/61...-for-hamilton/
Hamilton Spectator
By Steve Arnold
Hamilton and the surrounding area is in for a boom of manufacturing jobs and soaring house prices over the next two years, according to a pair of new economic outlook reports.
A joint study by the Ontario Chamber of Commerce and Credit Unions of Ontario, supported by the Hamilton and Burlington chambers, predicts the Hamilton-Burlington-Grimsby area will "experience above-trend employment growth" in the next two years as the troubled manufacturing sector ends its lengthy restructuring.
"We expect some impressive economic performance from the bay area," said Helmut Pastrick, chief economist at Central 1 Credit Union. "The Hamilton area will experience ongoing growth and better growth than we experienced in 2015."
Specifically, the forecast study says the bay area's 5.6 per cent unemployment rate will fall below five per cent in 2017. That drop will be fuelled by the twin forces of more jobs and a lower labour force participation rate. A portion of the area's working age population has opted out of the workforce and this remains a problem in several parts of the country.
The report concludes manufacturing, tourism and transportation services stand to benefit from favourable external conditions such as low exchange rates while domestic sectors such as construction, real estate and retail trade will gain from low interest rates and improved economic conditions.
"This is all good news, it means all indicators are headed in the right direction," said Keanin Loomis, president of the Hamilton Chamber of Commerce. "We are seeing a real reboot of the bay area economy."
As positive as the immediate outlook is, Loomis said he firmly believes a much brighter picture will come into focus when the proposed light rail transit (LRT) system is installed.
"We are poised to really take off when LRT comes into the picture and does what it is supposed to do," he said. "Every single indicator is on an upward trend."
Improved job prospects will also boost the local real estate market.
The chamber report predicts a "slight slowing" in the rate of housing price increases here, although average prices are still expected to hit new highs. For 2015 the report predicts sales of 15,500 units, rising to 17,500 by 2017, with an average price of $500,000.
Housing sales and prices are poised to set new record highs in the Hamilton-Niagara area with a forecast of 28,000 residential units changing hands in 2017, up from the 25,000 units expected in 2015, which itself is a record high. The average residential sale price for Hamilton-Niagara is expected to hit $440,000 in 2017, up from $380,000 in 2015.
New residential construction, measured by building permits, also climbs each year in the forecast, reaching 7,000 units in 2017 — the second highest level to date.
That demand in the resale market will, in turn, stimulate new home construction. The report said the local home building industry is on track for 6,000 units this year, its highest output since 2006.
In a separate report, real estate giant Re/Max predicts people leaving Toronto seeking more affordable housing will continue to drive the local market higher.
"Hamilton's affordability relative to the Greater Toronto Area and good supply of single-family homes continued to drive demand in the region throughout 2015," the report concluded. "The average residential sale price in Hamilton rose approximately 10 per cent year-over-year to an estimated $360,275. Sales were up as well: there were 13,910 properties sold between January and October of this year, compared with 12,504 in the same period in 2014."
Brick bungalows on Hamilton Mountain priced around $350,000 were in highest demand, sought by young families and downsizers alike while in Burlington, the average residential sale price rose just over six per cent to about $573,100.
Conrad Zurini, of Re/Max Escarpment Real Estate, said much of the activity is driven by simple confidence.
"Low interest rates are a side story now. Today it's about rising confidence in the future," he said. "We're seeing employment prospects now that we haven't seen in a long time."
Those rosier job prospects are bringing millennials out of their parents' basements and into their first homes, creating the chance for others to sell and move into larger abodes.
For the future, he predicted the expansion of all-day GO service into Hamilton's east end will drive a real boom market there.
The RE/Max report found Hamilton offers a good selection of townhouses, semi-detached and fully detached homes in the $240,000 to $350,000 range. In the east end, Zurini said, it's possible today to carry a home for $1,300 a month.