Guelph Residential Properties Will Continue to Gain Value
House prices in Guelph will continue to rise, Chris Bisson told a room full of real estate agents, mortgage brokers, real estate lawyers and clients at the Guelph Real Estate Pulse Conference this week.
“Homes in Guelph have always had good resale value and that’s not going to change any time soon,” said Bisson, president of The Mortgage Centre and organizer of the Tuesday evening conference.
Bisson also said over the last 45 years, homes in Guelph have consistently increased in value by almost seven per cent a year. He said big price swings in Toronto and Vancouver skew all the averages and have lead some analysts to conclude Guelph’s record is a “bubble.”
“Good things happen in Guelph,” Bisson said. “That’s why that (annual price growth) number is not outrageous.”
In his address Tuesday, Bisson also predicted “interest rates will be the same in 2014 for variable and fixed.”
Inflation drives interest rates, Bisson said, as he gave a rudimentary Global Economics 101 primer to explain why there’s such a rosy outlook here even though other countries continue to fight high inflation and low job recovery after the recession of 2008.
China’s economy is booming, for example, and while rapid growth often drives inflation upwards, China’s growth is coming from other countries, Bisson said. While devastating to those impacted economies — Mexico is particularly hard hit by China’s growth — the net effect for the global economy is unchanged.
Bisson said the United States — another global economic game-changer — is recovering from the recession because it invested in infrastructure when the dollar was strong.
“As a result, they are more productive and are seeing growth at two or three per cent. We can’t forget that seven million people lost their jobs in the U.S. It will take a long time for the country to get back to the 6.1 per cent unemployment rate. But it’s steady,” he said.
“Compare that to Europe, where unemployment continues to rise,” he said.
The price of oil also affects inflation, but oil is at $115 a barrel, which is the same price as 2008 before the recession. For these reasons, Bisson predicted mortgage rates would remain at three per cent for a five-year fixed.
Lloyd Longfield, president of the Guelph Chamber of Commerce, and Guelph Mayor Karen Farbridge also spoke at the event Tuesday — about the city’s economic outlook and growth plans as they relate to real estate.
Farbridge said the Places to Grow legislation has caused the city to re-examine its growth strategy. As a result, it has updated its official plan, downtown secondary plan, and transit hub.
Four commercial nodes in the north, south, east and west will anchor commerce in residential subdivisions with intensification along the key corridors.
She said development of the site of the Guelph Correctional Facility on York Road, now referred to as the Guelph Innovation District, will have a huge impact on the future of Guelph. The property is about 1,000 acres (436 hectares) which is larger than the University of Guelph campus’s 817 acres (330 hectares).
“You can see the size of it,” she said pointing to a map of the city. “It will be a key part of our future.”
Longfield said the city’s growth plan will add 55,000 more people and 31,000 more jobs.
“Our job at the Chamber is to position ourselves to make that happen,” he said.
Innovation Guelph, an offshoot of the Chamber of Commerce, is helping local businesses expand their products and markets.
Longfield said Guelph is also gaining a reputation as being a centre for water technology and solar technology, and has an arts centre.
“We’re lucky in Guelph. Now, we have to get this all working for us.”