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Employment, income lead to slowdown in new home builds, resales

THUNDER BAY -- Employment and income are the main factors in a real estate slowdown in the city.
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CMHC market analyst Warren Philp. (Jamie Smith, tbnewswatch.com)

THUNDER BAY -- Employment and income are the main factors in a real estate slowdown in the city.

The Canadian Mortgage and Housing Corporation says between the projected 155 single homes and 70 multi-family residences going up this year, builders seem to be backing off.

"We're going to be behind about 30 per cent over last year," market analyst Warren Philp said.

Forecasts into 2017 aren't much better, Philp said.

While the city has low unemployment, its employment level is down one per cent from last year. Uncertainty in the mining sector hasn't helped. The Bombardier strike could have also played a factor.

"I think it's no secret that at best it's kind of moved sideways," he said. "I think that all total did affect some consumer confidence somewhat."

With eight to 10 per cent increases over the past five years, the resale has been one of the hottest markets in the country. But employment and slow growth in income levels is bringing the sellers' market back into more of a balance.

"Those are two key ingredients for a household to look at the housing market and have confidence," Philp said.

Supply is up nearly 50 per cent from last year while demand, especially for high end homes, is starting to plateau and could even start to see price drops Philp said.





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