|
PeeverConn Properties
|
Abbotsford Economic Fundamentals
Below is a closer
look at the fundamentals driving our target market of Abbotsford,
BC. Increased Job Growth And Intra/Immigration Increased job growth and immigration are two major factors we use to determine that a towns increasing real estate values are being driven by fundamentals, not speculation. Major announcements of new jobs and major employers moving to an area are very good signs to watch for. In 2007, Abbotsford’s business permits jumped 108%, creating new jobs and more opportunities for people already in or getting into the labor force. Currently Abbotsford consists of many employment generating projects like the new hospital/cancer research center, which now provides around 1,000 fulltime jobs, and approximately 220 additional facilities management jobs. Also, with the construction of various commercial and residential buildings as well as numerous other developments such as the new Sports and Entertainment Centre, the Abbotsford Recreation centre and the new Cultural Center, jobs in all trades are on the increase. In 2001 Abbotsford’s population grew from 116,098 to 169,757 in 2007, while it’s total labor force seen a steady increase of 59,240 in 2001 to 87,000 in 2007. Abbotsford’s unemployment rate sits at an all time low of 4.8%. Real Estate Doppler Effect Often in real estate it is much more profitable not to invest in the center of a boom, but rather the surrounding cities and towns. When an area’s prices of real estate skyrockets, you will find that the surrounding areas will increase as well, only not at the same rate as the initial boom town. As prices continue to increase in the Vancouver area, we have found that people are now moving away from the city to the surrounding areas such as Surrey, Abbotsford, Langley and Coquitlam where prices are more affordable. Experts predict that the population of Abbotsford will exceed 200,000 in the next 20 years, driving real estate value upwards. Critical Infrastructure Expansion One of the most important fundamentals to watch for in a region is Critical Infrastructure Expansion. This may include transportation improvements, new sewer or water plants, new industrial parks, etc. All of which show signs of a region being pro-active in attracting growth. Recently, Abbotsford has been ranked as a top area to benefit by the Gateway Project, a series of transportation improvements across the lower mainland consisting of new bridges, Highway expansions, new perimeter roads and new rapid transit lines. Abbotsford will become more accessible as the expansion of the HOV lane on Highway 1, the twinning of the Port Mann Bridge and the completion of the South Fraser Perimeter Road will relieve the congestion that Highway 1 and the Port Mann Bridge are currently faced with. Once the changes are complete and Abbotsford becomes more accessible you will start to see population inflow; population inflow means higher demand; higher demand equals increased property values. Another key element in transportation infrastructure is the Abbotsford International Airport, which today is Canada’s sixth- busiest airport and is continually expanding. For 2008, the AIX will accommodate over 500,000 passengers flying all over the world. This kind of growth will encourage cargo air freight and other activity as well as add to the tourism industry bringing new people to the area. Net Wealth Effect (Increase In Disposable Income) Simply put, When people are earning and spending more money, prices of almost everything increase, including real estate. In monitoring this fundamental we watch for an increase in average income, decreasing income tax rates and increasing retail sales. From 2001 to 2005 the average income in Abbotsford increased from $27,717 to $31,733. in 2007, Abbotsford’s retail sales reached an impressive $4,073,693,555. With an all time low unemployment rate, and new jobs becoming available, wages in Abbotsford will continues to increase, thus benefiting the Abbotsford real estate market. Local, Regional And Provincial Political Climate Another key fundamental required in a real estate market is having a growth friendly political environment. What we look for as investors is an area with strong economic growth potential in terms of new industries and new jobs. We look for regions with a dynamic and forward looking Economic Development Office, as they have great potential for attracting employers. In 2007 Abbotsford’s business permits were up 108%, meaning new business and better opportunities coming to the area. Aerospace, agriculture, transportation, precision manufacturing and retail trades are Abbotsford’s primary economic engines. In 2007, Canadian Business Magazine ranked Abbotsford 14th as the best place to do business in Canada. Much of it’s success is owed to the merging of Matsqui and Abbotsford in 1995, which was a deliberate effort to enhance business. As a result, the attention of developers, investors and large commercial and industrial business was grabbed. Today, new industrial parks continue to emerge like the Abbotsford Technology Park (ATP) which is the first planned business campus in the Abbotsford Region striving to provide the best place to begin or to relocate your high tech focused company. With Abbotsford’s growth friendly political climate we will continue to see new business arrive and more jobs available in the near future, adding to make this region a more desirable area to live. |
As professional real estate investors, it is our job to seek
out markets which will provide us with an above average return, while at
the same time produce long term stability in our investments. We do this
by simply removing emotions, and focusing solely on economic fundamentals.
Doing this allows us to;