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Kitchener-Waterloo Real Estate

5648 Views 6 Replies 7 Participants Last post by  the-royal-mail
RIM has just announced 5000 people will be let go.

Will this have a significant effect on KW real estate? KW has always had more expensive houses than other similar sized Ontario towns. Not quite as expensive as most of the GTA but definitely more than Cambridge, London, Hamilton, Oshawa, etc. My parents sold their house in Kitchener in the early 90s for 150k, it was a typical 3 bedroom house, built in the 80s, probably about 1500 sq/ft. Just for kicks I looked on MLS to see how much houses in that neighborhood were going for today. Most of them are in the high 300s and low 400s. And this isn't even one of the nicer neighborhoods in the city.

Reading a few Globe&Mail articles today about RIM, and several of the articles had interviews with people in the RE industry who were quick to point out that RIM's layoffs won't have consequences on RE in KW, claiming the region is still a technology hotbed, but I think they're underestimating the seriousness of the situation. Granted not all 5000 of these people are homeowners, and many will find other jobs in the same town, but I can't see how this won't still have a serious impact. And who knows how many more might be let go later if the company can't turn things around.
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I think it will have an impact, although it might be hard to measure.

It's not just the 5000 that are laid off (are they all in KW?), but every employee of that company will be less likely to buy a house or upgrade if that was in their plans.

There are probably other companies in the area that rely heavily on RIMM, so those employees might be thinking more conservatively as well.
I joked about this in another thread, but really its a bit hard to gauge. The 5k job cut is on top of the 2k they already announced last qtr. The 7k combined is clearly a significant amount of their employees, about a third or so, clearly some of these are in KW. This is not just laying off excess manufacturing capacity, I think they are at the stage of prioritizing their projects and cutting all non essentials. Survival mode. So its only a guess but I think a significant amount of that 5k is in the KW area. Is it 2k, 3k or whatever who knows for sure probably not even RIMM but even 2k jobs in KW thats quite an impact on the area. A Four Pillars alluded to, it also impacts other companies in the area. How much work does RIMM sub out, using consultants, contractors, etc. or even how much monies do they give to the 2 Universities there. All that money that flows out of RIMM into the community is also going to be cut even if it does not receive the headlines. The tap of easy monies for the region is off, can it stand with out it is unknown.

A KW area without RIMM is probably very comparable to London. I definitely see the RE market heading towards the London numbers but the simple fact that KW is closer to the GTA will give it a bit of a premium. As crazy as it is people do make that commute. Though it is kinda ironic that at the same time of this announcement VIA is cutting its service from KW to Toronto I believe right when they actually might see more demand in the next few months.
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The 5K is just the beginning as well... it's not going to get better for RIMM, and just about everyone who works there is (or should be) looking at their career options. I'm not familiar with the Kitchern-Waterloo market, but if RIMM is as big of deal there as everyone makes out, it can't help but affect it.
I know when they announced the GM layoffs in Oshawa the market there took a dive as people ran around crying that the sky was falling for a couple months. Good buying opportunities may make themselves available.
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^ What does that have to do with KW real estate? We are not google. Please do your own research or at least learn to start a new thread beforte hijacking someone else's.

In response to the OP, KW is a tough and competitive job market. I for one certainly think these layoffs will be devastating for the region and make it difficult for any young techies wanting to change jobs, move up etc. The added competition will be significant in an already-tough job market.
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