Statistics from the Canadian Mortgage and Housing Corporation released Oct. 9 showed that, overall, the market has slowed a little bit compared to 2011. While single residential housing starts were up slightly in September, the number of multi-residential projects – row houses, apartment buildings, condominiums, etc. – is down significantly.
“There’s just a little bit less shine on the penny than we thought there was going to be,” said Laura Higgs, of the Sudbury Homebuilders Association. “But I don’t think it’s any reason to lose sleep.”
Last month, work started on 45 new family homes in Greater Sudbury, compared to 38 in the same period in 2011. But work on multi-residential projects dropped to 2, compared with 37 last year – a decline of 37 per cent.
The sluggish numbers are a bit surprising because projections for economic growth in Sudbury are bullish, with some major developments expected to add thousands of new jobs over the next 10 years. Projects such as the new school of architecture, Vale’s Clean Aer project and Cliff’s chromite smelter in Capreol are expected to bring billions in new investment and employment over the long-term.
Despite all the good news, Higgs said Sudburians are just as worried about the economy as the rest of Canadians.
“I don’t think that our housing market is immune to the national wait-and-see that’s going on right now,” Higgs said. “I think there’s a bit of hesitancy in the market ... People are waiting to see what’s going to happen with the economy.”
Nickel prices, while still hovering around $8, are still lower than they have been, she said. And the major projects have yet to pick up steam.
“I don’t think our local economy has seen the growth that we expected,” she said. “We haven’t seen the boom yet. I think nickel prices aren’t going the way they should be going ... So some of the investment has been slowed down.
“And it’s not just in residential construction, either. Things for the renovators are a little slower, I hear.”
Warren Philp, CHMC market analyst for Northern Ontario, who’s based in Thunder Bay, said the September figures shouldn’t set off alarm bells in Sudbury.
“For the last 10 years, the average number of single (residential) starts has been 37 (in September), so 45 looks good in comparison,” he said. “So overall, we’re going to be off, but only slightly.”
While it’s not yet reflected in the statistics, Philp said builders in Sudbury have a lot of apartment rental and condominiums in the planning stages.
“As far as multi-family housing units, we do know there are a number of projects in the works,” he said. “It’s just a matter of when they get going – before Dec. 31, or if they get pushed back into 2013.”
There is pent-up demand for that type of housing, Philp said, since vacancy rates are low in Greater Sudbury, while housing prices are soaring.
“Which would suggest there’s quite good demand for apartments,” he said. “With condos, over the last 20 years, there really hasn’t been that much in the way of condos being built in Greater Sudbury. There seems to be a recognition of that.”
Philp said in Thunder Bay, it’s already a sellers market, something that Greater Sudbury will likely see very soon.
“In Sudbury, what we have is a strong balanced market that’s on the verge of becoming a sellers’ market,” he said. “I have no doubt that in certain neighbourhoods, and in certain price ranges, we’re already into sellers’ market conditions, where there are multiple offers taking place.”