By Don R. Campbell
Recently, the city of Orillia sold a chunk of Orillia Power Distribution Corporation to Hydro One, which will also be investing in building a $300 million advanced technology hub in the city.
How will an investment of this magnitude affect the real estate market in Orillia?
What big news for a city the size of Orillia.
The impact will be a positive, overall, for the City and will also put positive pressure on the housing market, stabilizing it and buffering it against any future downturns that the rest of the province may experience.
The diversification into a high-tech sector will help to make Orillia a more stable economy, not hit by as many of the up and down cycles that smaller centres often experience during a real estate cycle. The $200,000,000 figure being used would add a large increase to the town’s GDP and economy (see the importance of that as the foundation of the real estate market on the graphic below).
There are still some critical numbers missing in the equation to accurately measure the long-term impact on the housing market. The word “significant number” of high-tech jobs doesn’t provide enough fact; however, here is what we can expect in order:
- A jump in Orillia property demand in the coming few months as early buyers rush to get in, then:
- An increase in rental demand as construction based jobs move into town, then:
- Clarity on number of long-term jobs to be created – thus solidifying the “job growth” portion of the attached graphic.
- High-tech hiring to begin as construction jobs leave, thus keeping the rental market pressure high.
- Traditionally, it takes ‘new residents to an area’ two years before they step into the “buying of property” market (staying renters during that period). However, given the smaller size of the City and the soon to be lack of rentals, that cycle will move earlier and we will see the next phase of “property purchase demand” kick in when the hiring begins to staff the Hub.
Overall, Orillia will come out a winner as a city with a more diverse economy, a stable housing market, an increase in building to provide required housing. It will follow along the above Long Term Cycle quite nicely.