Local investor to sell market's merits at national conference
Local real estate investor Richard Killeen-Payne isn’t holding his cards too close to his chest.
Instead, the co-owner of Invicta Property Investments will be flying the flag for Halifax and promoting the municipality as a hot real estate market that investors coast-to-coast should consider when he addresses the national membership of the Real Estate Investment Network in Toronto next week.
What the local real estate market has going for it is a long track record of modest growth, even before the shipbuilding contract came to town, Killeen-Payne said Wednesday.
“The number of multi-unit apartment blocks that have started over the last two years show that it’s not just about the shipbuilding contract,” Killeen-Payne said. “That contract has been a wonderful shot of adrenaline for the market and it promises more jobs ... and with more jobs comes (gross domestic product) growth.”
A recent Canada Mortgage Housing Corp. report shows there are currently 2,282 apartment buildings under construction in Halifax, one of the highest levels recorded in 50 years. About 1,000 units are expected to come on the market before the end of the year.
The construction of single-family homes was up 42.5 per cent in February over the same month last year and the corporation expects the construction of single-family homes will be robust in 2012 with about 1,100 starts.
The average sale price of single-family homes climbed to $396,622 in January, up from $383,329 in the same month last year, the report says.
Meanwhile, a report released by Colliers International last week put commercial sales volumes at $11.8 million, more than three times the amount transacted in 2010. The most sought-after assets were multi-family buildings, representing one-third of all sales volumes, followed by industrial and then retail properties.
The steady, upward-trending track record the Halifax real estate market boasts and the pending boon the $25-billion shipbuilding contract promises, is music to real estate investors’ ears, Killeen-Payne said.
“It follows the fundamentals of real estate investing, ..... which are population growth and job growth and, eventually, GDP growth,” he said. “Even in the days of the recession, property values in Halifax didn’t decrease.”
The shipbuilding contract has pushed prices higher in Halifax as savvy buyers make speculative purchases, Killeen-Payne said. But even with the increased market activity, there will unlikely be a so-called real estate bubble to burst.
“We will definitely see a cooling off in price but I think it will be more of a gentle exhale, to use the analogy,” Killeen-Payne said. “There is speculation taking place and the market is certainly busier at this time of year than it typically is but Halifax is still a sure place to invest. ... Unless you buy the wrong property, in the wrong area, there will be a return on your investment.”