According to a Bank of Montreal analysis of the Waterloo-Guelph area, the regions economy and housing market should continue to cool slightly through the second half
of this year and into 2009. This decline is mostly attributable to weakness in the manufacturing sector which in turn is a result of a high Canadian Dollar and weak US demand. This said, the region is faring better than the rest of Ontario and Canada as a whole, and is very well positioned to continue in this leadership position as the economy strengthens and as Canadian companies adjust to operating with a higher Canadian Dollar. The research suggests five central factors that will support local growth over the medium term (2009-2012):
1. The Canadian Dollar has leveled off and should decline slightly allowing manufacturers to focus on improving efficiency.
2. US economic recovery which will improve our exports.
3. A youthful population and strong net migration which will support residential construction and retail sales.
4. Excellent educational institutions are a source of strength. All are growing, have strong community connections and are good incubators for new companies through their research programs.
5. The areas industrial diversification positions it for growth. Advanced manufacturing, information and communications technology and biotech clusters in particular have strong growth prospects.
Longer term outlook:
In 2006, the Ontario Government released ‘A Growth Plan for the Golden Horseshoe’. The Waterloo-Guelph area is considered what is to be the ‘outer ring’ of the Greater Golden Horseshoe. Surrounding the inner ring (Hamilton, Mississauga, Toronto…), the province plans to maintain a greenbelt, and will limit development in this area. Therefore, growth in the Greater Golden Horseshoe will leapfrog the greenbelt over the next 25 years into the outer ring. This should result in a rapid population expansion in Waterloo-Guelph. Specifically, between 2001-2031, the areas population is expected to rise 60% from 456,000 to 729,000.
This means solid increases in housing prices that make attaining a mortgage all the more attractive. See my other local information articles for more detailed reasons to have a mortgage in the Kitchener Waterloo Guelph Area.
For a more detailed look at this report, click HERE.
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