Niagara Falls: Hotspot on the rise?
Niagara Falls could be on the rise as a hotspot for investors.
The USA has been the number destination on TheMoveChannel.com for five out of the first six months of 2017, accounting for 1 in 12 of all enquiries by overseas buyers. According to National Association of Realtors, foreign investment in the last year has soared 49 per cent to $153 billion, a record high.
With property supply tight across the country, and with prices continuing to climb, investors are increasingly looking to markets where real estate is affordable enough to maintain strong potential for capital growth and rental income. Florida and Detroit remain the most popular states, with prices still below their previous peaks, despite sustained, significant increases.
New York is also a sought-after hotspot, accounting for 26 per cent of all enquiries for US real estate on TheMoveChannel.com in 2016. While New York is mostly associated with the prime property of the titular skyscraping city, though, areas such as Buffalo have become hotspots for investors, thanks to their lower average prices. Now, the neighbouring market Niagara may also witness a similar influx, according to agents.
Niagara needs no introduction to anyone around the world, thanks to its iconic Niagara Falls. The tourist favourite is visted by over 20 million a year, with 125 million people living with in a day’s drive and three world-class casinos bringing in 6 million visits a year.
Global Investments Incorporated say that they received “huge interest” in recent months from overseas investors, as the once quiet little city starts to be seen as a potential hub of investment and development. As of the start of 2017, Niagara Falls Redevelopment (NFR) has spent more than $90 million in the Niagara Falls area as part of its continuing effort to develop key parcels in downtown Niagara Falls. Amherst-based Uniland Development has recently revised its plans for the $150 million Wonder Falls Resort that will occupy much of the vacant Rainbow Centre Mall, while Canadian hotelier Michael DiCienzo reportedly wants to build a luxury hotel and daredevil-themed water park in the area.
As part of the rising sentiment, the tourist board has recently rebranded the area, with a new campaign based around the slogan “Niagara Falls USA: Where Adventure Comes Naturally”.
Global Investments CEO Mike Moodie says this is having a “huge” impact upon the housing market.
Indeed, Niagara Association of Realtors president Patrick Dummitt has forecast the increasing demand for property throughout the region to continue for years to come.
“According to Realtors across the whole of Western New York, the Buffalo and Niagara Falls housing market is red-hot right now,” adds Mr. Moodie. “Asking prices have risen to all-time highs and bidding wars can raise those prices even higher. The supply of housing inventory in the market has fallen 30 per cent across the area since this time last year.”
Global Investments Incorporated has teamed up with one of the biggest housing suppliers in the Falls area to bring refurbished and tenanted properties to market.
“There is no question that Niagara Falls is one of the best investment areas in the US right now, the problem is finding the right properties at the right price while market prices are on an upward trend,” he continues.
According to the Buffalo Niagara Association of Realtors, prices have surged 9.6 per cent in the last year to $147,400. With a 32 per cent decrease in the number of homes for sale, though, and the average time spent on market decreasing 21.8 per cent to 43 days, price growth is not about to slow down.
“Low inventory is the primary culprit for any sales malaise rather than lack of offers,” explains the BNAR.
Indeed, data from Zillow predicts that median prices in the area will jump 4.2 per cent in the coming 12 months. According to the Zillow, the median price of homes in Niagara Falls is $67,400, below the wider Niagara market median of $122,100. Both mark a notably lower entry cost than the Niagara market in Ontario. According to Niagara Realtors, the average property price there was $321,395 in 2016, up from $272,813 in 2015. Niagara-on-the-Lake is the most expensive market there, with an average price of $620,419 – up 23 per cent from $504,416 in 2015.
“If you were to take a similar property and drop it on the other side of the Falls you would be looking at paying over three times the price!” says Mr. Moodie.
The biggest price rise, Canada-side, was recorded in Thorold, one of the cheapest areas, with values up 24 per cent to $298,210. Sales up are 28 per cent in the district, though, indicating the strong demand for property around the Falls. On the US side of the water, the lower price point is comparatively even more appealing.
Moodie says that they have seen Canadian investors also express an interest.
“Niagara Falls is has now overtaken Ohio as our second most popular region,” Mr. Moodie concludes. “At this rate it will soon overtake Detroit.”