Quote:
Originally Posted by Ottawan
For the past year or so, there have been frequent prognostications about an apparently imminent economic downturn facing Ottawa. However, ever since the 2012 budget was released, with some detail of the extent of upcoming federal service cuts, I think we have actually seen an uptick in (ambitious) development proposals in this City.
Is Ottawa really heading for bad times, or just a transition period?
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In past downturns, new real estate construction has always overshot, and it is the worst indicator for what's to come (unless, perhaps, you can track the disparity between the forecast outlooks of developers' vs other sectors of the economy, and when it gets widest, get ready for a POP!).
The extent of the
actual public sector layoffs won't really be known until later in the summer (it takes a while to select the actual surplus people, then to figure who can be accommodated into empty positions freed up by retirements or people leaving to do something else, etc., etc.). So I would expect that the impacts of the layoffs on the region's economy won't begin to manifest until later in the fall, or maybe not till next year.
In the meantime, past downturns suggest that new real estate construction and proposals will far overshoot the downward-adjusting demand, and if there is a serious downturn in our economy (or even a good hiccup -- a temporary blip before people transition to other lucrative opportunities like opening waffle stands, kayak adventures and gourmet cupcake shops*), I suspect that we'll likely be left with more than a few fenced-in vacant lots and holes in the ground with their happy-active-yuppy aspirational lifestyle photos fading slowly off of the "Coming Soon" signs, and maybe a few half-built skeletons left "on hold" for a few years.
All that said, it's important to bear in mind that Claridge is talking about the 2016-range for their big Somerset and Preston St proposals, and I haven't heard anything about them moving on their Barbarellas site in ages... so maybe they're factoring for 2-3 years of uncertainty and a return to business as usual after that. They could be right, and they'll make a fortune if they are; or they could be wrong, and be bankrupt in a couple of years. Either way, I'm glad to be happy in our home for the next 5 years.
*"value-added"!