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2019-09 - Property Goldmine Scorecard - PETERBOROUGH - V3

REIN’s Property Goldmine Scorecard
REIN’s Property Goldmine Scorecard is a REIN exclusive methodology and tool designed to
give you a simple and easy checklist to follow. It is adapted from the books: “Real Estate
Investing in Canada” and “Secrets of the Canadian Real Estate Cycle” and from REIN’s
Long-Term Real Estate Success Formula. To be most effective, make sure you understand
all the key drivers and market influencers as detailed in the books.
For examples, check out REIN’s Economic Fundamentals Reports.
Create a REIN Property Goldmine Scorecard for each property you’re considering. If
you’ve already completed a current Scorecard for the region, you can easily transfer that
information onto your next REIN Property Goldmine Scorecard if the property is located
in the same area. Then you can complete the property specific questions. Keep these
completed cards in your property file and make it a part of your sophisticated investor
Property Address: _______________________________________________
City/Town: __________________________
Prov: _______
Neighbourhood: __________________________________
September 2019
Date of Analysis: _________________________________________________
Key Drivers
Key drivers are market factors that propel the real estate market through the real estate
cycle. They directly affect supply and demand.
Gross Domestic Product (GDP)
Is the area’s GDP growing faster than
the provincial/national average?
Is the area creating jobs faster than the
provincial/national average?
TOP 10 EMPLOYERS: 1. Peterborough Regional Health Centre - 2,000 2. City of
Peterborough - 1,257 3. KPR District School Board -1,250 4. General Motors (Oshawa)
-1,000 5. Fleming College - 987 6. GE Canada - 950 7. Trent University - 946 8. Ministry of
Natural Resources - 865 9. Central East Community Access Centre - 803 10. AON Inc. - 734
Does the area have more than one major
Are there more first-time home buyers
than the provincial/national average?
Housing Market
Are real estate prices increasing?
Peterborough’s median income is $64,437 at 3.3 per cent growth rate.
The provincial median income at $74,286 which rose at 5.2 per cent
growth rate. The median household income in Canada is at $70,336
The largest employment in Peterborough is the health care and social assistance sector followed by
the retail trade sector. Here are its top 10 major employers: TOP 10 EMPLOYERS: 1. Peterborough
Regional Health Centre - 2,000 2. City of Peterborough - 1,257 3. KPR District School Board -1,250
4. General Motors (Oshawa) -1,000 5. Fleming College - 987 6. GE Canada - 950 7. Trent
University - 946 8. Ministry of Natural Resources - 865 9. Central East Community Access Centre 803 10. AON Inc. - 734
The largest employment in Peterborough is the health care
and social assistance sector followed by the retail trade sector.
Statistics Canada says Peterborough had such a population surge from 2017 to 2018 that it’s now
the fastest-growing CMA in Canada. According to July 2018 data released on March 2019,
Peterborough saw a 3.1 per cent increase in its population between 2017 and 2018 thereby
outpacing the national rate’s 1.4 per cent (at record high and double that of US growth rates), and
Ontario’s 1.8 per cent.
Is the area’s population younger
(median age) than the
provincial/national average?
Peterborough’s employment rate increased to 67.1 per cent from
61.4 per cent a year ago. The local rate remains higher than the
national rate at 65.5 per cent.
Does the area have more than one major
Is the area’s population growing faster
than the provincial/national average?
Is the area’s average income increasing
faster than provincial/national average?
Peterborough’s median age is 47 which is 5 years greater compared
to Ontario’s median of 41 and 7 years older compared to the
national median of 40.8 . Nonetheless, the statistics confirm that
18-34-year-olds are the fastest growing cohort in Peterborough.
Not enough data
The average price of homes sold in August 2019 was a record $469,313, jumping 11.6% from
August 2018. The more comprehensive year-to-date average price was $453,344, up 6.6%
from the first eight months of 2018.
Are real estate listings decreasing?
Sales activity is still running below-average levels, but is definitely on an improving short-term
trend. Jan 2019 data shows that active listings were at 362 at the end of January which is up
by 20.7 per cent compared to last year but still below average .
