THUNDER BAY -- Low interest rates and rising employment in the city continue to drive up house prices.
Housing prices in the city have risen 14 per cent in 2012, according to the Canada Mortgage and Housing Corporation’s Fall Housing Market Outlook Report.
The city has a strong resale market based on the basic supply and demand principle, said Wendy Siltamaki, vice-president of the Thunder Bay Real Estate Board.
“We just don’t have a very strong inventory right now,” she said Friday. “Therefore it is increasing the demand that’s what’s driving our prices right now.”
But Siltamaki also credits a 4.9 per cent rise in the employment rate in Thunder Bay.
While the number of people coming into the city usually break even with the number of those leaving, Siltamaki said they see the boom in the mining sector as a source of the increased activity in the market.
It’s also due to low interest rates.
“Those are phenomenal rates right now,” she said.
The average sale price for a house in Thunder Bay in 2012 is $193,000, well below the national average for centres with a population of over 100,000.
“We are a great market to get into right now, especially if you compare us to the western provinces and larger cities,” Siltamaki said.
The upward trend in the city’s housing prices has been steady for the last five to seven years and it’s expected to increase another seven per cent next year.
Unless the supply increases, the trends will stay the same.
“We have a current inventory of about 150 residential homes in the Thunder Bay city proper and until we get those numbers up, we’re seeing a continuing type market,” said Siltamaki.
The tight resale market caused single-detached housing starts to rise 6.4 per cent this year and it should rise another 5 per cent next year, said CMHC Northern Ontario market analyst Warren Philp in a release issued Friday.
“Meanwhile, starts of semi-detached, row and apartment starts will not keep pace with last year’s unusually high totals. Total starts are forecast to decrease by five per cent in 20102 and be unchanged in 2013,” he said.
