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2014-07-09 at 17:21

Housing starts down

By Leith Dunick, tbnewswatch.com
91.5 CKPRWin Lunch with Danny and Laura for up to 20 people! Enter here to win on Thunder Bays Best Music 91.5 CKPRClick Here!

A local housing analyst says a flat-lined job market is a major reason why the housing construction market has plummeted in 2014.

According to figures released Wednesday by Canada Mortgage and Housing Corporation, total new home starts in Thunder Bay are down 49 per cent through June, compared to the same time period a year ago.

Builders have started 23 fewer single-family houses this year, dropping to 43 through the first six months. There were 10 fewer homes started last month alone than in June 2013.

Multiple units have also taken a hit this year, down from 62 to 22.

“We did expect to see a few more housing starts by now, but they really didn’t come,” said Warren Philp.

And the news doesn’t look like it’s getting any better any time soon, he added.

“We’re really not seeing that much on the permit front, which is kind of a precursor to more housing construction. We’re really not seeing enough to make us believe we’re going to have any kind of an earth-shattering year here in Thunder Bay.”

Having said that, the last four years have been slightly above average.

“We may be just settling back to more of a historic, more sustainable number for single-detached starts,” Philp said.

A strong re-sale market is also adding to the construction slowdown. Potential homeowners who previously chose to build because of a lack of inventory now have other options, he said.

“Now, if there are a few more listings on the resale market and they’re out there shopping for new construction or a resale, and there’s a few more resales on the market, maybe they’re opting for resales and not choosing to build,” Philp said.

The simple fix is a turnaround in employment levels.

With more people working, more people will be buying.

“Employment is key to the whole equation. We’d like to see stability with employers and we know that commodity prices have been tight, especially on the commodities side … Maybe some of those projects that really should be further advanced in Northwestern Ontario aren’t as far along as we had hoped and that might be creating this situation, to some degree, in terms of housing starts in Northwestern Ontario. “

 

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Comments

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portland39 says:
Could it also be that there is really no where desirable in this city to build a house. Last I checked there were no new subdivisions available to build in (I.e. Parkdale, River Terrace, and Mount Forest are all under construction for their next phase). Maybe if there were more options in this city available right now this wouldn't be the case hmmmm the Maplewood development comes to mind.
7/9/2014 6:31:32 PM
SomeGuy says:
There is several new areas that are being built. There's Gemstone, Nadine Contracting has one, There is that Whiskey Jack Estates and I think a few more that I can't remember.
7/10/2014 8:34:13 AM
sunforever says:
Gee I wonder why!!!!
7/9/2014 7:10:24 PM
Royalflush says:
I can afford a new house. But I cannot afford to pay the taxes on it. And soon those will be boosted even higher, so I'll just stay put, and spend my money on vacations in the U.S., and buy some new furniture in Duluth.
7/9/2014 7:40:48 PM
tsb says:
You can afford to spend $350,000 at once, but you can't afford $5,000 a year?

I find that kind of silly.
7/10/2014 7:24:18 AM
Royalflush says:
Well its not silly at all. I happen to have come into a bit of money lately, and so I can afford to buy a pretty nice house. Unfortunately, my income has remained stagnant for at least ten years. If only the taxes were $5,000.00, and remained there, but the taxes on the house I was eyeing up, are around $7500.00, and that will rise considerably inthe next few years. At that rate, I would have to give up my Tims coffee among other things, and I definitely would not be able to afford tickets to hockey or concerts at the event centre. Of course if they scrapped the event centre.......maybe........just maybe...........but naahh! That would mean Hobbs would have to abort his baby, and thats just cruel.

,
7/12/2014 2:19:25 AM
newhere says:
Could it be possible that the price point for new construction is beyond what the local market can support? It is my understanding that bidding wars erupt on houses priced under 300k. This is likely not sustainable. You would think, given the move to urbanization, some developer would look at condos, less than 1000 sq ft, but done up nicely and targeting the 30 something crowd. Algoma seems to have a couple of good sized empty lots.
7/9/2014 7:45:47 PM
conker2012 says:
That would be great, except the city has a ban on building over 30' tall the entire length of Algoma.