Are real estate sales volumes increasing?
There were 395 new listings in July, down 4.1 per cent on a year-over-year basis. Active residential
listings numbered 703 units at the end of July, up 2.9 per cent from the end of July 2017. The
long-term average of the year is 1,500 listings. Part of why home prices jumped up in Peterborough
in the last decades is because of low supply of homes and it is still on its way to recovery
Is the number of days to sell real estate
trending downward?
Are the area’s average rents higher than
the provincial/national averages?
Is the area’s vacancy rate lower than the
provincial/national average?
Median number of days on market was 17 Q2
of 2019, up from 15 days in Q2 of 2018.
Peterborough’s vacancy rate is at 1.5 per cent compared to 1.1 per
cent a year ago. The current rate is well below the national vacancy
rate of 2.4 per cent and even the Ontario rate of 1.8 per cent.
Is the area’s Affordability Index in the
Hot Zone?
Is the housing construction start number
lower than the historic average?
Is the area’s gross Return on Investment
(ROI) higher than the provincial/national
Average rental rates in Peterborough based on September 2019 data is at $1,226
which is lower compared to the national average at $1,910 while provincial rate for
Ontario is at $2,279 – the highest rental rate in Canada for June 2019
Not enough data
Housing starts for the City of Peterborough in 2017 is at 486 (556
for county), which is higher than its 10-year average of 431 .
Data from MoneySense indicate that the 10-year
annual ROI for Peterborough is at 4.62 per cent.
Market Influencers
Market influencers are factors that affect the perception of an impending change in the real
estate cycle. They have a temporary impact on the market, so it is necessary to be aware of
them, but not necessary to add them into your calculations.
Is financing readily available?
What is the current mortgage interest rate?
What is the inflation rate?
Peterborough Social Services provides loans to help people with housing
needs. There’s also the Housing Stability Fund as well as a provincial
Affordable Housing Program .
Current rate for 5-year mortgage interest rates range from 2.37-2.64 per cent .
No available data for Peterborough, ON
Are foreign investors influencing the real
estate market?
Not enough data
Are alternative investments giving poorer
returns than the real estate investment
Not enough data
Is public confidence in the real estate market
Is the area’s infrastructure being built to
handle the expected growth?
(Local town planning department. Look for expansion of water treatment,
sewers, commercial and industrial space, hospitals, and schools)
Is there a major transportation improvement
occurring nearby?
(Local town planning department, trains, planes and automobiles. Will the
region become substantially more accessible with the transportation
improvements? Don’t say YES until you see construction beginning)
Has the political leadership created a growth
(On-line or city hall. Read the minutes of council meetings; speak with
mayor or councilors to see whether the leadership is focused on bringing
new jobs and growth to the area)
Is the area’s Economic Development Office
(This is a key question. If the E.D.O. is difficult for you to deal with, you can
often assume that they will be the same for potential employers looking to
move into the region)
Are property taxes lower than the
provincial/national average?
Is the licensing of rental properties
Are there rent controls?
Is it an area of revitalization or gentrification?
(City Planning Department – Area Redevelopment Plan. Articles in media
about taking back the neighbourhood, and increased pride of ownership)
Is it in an area that is going to benefit from a
Boom’s Ripple Effect?
(Visit surrounding towns and regions. Is a real estate boom occurring in the
surrounding region outside where you’re looking? If yes, this is a sign of a
potential boom in your target area)
Some residents are discouraged after home prices went up due to lack
of supply. Market is still on its way to recovery, definitely some
improvement in volumes of sales but still everything is running below
The city has a 10-year housing and homelessness
plan review which aims to provide more homes for the
people. Other upcoming city projects include the
construction of new municipal parks and open spaces,
major sport and event centres, among others .
A major transit upgrade is coming up
for Peterborough. The $4.7 million
project is set to install an ‘intelligent
transit system’ in the coming years
The previous conservative leadership has been losing steam since
2014 which finally paved the way for the victory of Liberal Mayor
Diane Therrien in the October election. Her platform is to satisfy the
demands of communities who voted for her. The decline in the city’s
industrial heritage continues despite smaller industrial investments.
