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Life in Fergus & Elora – It’s like Winning the Lottery

Purchasing a house is an investment no matter whether it is a home for your family, a cottage for fun or an income property for generating…well…income. Real estate has proven over and over again to provide consistently solid returns and although this is generally a one way street of positive gains many new investors simply don’t know where to start. That old analysis-paralysis takes hold and attempting to scrutinize and time the market can become a full-time job, or more like a slippery slope into the cold abyss of no action and zero returns. I definitely identify as a cautious cat which is typical of my middle-aged mindset and peer influence. I’m afraid of losing what I have and am convinced that I won’t have the time to rebuild after a loss, which can seriously curtail any action to grow what I have into something that will provide a comfortable lifestyle for my retirement years. Sound familiar? Well read on and I’ll show you the hard facts on what to consider to take the fear out of your purchase.

Guelph has long been a prime investment landscape. A healthy variety of industry, academia, retail, transportation, infrastructure, and lifestyle has pushed demand and prices northwards to the point that the numbers may no longer be as investment savvy as 5 or merely 2 years ago. Your personal investment strategy will guide your moves when it comes to purchasing income property since positive cash flow and market appreciation rarely go hand in hand. If you desire monthly cash in your pocket then investing where your point of entry is lower makes more sense. However, if you are looking for healthy appreciation and are prepared to buy and hold while property values rise over several years then Guelph continues to deliver. Toronto money isn’t spilling over here for no reason, Guelph has established itself as the best place to invest and Toronto money knows a good thing when it is presented.  Some investors will be looking for a sweet spot somewhere in-between these 2 directives and this is where investing slightly outside of the core area may well deliver some substantial returns.

Fergus and Elora are experiencing new housing starts like never before and this is bringing a rejuvenation of sorts, a dynamic energy that is palpable and exciting. There are 1200 new homes being built by Storybrook in the North of Fergus, several hundred with Summerfields in the East, 800 in the South with Westminster Highlands, not to mention several infill executive communities via Granite Homes and WrightHaven.  A new hospital is under construction and there is the talk of public transportation. The pull of the Elora Mill renovation along with the creation of a substantial wedding destination, new eateries, unique retail and gorgeous trails are all a huge reason to celebrate Centre Wellington. We are primed for property values to markedly increase by association alone and so maybe now is the time to invest where you can still purchase a detached home in the $400’s, a townhouse in the $300’s, a condo in the $200’s and a fixer-upper in the $100’s. Familiar retail stores are entering the gateway, top chefs are realigning here from Europe, our amenities are growing and diversifying while independent stores and arts programs remain central to our community. First time home buyers are purchasing here because they are being squeezed out of the Guelph market and commute times to Waterloo and Guelph are shrinking as Centre Wellington boundaries creep ever wider.

Still not convinced? Let me show you some numbers …

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As you can see from the above table, the price of entry into the detached market is far lower in Elora and Fergus as compared to Guelph. Year over year appreciation rates in Guelph were huge in 2017 and I believe that returns so high are unsustainable in the long term. Slow and steady has been Centre Wellington’s model and fair gains are expected to continue as the region grows. Housing completions are strong and again are expected to continue with the development of new communities which will practically merge Fergus, Elora, and Salem together. Vacancy rates are low in the private sector and average rents are similar in both regions. Note also that professional property management companies are charging rents of approximately $1770/mth for a 3 bedroom house in Guelph and $1695 for the same house in Centre Wellington, setting the bar for private owners to follow.

All this aside, the village communities of Elora and Fergus are simply charming places to live and raise a family. The river connects us, pursuing sporting and artistic activities kindles friendships and there’s always the warm welcome of the local restaurants, coffee shops and pubs to seal the deal. Come visit for a day, you’ll most certainly be charmed enough to stay for a lifetime.

** All data extracted from Guelph and District Real Estate Association and CMHC statistics.