The city zoning is not urban friendly and we will continue to have sky high taxes unless we allow more high rise apartments and condos.

Wouldn't it be nice if the lot across from the former Hillcrest high school was another Waiverly tower instead of a field for people to let their dogs $#!+ in?

People actually want to live downtown, but due to the goofy anti urbanization bylaws only luxury condos are being build because they are the only ones that can pay the bills to build the places. There is only 1 condo in the downtown under $300k in Thunder Bay. There are over 50 in downtown Vancouver (The most expensive real estate market in Canada)..... We need taller buildings so that the cost per unit is less and more people can afford to live in condos downtown.
7/10/2014 10:38:58 AM
Arch Stanton says:
Apart from the fact that many people appear to be up to their eyeballs in debt already...
7/9/2014 8:10:52 PM
bubba says:
New house for 250G's +. No new good paying jobs. Age-ing population (fewer children). Not surprised. If the well paid job market doesn't improve that's the future. Maybe the world is getting flatter.
7/9/2014 8:39:23 PM
eventscentre says:
Don't worry, my house is going on the market soon. Not new, but in great shape. Got to get out of this hillbilly village where everyone wants everything to stay like it was in the sixties. And the mayor sticks up for everyone except the taxpayers. C ya
7/9/2014 9:41:26 PM
livewire says:
Maybe it's the developers. Seems it take for ever
for the developer to clean up the new sub-divisions. Unlike other cities the developments are a cleaner and are completed.
7/9/2014 10:32:28 PM
Teacher says:
Who can afford a 500k home in this city and 8k in land taxes? Prices are out of control?
7/9/2014 11:02:07 PM
tsb says:
Have fun in... I can't think of a less expensive city to live in than ours... :(
7/10/2014 7:25:52 AM
outsidelookingin says:
To Developers: build affordable houses, less than $250,000 they will go like hotcakes! Current resale houses have 5 to 10 offers on each one!

No one builds neighbour hoods like this anymore.
7/10/2014 8:12:18 AM
SomeGuy says:
I think the problem lies in the fact that majority of the new home construction are $400,000 homes you don't see any $200,000 homes being built. All of them are 2,500 Sq ft+

We're seeing 100 year old homes going for $180,000+ that just a few years ago would of only broken the $100,000.

7/10/2014 8:37:19 AM
progress now says:
The single biggest driver of new home construction is family formation. Get a real job, get married, have kids - buy a house. That model is gone forever.

Also, newbuilds are built on postage stamp lots and as stated above, taxes are unbelievable, then there is the HST. Resale is really attractive, especially stuff built in the 60's which were designed to last 100 years with no structural compromise. Careful of the wartime "lipstick on a pig" wartime houses - no matter how much your real estate agent flogs them. They don't live in one.

This article is no surprise.
7/10/2014 9:58:00 AM
S Duncan says:
When I build new I will build outside the city limits.

Why pay ridiculous taxes for terrible service and continue to support the idiotic welfare schemes happening here?

I can live outside the city and still use its services if I want at much lesser costs to my family.

This is how suburbanization occurred. Cities got stupid, people left and built outside. It pushes the reset button for a little while til the influx of stupidity follows those who left in the first place. Then they have to move again, and the parasites will of course follow.

1/4 section of peace and serenity without all those stupid money grubbing councillors getting involved, here I come!
7/10/2014 10:23:36 AM
Bob Roberts says:
Wow can't everyone in Tbay not afford a new house based upon the resale value and low interest rates. Taxes are way too high yes, but think of all the "services" and value your getting. $200-$300 sq ft to build that's a steal in Tbay. What about the new Event centre that's coming, Ring of Fire, house values will continue to go up. Time to Buy is now really.
7/10/2014 12:00:22 PM
Eastender says:
Most of us will be dead and gone before you see one dime from the Ring Of Fire.
So forget about that for now, it wont affect you.
7/12/2014 9:50:03 AM
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