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Home prices increasing across Northern Ontario.

Home prices increasing across Northern Ontario

Home prices continue to rise across Northern Ontario, while the number of home starts vary between the region's major centres.

Sudbury, North Bay and Timmins have all experienced substantial increases in housing starts so far this year, while Thunder Bay registered a minute increase and Sault Ste. Marie saw a sharp decrease in starts.

SUDBURY

In Sudbury, local officials point to the provincial government's relocation efforts and to expansions of local institutions and industries as the reasons for the increased housing activity.

"There's building activity in all areas of Sudbury," said Rick Kolari, president of the local real estate board. "The main thrust will be for single-family homes."

February single-family home starts in Sudbury more than doubled the number reported during the same month last year, according to the Canada Mortgage and Housing Corporation (CMHC).

Sudbury had a total of 111 single-home starts in February, compared to 50 in February 1989. The increase ran counter to the provincial downward trend.

Ontario experienced a 25-percent drop in single-home starts in February from February 1989.

For the first two months of the year, the Sudbury area had a total of 138 starts. Of that total, CMHC said most occurred outside the city, with 80 starts reported in Rayside-Balfour, Valley East, Nickel Centre, Onaping and Walden.

According to CMHC, the average price for a new home in the city was $164,000 at the end of February, while homes in the outlying areas carried a price tag of $130,000.

"We're still an under-valued market," said Kolari, "especially when you consider the home prices in southern Ontario. We're still affordable."

NORTH BAY

North Bay's south end is where a majority of home purchases are being made, according to the president of the local real estate board.

Maxine Foster said the majority of the activity in the early part of the year was found in the Ferris area.

CMHC's Kiven Choy, who analyzes housing information in the Sudbury, North Bay and Timmins markets, predicts there will be strong demand for housing in North Bay in the coming months.

Pointing to the new Ministry of Corrections office and its $4.5-million payroll, a $3-5-million expansion project at Jarvis Clark and planned work at the North Bay hospital, Choy said "It looks like North Bay will do well in the future.

"The diversified economy makes the city less dependent on the cyclical nature of natural resources."

During the first two months of the year, CMHC reported construction began on 70 new homes in North Bay. Of the total, 40 were single-family units and 12 were semi-detached units.

The number indicates a strong year ahead for the construction sector, in contrast to the decline felt in the latter half of 1989.

Despite the influx of both capital and jobs, CMHC reported that the average number of single-unit starts per month dropped from 40 in the first quarter of 1989 to 20 by year end.

However, the number of available units still increased. Choy said the absorption rate - a gauge of demand - averaged 14.42 units per month during the second half of 1989.

Meanwhile, rental units became a rare commodity in North Bay, as the number of unabsorbed units fell to less than one unit per month.

"The figure is due to consumers hedging away from the home market and young families opting for larger apartments," Choy said.

Choy added that the demand for condominiums was also strong in the city, as the number of absorbed units increased during the second half of the year to an average of 12.75 per month.

According to Royal LePage's most recent survey of Canadian home prices, luxury condominiums had the largest price increase between July 1988 and July 1989 of all housing types in North Bay.

The average price of a luxury condominium increased 8.7 per cent to $125,000. Meanwhile, detached bungalows increased 2.7 per cent to $115,000, executive detached bungalows increased 2.9 per cent to $175,000, two-storey homes increased 7.3 per cent to $118,000, senior executive homes remained at $270,000, townhomes increased 5.4 per cent to $78,000 and standard condominiums increased 5.6 per cent to $95,000.

PARRY SOUND

Rising prices in the Toronto-area market have forced many home buyers to look north of the city for affordable quarters and they are straining the supply in Parry Sound, according to one local real estate official.

"There is so little affordable housing available," said Carl Hickey, MLS (Multiple Listing Service) chairman for the Parry Sound Real Estate Board. "There are 27 homes available which list for less than $150,000. Of that number, only seven are priced less than $110,000 and that's where the greatest demand is."

Hickey said there is little immediate relief in sight.

"There are a few developments on the drawing board, but there's nothing imminent," he said.

The July 1989 Royal LePage survey listed the average price of a detached bungalow in Parry Sound at $115,000, up 9.8 per cent July 1988. Meanwhile, executive detached two-storey homes averaged $120,000, standard two-storey homes averaged $75,000 and senior executive homes averaged $180,000.

SAULT STE. MARIE

According to CMHC, construction starts in Sault Ste. Marie declined 263 per cent for the first two months of 1990 from the same period last year.

However, the sales of new and existing homes increased. CMHC reported a total of 173 residential sales by the end of February, an increase of 52 over the same period last year. The average price increased to $93,412 from $80,326.

The July 1989 Royal LePage survey listed the average price of a detached bungalow at $105,000, up 23.5 per cent in one year. Executive detached bungalows averaged $195,000, up 8.9 per cent.

Of the 341 homes included on the city's multiple listing real estate service in February, 79 topped the $150,000 level, 52 were between $100,000 and $119,000, 48 were between $120,000 and $149,000 and 45 were between $70,000 and $79,000.

THUNDER BAY

Thunder Bay had only three housing starts in February. The city reported six single- home starts for the first two months of the year.

Of the six starts, four were in the city's Neebing Ward and the remaining two were in the McIntyre Ward.

Bert Fenlon of CMHC's Thunder Bay office said officials expect slower economic growth to result in a slight decrease in the city's starts for 1990.

Prices for homes in Thunder Bay are stable. Two-storey executive homes are priced between $150,000 and $200,000, while bungalows cost between $120,000 and $150,000.

TIMMINS

"We expect Timmins to see a very strong market in 1990, despite the fluctuations in gold prices," said Choy.

Choy attributes the strong market to a large influx of capital from the reopening of the underground mine tour, as well as from the relocation of the Ministry of Transportation's municipal roads division and from construction of a $10-million mall.

According to the analyst, the city will be hard pressed to match or better last year's total of 346 building starts.

"It was the highest number of starts in a decade," he said.

Of the 346, 258 were single units, 16 were semi-detached, 20 were row rental units and 52 were apartments. According to CMHC figures, the new units did not remain vacant for long.

"It shows that the builders are well attuned to the local economy," said Choy.

PHOTO : DETACHED BUNGALOW

PHOTO : EXECUTIVE DETACHED TWO-STOREY

PHOTO : STANDARD TWO-STOREY

PHOTO : STANDARD TOWNHOUSE

PHOTO : SENIOR EXECUTIVE [Graph 1 and 2 Omitted]

CHRIS KREJLGAARD Staff Writer
COPYRIGHT 1990 Laurentian Business Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1990, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Title Annotation:Construction Report
Author:Krejlgaard, Chris
Publication:Northern Ontario Business
Date:May 1, 1990
Words:1285
Previous Article:Builder counteracts costs of government legislation by employing subcontractors.
Next Article:The Sault recorded more than $211m in construction.
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