Citing astronomical cost overruns, Ontario’s Progressive Conservative government announced on December 16 that it would be pulling the $1 billion in funding that had been earmarked for Hamilton’s much debated LRT system, swiftly putting an end to a project that had enjoyed growing support within the city.
As debate continues to swirl around the cancellation, realtors who pitched Hamilton as a worthy alternative for real estate investors based partly – or largely – on the LRT’s imminent arrival now have train-sized gaps in their sales presentations. Those working markets where similar up-in-the-air infrastructure projects could be used to entice buyers can now dig through the wreckage of Hamilton’s LRT in search of lessons they can use.
Inexperienced investors lured to Hamilton by the prospect of LRT-boosted home values may currently be suffering from an acute case of buyer’s remorse. Avoiding such an affliction requires preventive medicine, generally a 200mg dose of reality.
“As a real estate agent, number one, until that construction memorandum is signed and sealed, I would be making sure my clients are aware that this is not 100 percent guaranteed,” says St. Jean Realty team leader Michael St. Jean, adding that agents should discourage their clients from basing their purchase decisions on a single factor, like the outcomes of a future infrastructure project.
“I am always making sure that I’m selling my clients on the investment opportunity as a whole and not to peg their decisions simply on one of the many items I could mention, but to look at it as a package.”
Rock Star Real Estate’s Paul D’Abruzzo says agents who give too much weight to a single project need to do some serious homework.
“To be frank, if your sales pitch was all about, ‘Buy here – there’s an LRT,’ then your sales pitch sucks,” D’Abruzzo says. “If you’re going to work with investors, you have to understand the deep fundamentals that make a market move. If not, you’re just a show pony.”
In addition to putting in the hours of research needed to wrap one’s mind around a city’s market, D’Abruzzo also suggests agents work examples of their previous clients’ real-world successes into their sales pitches.
“’These are the investors I work with. These are their results.’ That’s a much better sales pitch that’s immune to up-and-down economic factors that you can’t control.”
Hamilton has proven itself to be a very resilient city. It will survive without an LRT. Realtors in the city who featured the project too prominently in their sales decks may not be so lucky.