Niagara’s economic momentum second strongest in Canada;
New National Bank study cites red-hot housing market and sharpest increase in investment in non-residential building construction in Niagara.
NIAGARA — The turbocharged housing market in Niagara has helped to propel this region — long languishing with anemic growth and economic performance — to the second strongest economic momentum in Canada, according to a new study.
The National Bank of Canada’s new Metropolitan Economic Momentum Index examines the current economic momentum of 20 areas across the country, and found Niagara lagged behind only its direct neighbour, first-place Hamilton, on that front. Kitchener-Cambridge-Waterloo, Victoria, B.C. and Gatineau, Que. came in after Niagara in the top five areas.
The index looks at six key economic indicators including housing starts, home sales, non-residential building construction, housing prices and employment and unemployment levels.
The new National Bank study said Niagara’s powerful economic showing is being driven primarily by housing prices that have soared faster than almost every region in the country, and non-residential building investment that’s grown by more than 30 per cent.
The new findings confirm what many in Niagara have been sensing for some time: that this region’s long stagnant fortunes are being replaced by rapid economic growth, said regional chair Alan Caslin.
“The wind is at our backs and we have the economic momentum to continue to create real prosperity for our communities,” he said in a news release.
The province’s announcement that GO Transit daily commuter rail service is being extended through Grimsby to St. Catharines and Niagara Falls, the surging real estate market and private sector investment such as the massive new General Electric factory under construction in Welland shows “it’s a great time to live and do business in Niagara,” said Caslin.
Earlier this month, the new Royal LePage house price survey showed that in the last three months of 2017, the average price of a bungalow in Niagara rose 23.5 per cent over the same period the previous year, while the average price of a two-storey home jumped 23.4 per cent.
That was the second highest price increase recorded among 53 markets nation-wide, ahead of third-place Hamilton.
By contrast, nationally the average price of a home only increased 10.8 per cent year-over-year in that period, while two-storey home prices rose 11.1 per cent and bungalows increased by 7.1 per cent.
Caslin said Niagara’s real estate boom is a reflection of this region’s affordability compared to many other regions around powerhouse Toronto, and its outstanding amenities, high quality of life and “opportunities for investment that can’t be found anywhere else.”
The region outlined its strategic plan in 2014 for economic prosperity with more than two dozen strategic priorities. The new National Bank findings show Niagara is making headway on that front, the region said.
In November, statistics presented to regional politicians on mid-year trends such as housing starts and prices, applications for new developments such as subdivisions, and preconsultation meetings in which regional and local town and city planning staff give initial input to developers on proposed developments showed Niagara’s economy was firing on all cylinders.
Senior regional planner Richard Wilson said building permit values were up 29 per cent in industrial projects to $19 million, were up 46 per cent in commercial to $67.4 million and up a whopping 116 per cent to almost $50 million in the institutional and government category.
“Overall, there’s been a significant increase in development proposals throughout the region,” said Wilson. “It represents significant investment and growth in our local communities.”
Equally impressive, the number of pre-consultation meetings for developments still in the earlier planning phase jumped more than 50 per cent in the first half of 2017 compared to a year earlier, to 356 meetings, said Wilson.
Royal LePage said in its recent report that many of the buyers driving the Niagara home price surge are retirees from Toronto, and adjacent regions such as Barrie, Kitchener-Waterloo, and Cambridge.
Even with double-digit price increases here, we’re still hundreds of thousands of dollars cheaper than some competing regions in Ontario.
by Paul Forsyth
Paul Forsyth is Niagara This Week’s regional reporter, as well as Thorold reporter, covering a wide range of topics from politics to community and human interest stories. In his 30 years of reporting he has won numerous journalism awards at the local, provincial and national level.