Investing in Windsor Ontario
Real Estate Agent · Windsor, Ontario · Member since 2017 · 835 posts · 214 votes
There is a lot of economic development going on in Windsor right now, so I've started this thread to keep people up to date on all the latest news. As we all know, economic development is directly correlated with real estate prices; keeping track of the latest news should help all us be better real estate investors. Check back regularly for updates!
Thanks for posing this info scott. I am a fan of your work! You are like a reporter but for investors of windsor.
In addition to the government-owned Gordie Howe Bridge currently under construction in Windsor, the Ambassador Bridge owners are finalizing plans to start construction of their (privately owned) twin span as well. Windsor MP Brian Masse is requesting a commitment from Ambassador Bridge development to invest into Windsor's West End (Sandwich town which is very close to the University of Windsor).
A similar plan was put in place with the Gordie Howe Bridge which saw approximately $20M in community improvement plans whic included:
Major investments like these in a heavily under-invested area of town can go a long way to gentrifying the neighborhood, and if Ambassador Bridge obliges and also commits big investment dollars, the improvement around the University of Windsor could get even better.
Major infrastructure projects like these are huge boons to local real estate markets as they increase the value of nearby properties.
https://windsor.ctvnews.ca/mp-masse-wants-community-benefits-plan-for-ambassador-bridge-1.4514238
Windsor-Essex has become a hot-spot for marijuana companies, and greenhouse tech companies are taking notice. Just outside of Windsor, on of the biggest weed players in the country, Aphria, has set up shop with its massive greenhouses and hundreds of thousands of acres of land. The marijuana industry is setting up to be a big one across the country and hopefully Windsor gets a big slice of that pie.
Key Excerpt:
"Part of our visits there were also business-to-business meetings, trying to identify potential investors to come to our region to help support the greenhouse sector that represents 75 to 80 per cent of all North American vegetable growers," said Santos.
The Netherlands has been specializing in "self-reliant" greenhouse communities, since the country doesn't have access to natural gas like Windsor-Essex. The result has been Dutch farmers teaming up to invest in geothermal technologies, which produces power without needing external sources.
A multi-billion dollar industry is on the horizon related to the sales of marijuana for recreation and medical use, Windsor is in a good position to take advantage of this growth going forward.
When investors think about Windsor, they should think about Michigan and they should think about Detroit. Being such close proximity to not only another world class city/state, but the most economically powerful country in the world, obviously bodes well for our local economy. We have thousands of cross-border employees who bring wealth back home from the USA, and I hope that the future sees many of these startups and tech companies set up satellite offices here in Windsor (attracted by our lax immigration policies).
Key Excerpts:
"Heavily fueled by its decades of cybersecurity software expertise and success — and boasting world-class unicorn companies that span consumer marketplaces, enterprise software, and automotive innovation — Michigan’s ecosystem has evolved in a way that bodes extremely well for the region’s economy, community, and entrepreneurs alike."
"One industry we aren’t surprised to see growing in the nation’s motor capital is, of course, mobility. With deep roots and unique expertise in the automotive industry, Michigan does not just see innovation with electric vehicles like Rivian (one of the unicorns I mentioned above); Ann Arbor-based autonomous vehicle startup May Mobility has gained considerable traction as well. Founded in 2017, May Mobility closed a $22 million Series A round in February of this year. The company has already deployed vehicles in Detroit and Columbus and is using its latest round of funding to expand to other cities. Finally, just last week Ann Arbor-based autonomous delivery robot startup Refraction came out of stealth mode at TechCrunch’s Mobility Session (and did so with venture backing)."
Let's hope that Michigans booming tech/automotive/startup industries keep fueling Windsor's local economy as well.
Hi @Scott Innocente,
I am looking to invest in some real estate in Windsor! I have lived in Peterborough, Lakefield, Guelph, Toronto, Vaughan and Richmond hill in the past 6 years. I think Windsor has lots of potential for the future and think its a good place to start my portfolio.
What kind of property would you recommend for first timer? I would love a house-hack type setup, where I live up top and someone rents the basement. Are there a lot of those in Windsor available?
Cheers
Hey @Quin Green. House hacking is a great strategy, especially in Windsor because prices are relatively low and rents are pretty high. For that strategy, I'd recommend a small multi-family property or, like you said, somewhere with two kitchens where you can live up top and rent the basement. Those types of properties pop up all the time, just got to watch out for them!
