Population Increase: South Asian Factor

According to the City Mayors Website, many of the fastest growing cities in the world are home to south asians (see here). No surprise to those in Toronto, as now South Asian's represent the single largest visible minority group (just edging out Chinese Torontonians).


Since there are more South Asians taking post secondary education than the population of Canada, this represents a great opportunity for Toronto businesses if immigration can be fast tracked and education/experience abroad would be better recognized. US's tougher immigration laws would lead Toronto to be a beacon of skilled labour for large US corporations looking to set up shop in Canada.

These initiatives were something close to the late David Pecaut, who saw skilled worker immigration as one of the tools to a prosperous city.

Why real estate investors should care about the Synchrotron

One question that I always ask: How can we find the towns where growth will be strong before anyone else knows about it?

To find up and coming markets is a difficult task, there is no one answer because there are multiple different factors working together...lots of research by Ajay and I helps us understand what's going on to spot trends.

What we have learned over all of our research: what a city and its residents do today will have a huge impact on its real estate for years.

So what does this have to do with the synchrotron? Everything.

In 2004, the synchrotron was built in Saskatoon for a cost of over $170 million. The synchotron in Saskatoon is world class and has many different applications. Companies from computer engineering to medical research rely on the synchrotron for their research; as a result, high paying skilled jobs are being created now and expect more in the future...which is great for real estate in specific neighborhoods in Saskatoon.

Right now change is happening at an accelerated pace as governments are spending their way out of the recession. A communities ability to mobilize local resources to get provincial and national funding will be key to it's future success.

While most cities realize this, they don't always make the right choices (hello Windsor...how does it look in hindsight building your schools around Chrysler).

Research what's happening around your town and see how you can profit from it.

Employment Diversity and Effect on Job Loss during the Recession

Thanks to Don Campbell for keying me on this fundamental.

When the Conference Board of Canada publishes its quarterly economic outlook for Canadian cities we take a particular interest in how they rate the diversity in the amount of industry groups for the town.

Diversity is a strong indicator for how resilient the town will be in the future when shocks to the local economy happen.

Resilience, rhymes with Brilliance, is defined as “the power to return to the original form after being bent or stretched; elasticity; buoyancy; ability to recover readily from illness or adversity

During the current recession the oil and gas sector in Alberta had overall job losses as the price of oil faltered and investment in Oil sands was postponed. Edmonton and Calgary have weathered the storm of job losses (in fact they gained 0.2% and 0.4% new jobs respectively) in part because the cities were diverse outside of oil and gas.

Toronto with its massive job market (almost as big as the combined labor force of Alberta and Saskatchewan) is an example of great resiliency. The number of people employed in Toronto has decreased 2.0% vs. the 2.3% loss for the entire province of Ontario (Ottawa has a less diverse economy and lost 4.8% --more jobs than the provincial average).

Toronto has survived the Nortel crash and it has survived the NAFTA transition away from manufacturing in the past...and will survive the global financial meltdown and the auto sector mess today.

As for the anomalies in Quebec and Vancouver...who cares!

I won't even begin to explain Montreal and Quebec City because I would never invest their anyway....one of the most anti-landlord places in North America and Vancouver is currently the real estate bubble capital of Canada because the homes are not affordable.

In closing:

Why should the diversity the local economy is a factor to look at when looking at investing in real estate in a town?

Diversity = More jobs created in good times and less jobs lost in bad times = higher population growth in good times and less population loss in bad times = more stable real estate investments.