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Buyer's market expected to continue.

Buyer's market expected to continue

The current real estate buyer's market in Thunder Bay will continue into 1991, according to the autumn real estate forecast released by Canada Mortgage and Housing Corporation (CMHC).

Sales and price increases in the resale market have slowed as active listings have expanded rapidly.

Despite sales volumes moderating to 850 in 1990, resale price increases will average five per cent this year.

Next year CMHC expects that demand for units priced around the MLS average will remain relatively strong. However, price increases should cool to 3.5 per cent for the year, and sales will decline to 800 units.

Meanwhile CMHC predicts the average price of a newly constructed three-bedroom bungalow will increase three per cent in 1990 and again in 1991. Land availability is not expected to restrict new construction development during the forecast period.

The forecast of moderating interest rates, combined with slowing house price increases, will stabilize 1991 mortgage carrying costs.

CMHC notes that most forecasters expect interest rates will remain high throughout most of the third quarter of 1990 before declining during the remainder of the year. Interest rates will continue to decline modestly throughout 1991.

CMHC says slower but stable local economic growth will result in relatively constant employment in 1990 and 1991. While steady non-residential construction will offset persistent softness in the shipping and forestry sectors, a weakening service sector will increase the unemployment rate to between 7.8 and eight per cent in 1991.

Housing starts in the Thunder Bay census metropolitan area increased to 74 units in September, from 59 during the same month in 1989.

Starts of single-family homes were down only two units from last year. Forty-seven of September's starts were single-detached dwellings, 10 were semi-detached units and 17 were apartments.

"CMHC expects only a slight decrease in Thunder Bay singles starts in 1990 from 1989," stated CMHC Thunder Bay branch manager Bert Fenlon. "Of the six Ontario census metropolitan areas, only Thunder Bay has the same level of starts in 1990 as in 1989.

"Since homes in Thunder Bay remain affordable, our starts have not declined as much as in southern Ontario. Further, we expect a higher level of total 1990 starts than in 1989, due to an increase in multiple-unit activity."

September's 74 starts increased the total for the year to 495, up from 358 during the same period in 1989.

The bulk of the North Ward's new construction continues to be in River Terrace, with some activity in Wellington East and the outlying areas. The South Ward has seen construction in Neebing and on scattered in-fill lots.

Executive-style two-storey houses with an attached garage were priced between $175,000 and $300,000, while bungalows ranged between $130,000 and $160,000, depending on size and area.
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Title Annotation:Thunder Bay Report
Author:Bickford, Paul
Publication:Northern Ontario Business
Date:Nov 1, 1990
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