Windsor continues to progress towards a "big city" amenities by approving up to $150M to adding dedicated bike lanes, walking lanes, and public transportation improvements. "The plan could add $6 million in annual spending to the city budget. Also approved at Monday night’s meeting was adding the position of an active transportation coordinator as a first charge in the 2020 budget." Hopefully these moves go to bolster Windsor's overall attractiveness as a city to live, work, and invest in.
I like these moves by the city to improve walk-ability and "bike-ability" as these are the new trends that big cities jumped on probably a decade ago. You know what they say, "better late than never".https://windsor.ctvnews.ca/very-bold-ambitious-plan-windsor-active-transportation-plan-gets-green-light-1.4519660
For those unfamiliar with Windsor, Leamington is a small town just outside of the city and is home to one of the largest Marijuana companies in Canada, Aphria. They are currently in the process of implementing a temporary foreign worker permit to allow foreign workers to come into the country to fill jobs that many of the younger generation don't seem to have any interest in fulfilling,
According to the Windsor Star, "Under the three-year "Agri-Food Immigration Pilot," 2,750 workers and their families will be able to apply for permanent residency each year. The federal government says it could mean up to 16,500 new permanent residents.
Even if the Windsor - Essex County area gets a small % of these projected new permanent residents, it will further go to put pressure on an already tight housing supply.
Canada's lax immigration policies continue to bolster demand for real estate and I don't see that slowing any time soon.https://www.cbc.ca/news/canada/windsor/leamington-growers-temporary-residency-1.5222443?sfns=mo
FCA plans to invest $1.6 billion in expanding its Mack Avenue facilities with a new plant and $900 million to modernize its Jefferson North Assembly Plant. The plant expansion is expected to add 4,950 jobs.
It's important to remember that many tool and die feeder plants operate in Windsor and ship parts across the border, so any major investment in Detroit will bolster our economy here.
Detroit and Windsor continue to be the North American hubs for automotive and as long as the auto industry survives, that is unlikely to change (it would cost Billions to re-create the infrastructure we have here somewhere else).
Cycles in the auto industry are inevitable, but a complete death? Unlikely.
Large development projects continue across Windsor, specifically the core area, as incentives continue to attract private investment. The 147 unit building will be the largest project in Windsor in several decades.
Cheap real estate, incentives, rising populations, immigration, major infrastructure projects, and proximity to Detroit are all factors that, I believe, are attracting these major announcements. We are still 5-10 years behind almost every other city and are just starting to play catch-up.
With large infrastructure projects like the new bridges being built in Windsor come many auxiliary benefits. Millions of dollars are being committed to community improvement projects in areas surrounding the new Bridge locations. Further, large projects like these tend to attract investors to surrounding areas as they rush to get in before everyone else realizes the changes that are taking place.
"There has been $20 million bookmarked to spend on improvements within the communities of both Sandwich and Delray by builders of the Gordie Howe International Bridge project."
Roads, sidewalks, trees, landscaping, etc are improvements that go great lengths to increasing the value of surrounding real estate.
One of my favourite rules of investing is to "follow the money".
It's important to remember Windsor's place in the automotive world as one of the main automotive capitals in North America. Windsor is home to multiple generations of auto workers, massive auto plants with $10s of Billions invested, dozens and dozens of feeder plants and tool and die shops, and a transportation network with a direct link to an international crossing.
Simply put, Windsor isn't going anywhere on the automotive front. Despite cycles rising and falling, you can't count on Windsor being a mainstay in the automotive assembly world.
"About 400 people will be working at the plant, with two production shifts and three machining shifts. Production begins in October, said D’Agnolo. Ford communications manager Matt Drennan-Scace said he couldn’t confirm the number of people who will be working on the new engine. But he said a total of about 1,700 people will be working between that facility and the Essex Engine Plant when everything shakes out."
As the shift from old technology vehicles (internal combustible engine, outdated technology, etc), we continue to see major auto companies pouring money into research and development to catch up with the future. If you want to know what the future of the automotive industry looks like, go drive a Tesla!
I believe that Windsor and Detroit will continue to be major investment hubs as the Big 3 automakers start to shift towards electrifcation and technology, which should trigger at least a couple more decades of Billions of Dollars of investment.
