Investing in Canadian real estate, as with investing in real estate anywhere, requires a significant amount of planning, research and analysis. One of the first steps that you’re going to want to take is tracking down which area you’d like to invest in. You will eventually narrow this down by city, neighbourhood and even street, but first of all, you’re going to need to pick a province. The provinces of Canada of course differ in many different ways, but you’ve probably never thought of these differences in the context of your investment options. You want to make sure that you’ve done the appropriate legwork to make an informed and educated decision, so we are going to take you on a quick overview of one of Canada’s smallest provinces – New Brunswick – and give you some insight into what makes investing in real estate here so potentially attractive.
Table of Contents - Real Estate Investing in New Brunswick
One of the Atlantic provinces that stands along Canada’s eastern seaboard, New Brunswick is a small but proud area. It is one of the smallest of all of the Canadian provinces and is unique among the Maritime Provinces in that its landscape is heavily forested as opposed to the agriculture-heavy lands that mark most of its neighbours. Originally founded as one of the first European settled areas due to its proximity to the continent, New Brunswick quickly became a critical part of the area. It was one of the first four provinces to form the Canadian Confederation, so national pride and the roots of the country run deep here. Investing in New Brunswick can be a great opportunity for the right investor.
Key demographics of New Brunswick
One interesting thing to note about New Brunswick is that it’s Canada’s only bilingual province, with both French and English standing as the official languages. Many people might assume that Quebec has two official languages as well, but this is not the case. Quebec has more French speakers to be certain, but New Brunswick stands out as an even split between French and English speakers. Around 9 percent of New Brunswick residents only speak French, while just over a third can fluently speak both. For this reason, if you’re considering investing in New Brunswick it could prove to be quite helpful if you’re bilingual or can enlist the help of someone who can, as this can drastically increase the pool of potential renters, business partners and so forth.
Most residents of New Brunswick trace their ancestry through European roots, namely France, England, Ireland, Scotland, Germany and others. There is also a significant population of Aboriginal peoples here who bring ties to Canada’s earliest human history. Additionally, a significant immigrant population exists here, with most coming from the United States or Western Europe.
Furthermore, even though the province is one of the country’s smallest and Canada’s smaller provinces have typically borne the brunt of economic changes in recent decades, interprovincial emigration is fairly minimal here. This is due to several reasons, but primarily to the fact that its francophone population has deep roots and does not leave all that often. This suggests that investing in New Brunswick could be an attractive option if you’re interested in putting down real roots in a community and finding true value in this type of setting.
New Brunswick’s economy
New Brunswick’s economic picture is a big part of deciding whether or not to invest in real estate here, and its dynamism and diversity in this area can be attractive. Many New Brunswickers work in agriculture, with about 13,000 working in food production. Potatoes are far and away from the biggest crop, with apples, cranberries, and maple syrup behind spuds (as well as wild blueberries). Since the province is so heavily forested, the paper and pulp industry can also thrive here, while mining is also starting to become more and more of a factor after not being a traditional pillar of the economy.
With all that said, most New Brunswickers are involved in the service part of the economy. Social assistance, trades, and health care all count themselves among the biggest employers of residents, and tourism brings in hundreds of millions of dollars annually as non-residents are drawn by the natural beauty and cultural sights of the province.
Income statistics of New Brunswick
If you’re considering investing in New Brunswick, one thing that you should keep in mind is that the province has typically had a struggling economy over the past years. Although statistics typically change from year to year, it has most recently had the lowest per capita income of any of the Canadian provinces. This means that real estate investors who have their eyes on luxury properties, especially those that they wish to then rent out, should probably look elsewhere. New Brunswick’s renter profile is far more likely to be someone looking for an affordable housing unit that they can still afford even if they fall on hard times.
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Real estate snapshot of New Brunswick
As with virtually every other real estate market in the world, New Brunswick has taken a hit during the COVID-19 pandemic. On the one hand, this should be seen as a good sign – it means that people are largely doing their best to stay home per the recommendations of the government and health experts, and Canada is doing better and better in dealing with the disease as a result. On the other hand, the real estate market has not come to a complete standstill. Since life never truly comes to a halt, there are still real estate transactions happening across the province, so investing in New Brunswick could still be a very real possibility even during the uncertain times that we live in.
