Hamilton, Ontario
Growing up in Manitoba, I remember pointedly hearing nothing about Hamilton other than it was “some city close to Toronto.” I think once I heard someone mention it was a steel town. That’s about it.
Well, Hamilton, while indeed one of Canada’s now-defunct manufacturing powerhouses, has a bit of a different narrative lately than its US Rust Belt counterparts. Take a look at the image in this link. Go on. It would lose its grandeur if I re-sized it to put it directly on the page.
A thousand words, right?
Hamilton is an interesting place in that it’s a city historically at the heart of its own metro area that, paradoxically, is becoming a new suburb. The GO Train can now get you from Hamilton to Toronto in 45 minutes, and with the median rents in Toronto being a good $150+ more than Hamilton’s, all of a sudden commuting 70 km a day doesn’t seem so crazy.
We obviously tend to associate this kind of growth with a housing boom, and that certainly happened in the earlier part of the decade, but, not surprisingly, 2008 was an awful year for housing sales in Hamilton. That’s happening for a number of reasons, not least of which is the effect of young people. Folks who’ve just come of age and are finding their first apartments are a consistent boost on rental demand anywhere, but thanks to both the echo boomer effect in place (The Baby Boomers’ Children, who are accordingly the largest generation since the Boomers), plus the large student population in Hamilton, there are a huge amount of Millennials in the city, and all of them are trying to rent apartments as the younger ones move out on their own and the older ones are staying in their apartments instead of buying houses.
This is happening everywhere right now, but the size of the youth population makes it more pronounced here, and on the other end of the spectrum, Hamilton’s senior population (15% as opposed to Canada’s 13.6%) is pressuring rental demand as well; housing in Hamilton has gotten very expensive, and with the average 2 bedroom at $836, it’s no wonder some people are choosing to downsize out of their homes and rent instead. Meanwhile, the apartment supply actually decreased this last year from 42,506 units in 2007 to 42,390 units in 2008.
As you might imagine, the vacancy rate in Hamilton has started to plunge. A year ago it was 3.5%, now it’s 3.2%. And there’s room for it to go much farther down, just like there’s room for those $836 rents to go much farther up. This, again, is a key part of how we do business. A quick glance at vacancy rates across Canada will show you places like Sudbury or Kelowna where they’re below 1%. But those buildings are going for monstrous prices, and guess what, their vacancy rates have nowhere to go but up. We’d rather buy the buildings before they get to that point, and be the ones selling them at the monstrous prices. We’re looking at some cool buildings right now, and I’ll have some reports of what we’re looking at here up in a couple days.
As a final note, Hamilton’s also experiencing the creative class effect; it’s gotten to be a pretty big art city. The Downtown Arts Centre recently opened on Rebecca Street, as well as The Hamilton Media Arts Center on James Street North, a spot where galleries are popping up all over. The Hammertheatre Company opened there a couple years ago, dedicated to theatre research in Hamilton, and Le Centre français Hamilton is currently planning to turn a local theatre into a francophone cultural centre. According to 2007 statistics, 1.47% of Hamilton’s total labour force are cultural occupations, a figure that puts it around the level of fiercely-artistic Winnipeg. And you can bet that figure’s going up.