Windsor and Detroit are the automotive centers for their respective countries, and I personally believe that this is unlikely to change because the infrastructure is already here which is what leads to investments like the Center for Advanced Mobility at Wayne State University. Keep in mind, jobs created in Detroit and surrounding area often bode well for Windsor with thousands of cross-border workers crossing the Bridge each day.
“This will be a leading global center for the future of mobility,” said Farshad Fotouhi, Dean of the Wayne State College of Engineering and Computer Science Professor. “The Center for Advanced Mobility will be the epicenter for academic and startup activity in the mobility sector for students, researchers, and global corporate partners in Detroit.”
Well, that didn't last long...GTA saw a brief dip in sales and prices over the past several months, but doesn't seem to have lasted too long as sales jumped 24% and prices continued to rise. I've personally been hearing about a housing bubble in Toronto for about 20 years, the odd dip may happen but never seems to crash.
Why is that? Pretty simple here, folks, supply and demand. Over 100,000 people move to Toronto every year from all over the world; that's an awful lot of condo buildings needed to house that number of people.
My theory is that wealth and populations will continue to shift west (to places like Windsor) as costs continue to be prohibitive in nearly every other city in Ontario.
One of the biggest drivers of real estate values is interest rates. Simply put, as rates drop, property values rise because of increased affordability. One new wrench that has been thrown into the system recently is the new mortgage stress test where banks must qualify you at a rate higher than current interest rates. The reason this was implemented was to make sure that people can still afford their homes if interest rates increase.
Many have argued that Canada's stress test is too strict and unrealistic and many believe that qualifying at 2% points higher than actual interest rates is unrealistic because that kind of increase nowadays doesn't seem likely any time soon.
Some good news for real estate investors is that Canada has lowered its qualifying rate from 5.34 to 5.19. The difference here is adds about 5% to a persons affordability. As is plain to see, when people can afford more they are likely to spend more. We should see a general nudge for real estate prices in an upward direction and I think this specifically bodes well for cheaper cities like Windsor.
Attention investors, Windsor continues to be the best place for investors to buy real estate in Canada. Prices are low (relative to the rest of the country) and rents continue to climb. There is a large supply/demand imbalance and houses are getting more and more expensive (which means more people will have to rent!). It really is the perfect storm here.
I believe we have several more years to go just playing catch-up but the window will eventually close.
"Survey found that Windsor homeowners have had an annual return on investment of 11 per cent over the past five years, meaning an average homeowner gained $125,761 from selling after five years of ownership. Moneysense says average rents over the past five years in Windsor have increased by 11.14 per cent, while rental vacancies have plunged by 49 per cent during that time."
I think the future of tech in Windsor is under-rated. Detroit and Ann Arbour are quickly establishing themselves as tech hubs being home to tech behemoths like Google and Microsoft. I believe that Windsor will reap several of the benefits via cross-border employment, satellite offices, and more lax immigration policies which will likely add talent from countries around the world.
We also have the automotive infrastructure to attract tech talent and investment for the future of the autmotive industry which will likely included driverless vehicles, electric motors, software integration, and internet connectivity.
"The company declined to specify how many new jobs are coming, but said there will be a "significant" addition. Google currently employs about 600 people in Michigan, mostly in advertising sales and technical support for services such as Google's cloud-computing platform.
Google plans to spend $17 million on the expansion work and is not seeking any development subsidies."
https://www.freep.com/story/money/business/2019/06/10/google-detroit-ann-arbor-jobs/1408818001/
I get people asking me all the time "what goes on in Windsor other than automotive? Why are real estate prices rising so quickly?" I think people forget that Windsor is a University city which is a major employer and economic center for the city. Professors, faculty members, recruiters, researchers, CEOs, CFOs, maintenance workers, custodians, etc are all required to run an operation like a university so you can quickly see how vital this is to a city's economic capabilities.
Recently we've seen two large funing announcements for research at U of Windsor and this should serve as a reminder that universities are big economic forces for any city that is lucky enough to have one.
https://windsorstar.com/news/local-news/glier-receives-9-1-million-grant
hey @Hai Loc, did you end up investing in Windsor? I'm looking into it as well. The prices are really cheap and I am there once a month as it is. Anyone have info on Windsor? Is it a good time to get in there?
@Dominic Battaglia look through my thread here for more information on Windsor catalysts. We can set up a phone call as well if you'd like to discuss further.