Let’s take a quick look at some numbers that can start to tell the story of New Brunswick’s recent real estate. When looking at the same month of April, the evolution of 2019 into 2020 tells most of the story. If we first look at the total number of homes sold, there were 472 sales in the province in 2020, which represents a decline of almost 43 percent over that same period in 2019. Furthermore, sales over the first quarter of 2020 represent a decline of 5 percent from the first quarter of 2019, a discrepancy that we can probably safely say can almost be entirely attributed to the pandemic and its fallout.
The average price of a home sale also declined over the past year. The average home sold in New Brunswick in April 2020 sold for a price that was about 2.2 percent less than what it sold for in April 2019. Finally, inventory is also dropping as fewer and fewer sellers put their homes on the market – a decline of 59 percent of new listings exists from April 2019 to April 2020.
All of these signs point to a real estate market that is in some degree of turmoil, but it doesn’t necessarily mean that it’s all bad news. First off, experts expect that 2020 will not show much of the volatility that marked the 2019 Canadian real estate market. There is expected to be much more consistency, especially once the worst of the pandemic is over. Additionally, this could represent a chance for a buyer who had been hoping to enter the New Brunswick market, since this buyer’s market can produce real value. Even though inventory is down significantly the homes that are on the market are still going for lower prices – probably because fewer buyers are competing for them as they wait out the threat of the pandemic.
New Brunswick Area Spotlight: Moncton
If you’re considering investing in New Brunswick, then your eye will almost certainly be drawn at one point towards Moncton, the Hub City. Not only is it New Brunswick’s largest city, but it’s the second-largest city in the Maritime Provinces with a population of around 72,000. Moncton stands in stark contrast to much of the Maritime Provinces as it has enjoyed a growth in population over the past several years thanks to a burgeoning economy that has drawn national attention. It’s been named one of the best cities in Canada for business, and one of the most friendly small cities for business in all of North America. Many companies set up their headquarters here, giving it the means to have a low unemployment rate that many other cities hope to emulate.
Moncton is also a cultural stronghold, with the Capitol Theatre, the Frye Festival and several car shows, food festivals and concerts all helping to provide a vibrant scene. The Moncton Wildcats are one of the most successful teams in the Quebec Major Junior Hockey League during their 25+ years of existence, boasting two titles, and have sent dozens of players on to the National Hockey League. Many other professional sports teams call Moncton home, so you can rest assured that with these cultural offerings there’s always some to do in this small but mighty city.
With that said, the Moncton real estate market has not been immune to the pressures discussed above, with home sales activity plummeting in April when compared to April of 2019. However, confidence remains high that a desirable market like Moncton will continue to see sustained growth and remain a desirable destination, especially for young people seeking economic opportunity. With that said, investing in New Brunswick could be a wise move if you focus your efforts on Moncton in particular. The buyer’s market that exists right now won’t last forever, and you’re more likely to find value now than you ever would have before. You have the chance to strike while the iron is hot and jump on a real opportunity.
New Brunswick area spotlight: Fredericton
New Brunswick’s capital city of Fredericton is another attractive option for real estate investors. It is the third-largest city in the province but remains prominent due to its cultural significance within the area. It boasts many museums, art festivals, playhouses and music festivals, and punches far above the weight usually afforded to a city of just 58,000 or so. The city’s architecture features a mix of buildings and styles that speaks to the long history of the metropolis, and the neighbourhoods are dotted with historic churches that help to compose the city’s skyline.
The city is also unique in that it’s bisected by the Saint John River, giving it two distinct regions called the Northside and the Southside. There are vibrant neighbourhoods all over the city, including The Hill (or “College Hill”) where the University of New Brunswick and St. Thomas University both maintain a presence. These types of college neighbourhoods can frequently present opportunities for investing in New Brunswick, as the desire for rental units is always strong among college students.
Summary of investing in New Brunswick
The real estate market in New Brunswick, like the markets across Canada, has taken a beating in the wake of the COVID-19 pandemic and the uncertainty that that has wrought across the entire country. The inventory of homes for sale here has fallen significantly, as have the prices of the homes that have been sold, but that does not all necessarily point to negative signs. On the contrary, this could be seen as a chance for the right person to start investing in New Brunswick. Prices are low, and if you’ve been considering getting involved in this area for a while now, this could be the time to take action and get involved.
We live in uncertain times, but there are chances for the right investor to make decisions that could help guarantee their financial well-being for years to come if they approach these choices responsibly and with a wealth of information at their disposal. We encourage all investors to do as much research as possible before making any sort of decision and to consult with as many people and sources as they feel comfortable speaking with.
To the Point Investing in New Brunswick
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