GoTrain and HWY 7 in the budget
After a couple of month’s delay (and an election) the Liberals put through their budget. The highlights locally are:
Expanded GoTrain service – Starting in 2016, we’ll have eight trips daily to and from Toronto, doubling from the current four trips a day. If only now it didn’t take two hours to make the one-way trip.
Four lanes of highway between Kitchener and Guelph. This has been on the plan for 50 years. Someday we’ll be able to get to and from Guelph without doing the bumper tap all the way.
Americans think our real estate is overvalued
Last week I mentioned that Canadian residential real estate price are predicted to rise until Christmas. They might go up by as much as 6% over the next six months. This week, we get another report saying our prices are already too high – 20% overvalued – predicting a 30% correction in the next five years.
Our prices are crazy of course. Prices up 8% in Calgary, 7% in Hamilton and 6% in the big T.O.
But prices are down on Vancouver Island, London Ontario and most of the East Coast. What the heck is really going on?
A bunch of things.
The economists are correct
First of all the financial agencies are correct. When economist and financial analysts look at statistics they find high household debt and low disposable income. They extrapolate that if interest rates were to go up by 2% then what would the effect be? They think thoughts like “what would happen if the unemployment rate were to increase, while holding all other things equal?”
But the economy is more complex than that. What is driving the residential real estate prices up in Calgary (oil) is completely different than what is impacting Vancouver (foreign investment). I studied economics. I know it is basically guesswork, voodoo and luck.
High demand. Low supply
In Calgary, Vancouver, and Kitchener Waterloo we have a situation where demand outstrips supply. There are a lot of people who want to buy and only a few who want to sell. It’s unbalanced. It is a “seller’s market”. When demand is higher than supply, prices of up
Low interest rates
They are low. Is is true that mortgages are harder to get now than they were two years ago, but it is also true that interest rates remain at historical lows. There is a lot of cheap money out there. As my friend Colin used to say, “If it’s free, take it”. A lot of people agree.
By the way. I never heard of Fitch Ratings before. Have you?
Mount Trashmore once more
Here is a picture of the day after the Big Music Fest at McLennan Park. All accounts of the music festival say it was a success. But parking was an issue and there weren’t enough trash cans. For anyone relatively new in town, McLennan Park is the former site of Kitchener’s city dump.
LRT and Waterloo Region’s growth
I was looking for a map showing the LRT stops and happened across this page. Here are the highlights.
Waterloo Region is the smallest North American city to build a modern electric light rail system. Edmonton is currently the smallest Canadian metro area with an LRT. Edmonton’s population has over 1,000,000 residents. Waterloo Region currently has just over half of that.
Waterloo Region has become one of Canada’s fastest-growing metropolitan areas. Within the next 25 years, we will double by half our local population. Waterloo Region is expected to have 725,000 residents by 2030.
Our land use plan concentrates development along out central corridor, which mostly follows King Street through Uptown Waterloo and downtown Kitchener. Think about that when you think about real estate. That’s why I was looking for the map showing the LRT stops.