Investors from the Greater Toronto Area have long paid attention to secondary markets, but few have travelled as far east down Highway 401 as Kingston.
Maybe they should.
Babcock Mills in Loyalist Township outside of Kingston is a housing development comprised of single- and semi-detached homes that can easily be duplexed to capitalize on the area’s high rental demand, much of which is supported by Queen’s University.
According to Shaminder Gogna, broker of record and founder of Condoville Realty Inc., a Toronto-based firm, the pool of renters in major Canadian cities is slated to billow as a consequence of housing affordability woes. Moreover, properties with rental suites offer homeowners a way to maintain their mortgage payments while also making a small profit every month.
“We are getting attention from Toronto because appreciation in secondary markets is higher than in primary markets,” he said. “Because the prices are lower, you’re either cash flowing positively or you’re very close to cash flow. This is a situation where you get appreciation and positive cash flow, whereas in primary markets you’re nowhere near cash flowing, and when prices drop, it tends to happen in those same primary markets."
“We’re tackling affordability and offering more rental supply now that homeowners will have a duplex working for them instead of just single-use homes. This is a unique offering from a new builder’s perspective.”
In particular, rental units at Babcock Mills will be attractive to graduate students, most of whom prefer not to live in university ghettos with their younger, rowdier peers.
“Renter demand is high. Kingston has one of the highest increases in rent, so for a landlord, it’s a great thing,” Gogna said. “Rental numbers have increased substantially in Kingston and the surrounding areas. We’re about a 10-minute drive from Queen’s and we do anticipate a lot of grad students don’t want to be in the university ghetto, so we anticipate having all kinds of renters.”
The development is part of a master-planned community in Loyalist Township, which falls between Kingston and Quinte West, and with a lot of young families in the area, the blend of singles and semis was a no-brainer.
Single-detached units range from 1,400-2,200 sq. ft and start from $709,000, while semis begin at $649,000, will be 1,450-1,650 sq. ft, and have a 2.5% mortgage buy-down for purchasers who qualify for it.
Upper-level units will have three bedrooms, 2.5 bathrooms, and a family room, while lower-level living spaces come with a kitchenette, bedroom, and bathroom. In taking advantage of a new provincial government plan to encourage more secondary units in a bid to attenuate the province’s burgeoning rental crisis, the houses will option separate entrances.
The development is quite flexible, Gogna added, in that the deposit structure is $60,000 which requires only $10,000 for six months.
The development is slated to close in 2024.
“Kingston has access to more 14.5 million people within a three-hour radius between Toronto, Ottawa, and Montreal, with Kingston right in the middle of that,” Gogna said. “That’s why there’s so much growth happening along the 401 in that area.”
