January 15, 2009 — Moishe Alexander’s review on how the current world economy and Canadian economic turndown is affecting the Sudbury Ontario housing market
The Big Nickel in Sudbury, Ontario - Credit "Smith", Flickr
Sudbury Ontario has had a serious increase in housing starts and is rising above the historical low levels of housing starts of years gone by. CMHC is forecasting 525 single-detached starts, 30 semi-detached units, 40 apartment condominium ownership units, and 120 apartment rental units, for a total of 715 housing starts for 2008. This will increase by 600 units in 2009.
DENSER FORMS OF CONSTRUCTION EXPECTED
CMHC expects the with a vacancy rate under 1% and no publicly assisted rental housing starts in the year 2008 or 2009, the type of new construction for new homes will be the low density form of housing, which will be the dominant type of new housing starts in the Greater Sudbury area.
SUDBURY RESALE MARKET EASES
Sales in Sudbury, from MLS, have been moving steadily in 2008. There are several contributing factors, the significant one is the peek that resale’s have seen in 2007 and 2008. Not to mention, that employment has now leveled off first time buyers are starting to evaporate from the Sudbury area. CMHC expects 2530 sales of resale homes in he year ending 2008, which would be 8.6% less than the same period last year.
Clearly the problem is supply and demand, which historically affects the growth and the volume of resale home sales.
SUDBURY MOVING TO BALANCED MARKET
Although there has been economic growth at moderate levels, over the same period last year, a stunning prediction was made by Canada Mortgage and Housing Corporation in that even though employment will be strong and there will be substantial population growth in Sudbury and surrounding areas in 2009. This will still only sustain moderate growth and the balancing of the market.
Canada Mortgage and Housing Corporation predicts that there will be continued growth in 2009 in major commercial projects with over $20 billion worth of projects that are commencing in 2009 for Sudbury and the surrounding areas, concentrated in the mining areas.
MORTGAGE RATES
Canada Mortgage and Housing Corporation predict that interest rates will decline by a further 25-50 basis points from their current levels in 2009. However, due to the cost of borrowing to the Canadian banks from the markets, the mortgage interest rate will marginally increase in the latter half of 2009, but not significantly enough to negatively affect the housing market in Sudbury and surrounding areas.
You can find the entire report in PDF format through the following link:
http://www.cmhc-schl.gc.ca/odpub/esub/64363/64363_2008_B02.pdf