A lot of rumblings about the elimination of the third shift for FCA Windsor and rightfully so. FCA just announced that they will be dealaying the elimination until the end of the year as business is better than expected. Local FCA union is also fighting for new products in Windsor to keep the third shift in tact.
FCA is one of the biggest employers of the city so this is certainly big new, though I don't think it willl have as big of an impact as many people believe.
First off, these laid off employees will be entitled to workers compensation for approximately 1 year.
Secondly, many of these employees may be offered buyouts and choose to retire, at which point they'd begin collecting pensions.
Thirdly, the unemployment rate in the city is so low that work is available for those who want it.
Effects from *potential* FCA layoffs won't be felt for a long time in my opinion and are unlikely to affect real estate prices any time in the near future.
A huge supply/demand imbalance for rentals in Sudbury has led the city to offer up to $29,000 in down payment assistance to get current renters to buy. I don't think this is too far off from what is happening in Windsor and many other cities across Ontario.
Keep in mind, real estate is arguably the most important part of any economy and governments will do whatever they can to support residents ability to purchase personal residences. This is what makes real estate the best investment on earth.
https://www.cbc.ca/news/canada/sudbury/sudbury-offering-up-to-29-000-in-home-buying-assistance-to-renters-1.5248372?sfns=mo
Infill projects are abound in Windsor. Infill refers to older neighborhoods being "filled in" with new, more expensive developments. Land prices are increasing and people are getting priced out of certain markets leaving less expensive land as the most viable option. Infill projects are capable of transforming entire neighborhoods by increasing the value of an entire block.
“We’re seeing more and more of them, and it’s not just South Windsor. Riverside is getting a fair share, Walkerville, those types of areas,” Hunt said, adding that when these new houses go up there’s often a strong reaction, either positive or negative."
People often ask me "where are the best places in Windsor to invest" and quite honestly, the answer is "almost anywhere". These types of infill projects are going on all across the city and depending on an investor's goals and investment criteria, almost any neighborhood is experiencing above average rates of appreciation.
I've been discussing this for a while now; Windsor continues to see positive migration. The article states "Overall, there were 3,103 more people who migrated to the area in 2016-17 than left and 2,299 more in 2015-16." Those numbers don't seem that large but even with an average of 4 people per household, that still adds demand for about 1350 households. 1350 households requires quite a few entire subdivisions.
Main reasons for migration include:
1. Most affordable city in Ontario
2. Proximity to Detroit (amenities, restaurants, entertainment, international airport, world-class city)
3. Weather: southern-most city in Canada
4. Cross-border employment opportunities
5. University city
6. Investors looking for investment opportunities
The main areas migrants left include: Chatham-Kent, Toronto, Middlesex, Peel and Waterloo.
“We’re seeing a lot of regional gains from more rural areas,” Villafuerte said. “We’ll analyze that more in the future.
“We’re also seeing a lot from Peel, York and Durham, which may speak to our affordability.”
I find the choice of wording here quite interesting: "dire shortage of affordable housing". I've been talking about this on the thread for a long time now and simple market fundamentals should tell investors (supply and demand) should tell investors what to do here. So how can investors take advantage of this shortage? Easy, start to buy up the lower-priced real estate in the city that are in at least decent locations and start renting them out.
There is a dire need of affordable housing in the city which is another way of saying that housing is not affordable for a growing number of people. That also means that more-and-more people will need to RENT. Start providing people with what they need just like any other business seeks to do, match a product with a demand.
A new wave of potential business is about to hit Windsor's downtown core. A Windsor applicant has been approved for a retail cannabis store in the most recent Ontario lottery and this shop is likely to set up right downtown. I like the idea of cannabis shops in Windsor because I think this will attract more cross-border visitors and tourists providing a boost to our downtown economy.
“I think this is a really good thing for downtown and for the city,” said Brian Yeomans, chairman of the Downtown Windsor Business Improvement Association.
Additionally, many are hopeful that this shop spurs other business to spring up around in the area: “People are going to want to develop around it,” said Yeomans. “From what I understand from other locations in the province that have opened them, it’s generated interest from other businesses. It could potentially increase the walking traffic downtown. I’ve said on many occasions that walking traffic is something that the downtown needs more than anything else.”
Legalized cannabis shops should dissipate black market marijuana sales and the illegal activity associated with it.
All-in-all, given the proximity to the US border, and major Marijuana producers like Aphria, Windsor has the potential to become a major economic center for the burgeoning cannabis industry.