Conference Board of Canada forecast says it will be fourth-fastest growing city in Canada this year.
The Hamilton Spectator
Hamilton is a “city of opportunity” for corporations looking for alternatives to the congestion and overheated real estate market of Toronto, says commercial property giant Colliers International.
In a study released Thursday, Colliers says Hamilton is to Toronto what Milwaukee is to Chicago. The two medium-sized “anchor cities” have much in common, including a similar history of deindustrialization and recent revitalization.
But Hamilton is about 70 kilometres from Toronto, compared to 150 km between Chicago and Milwaukee.
“Major cities are slowly grinding to a halt,” said Colliers’ senior vice-president Sydney Hamber during a breakfast presentation in raw third-floor office space in the Right House building downtown.
Traffic congestion and high housing costs are making employment in metropolitan areas more difficult, said Hamber.
Colliers says Hamilton has five key attributes that will allow corporations relocating from the GTA to manage cuts and retain employees:
•Lower overall rent, taxes and development charges for the corporation and costs of living for employees.
•A highly skilled labour force.
•Redevelopment opportunities in terms of industrial and office stock and city incentives.
•Lower commute times.
•Lifestyle amenities, including natural and cultural.
While much has been made of the influx of Toronto buyers on the residential side, Hamber says the same draw of affordability and urban amenities exists in the industrial and office sectors.
“There is a significant supply and demand imbalance in the city. We are seeing multiple offers on some industrial buildings.”
He believes idled U.S. Steel Canada lands have the potential to bring as many as 24,000 jobs to the city.
“It’s all here if we want to go and get it … If the city plays its cards right, we will become the city of the future.”
Colliers, which has 16,300 employees in 67 countries, joins the Real Estate Investment Network and Foreign Direct Investment in citing Hamilton as among the best places to invest in the country.
Jason Thorne, the city’s director of planning and economic development, said he’s set a goal for his department to “make Hamilton the best place in Canada to start and grow a business.”
He acknowledged this will be a tall order and will mean examining all aspects of his department’s operations, from marketing and business attraction to making development approvals streamlined and predictable.
“But it’s what we need to do to keep this wave of interest and keep it going.”
He pointed out that Hamilton’s economy is measured as the most diverse in Canada. He said a range of city incentives have succeeded in luring investment.
“We are well positioned to continue this growth. By no means are we approaching the limits of growth.”
Hamber says when he began his commercial real estate career, he thought Hamilton was on the cusp of a turnaround.
“I’m a very patient man because it’s been 32 years and we’re in it now.”
Also Thursday, the Conference Board of Canada released its 2015 economic forecast calling for 2.7 per cent growth in Hamilton this year.
That places the city fourth — behind Toronto, Vancouver and Halifax, which are all expected to grow by 3.1 per cent.
Actual growth for 2014 was 1.7 per cent.
“Hamilton’s ongoing recovery is encouraging, especially in the city’s manufacturing sector where we are expecting activity to rise by 1.8 per cent this year and another 2.3 per cent in 2016,” said Alan Arcand, associate director at the Centre for Municipal Studies.
The report cites positive effects from the weakening Canadian dollar and the strengthening U.S. economy.
“With Hamilton sharing the hosting duties for the upcoming Pan Am/Parapan Am Games with Toronto, growth in the local economy’s tourism-related industries is also expected to be healthy,” said Arcand.
The Conference Board predicts overall growth for Hamilton of 2.6 per cent in 2016, which would put it third in the country.
The board predicts strong growth for 2015 in transportation and warehousing and non-residential construction, including projects at McMaster University, the new James Street North GO Station and the Hamilton harbour cleanup.
Among 13 census metropolitan areas, the board forecasts negative growth for only Edmonton and Calgary.
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Hamilton vs. Toronto
Population: 510,000 vs. 2.6 million
Class A residential rental rate per square foot: $15 vs. $54
Percentage of residents with a bachelor’s degree: 22 vs. 33
Unemployment rate: 5.6 vs. 7.6 (per cent)
Median home value: $269,000 vs. $439,000
Average commute time: 27 minutes vs. 33 min.
Source: Colliers International, Cities of Opportunity and Statistics Canada
A hot sellers’ housing market continues to drive up prices in the Hamilton area.
According to Teranet-National Bank home price index numbers released this week, the Hamilton area saw the highest year-over-year April home price increase among major urban areas in Canada at 7.59 per cent. That edged out Toronto’s 7.28 per cent.
But the numbers also indicate prices in Hamilton — which includes Burlington and Grimsby — have backed off half a per cent since a peak in December.
The home price index tracks homes that have sold at least twice since June 2005. Since that time, prices of those homes in Hamilton have increased about 57 per cent.
The average for the country’s top 11 urban areas is more than 68 per cent, led by gains of well over 80 per cent in Winnipeg, Vancouver, Calgary and Edmonton.