This forced the city council to arrive at consensus in a visionary
economic strategy that “rises above boilerplate and convention.”
They do provide economic data
readily available on their website
but not that comprehensive
compared to others.
Peterborough’s property tax rates are at 1.410 per
cent. Provincial tax rates are at 1.789394 per cent.
Unlike other territories, Peterborough has a very simple licensing process. The
requirement for landlords is working under the principle of providing “safe rental
units.” There is a By-Law governing licensing practices for landlord, but it is
generally simple and does not demand much from prospective investors.
There is an existing By-Law but not much about zoning, only
safety inspections and landlord requirements…
Ongoing Charlotte-Bethune Mega-project which is a major overhaul of the
downtown area. There's also the Brealey Drive Project, a plan for the
construction of an Arena & Aquatics Complex Project, Charlotte Street
Renewal, Chemong Road Reconstruction, Cleantech Commons, Crawford
Drive and Harper Road Extension and Reconstruction, Curtis Creek Culvert
Replacements at Tivey Street and Euclid Ave., among many others.
Peterborough is just 90 minutes
(140 kms) northeast of Toronto
accessible via hiway and rail links.
Neighbourhood Specific Information
Finding the answers to neighbourhood specific questions will often require an on-site visit.
Never simply believe the person who is selling you a property to answer these important
questions. Dig Deep.
Is the zoning of the neighbourhood
poised to change?
There is the Official Plan which was just amended in March 2019 and will
most likely be in effect by 2020 - rezoning of properties, land use, city
structure, roadway network, bikeway network, flood plains, development
areas, residential density, etc.
Peterborough is just 90 minutes (140 kms)
northeast of Toronto accessible via hiway
and rail links.
There is some speculation - banking on area's increased
population, its proximity to other city centers and how
quickly prices are appreciating in the neighbourhood
especially in Peterborough Central (in the city).
(City Planning Department – Area Redevelopment Plan)
Will the property value benefit from a
new development nearby?
(Visit surrounding neighbourhoods. Look for new or redevelopment projects)
Is there a lot of speculative
investment in the area?
(Has a major announcement driven values upwards, is there an
increased amount of investment
money pouring in?)
Are there amenities in the region that
would attract your exit target buyer?
(Before you buy, always think of who you will be selling to, to
make sure the property will attract that person)
Are there currently sales over list
price in the area?
Sale to list rate is currently at
105.73% based on zolo.ca
Current listings (supply) is higher compared to
demand (sold).
(mls.ca or your realtor)
Is the area experiencing a buyer’s
Are there more active listings than the
five-year average?
Active residential listings numbered 786 units at the end of August, an increase of
16.1% from the end of August 2018. Notwithstanding that increase, overall supply
remains at extremely low levels from a historical perspective.
What is the tenant profile?
General observations of the neighbourhood and tenant profile.
(Keep these notes as they will provide information for your final instinct check. Remember, you don’t have to live there, your target tenant does)
the housing market in Peterborough is performing below average. There is improvement in terms
of increase in volume and supply (short-term trend), but everything's still at below-average pace.
Home prices are way higher due to low supply and the public is not loving it...
One thing to note though, there is a huge population boost in Peterborough in 2017 making it "one
of the fastest growing cities" in Canada. And then there's a visionary economic regeneration plan
plus major transportation overhaul coming so there's a lot of promise there (also, Liberal Mayor
won October election).
Remember, REIN’s Property Goldmine Scorecard is just the beginning of your market
research and due diligence. It is designed to give you a very good overview of the
property’s potential. It is critical that you complete the remainder of your REIN’s ACRE
system, REIN’s Property Ladder, REIN’s Property Analyzer, and REIN’s Diligence Checklist
BEFORE you remove all your conditions on the purchase of an investment property.
Never skip a step and always do the extra 10% others aren’t willing to do.