The Barrie CMA rental market experienced softer conditions in 2009. The average vacancy rate for purpose- built rental apartments rose up by 0.3 percentage points this year to 3.8 percent. Several factors contributed to easing demand, including a rebound in homeownership demand and high youth unemployment. Continued moderate migration into Barrie supported demand.

Supply, also, was virtually unchanged, increasing by only 15 units. There were no new purpose-built apartments, but the number of units in the existing universe increased for a variety of reasons.

With a softer rental market the growth in average monthly rent for a two-bedroom unit slowed significantly from last year and came in at 1.2 per cent, well the below the maximum rent increase stipulated by the province.

The economic adjustment has affected employment prospects in Barrie for all age cohorts, but in particular the youngest age cohort of 15-24. This group makes up a significant proportion of Barrie’s labour force, given the region’s overall young population and is also a key source of rental demand. The proportion of the labour force in Barrie made up by the 15-24 year-old age group this year has averaged close to 20 per cent. Both full-time employment and part-time employment for this age group have been trending down. With a slowly recovering economy, young people who had been renting returned to the parental home or doubled up with other youth, while those currently living with parents are staying at home until the economy recovers further.

The rate of migration into Barrie has slowed. Nevertheless migration into Barrie from within Ontario is higher than it is in most other Ontario centres. Moveover, slightly fewer people are moving away from Barrie to other parts of the country. Immigration and births added to the slower, but still significant, population growth rate. A growing and relatively young population continues to support rental demand.

With mortgage carrying costs down due to record-low mortgage rates, first-time buyers have exited rental into homeownership thereby increasing the overall vacancy rate.

The decline in mortgage rates in 2009 put mortgage carrying costs back to where they were in 2006. These payments hit a low in the second quarter, which coincided with an improvement in the employment prospects for the 25-44 year old age group. This is the same age group from which many first-time buyers are drawn, so the surge in existing home sales beginning in the second quarter likely included many purchases by people who were renting at the time.

Renters who move into homeownership usually have relatively high incomes compared to other renters and often occupy the larger, more expensive rental accommodation before their move. Given the significance of the secondary rental market in Barrie, in particular, the number of rented single-detached homes, a number of first-time buyers would be coming from the secondary rental market. As a result, the movement to home ownership in Barrie resulted in a relatively small increase in the primary rental market vacancy rate since some the impact was absorbed in the secondary rental market.

Vacancy rate keeps rising According to the results of the latest CMHC Rental Market Survey conducted in October 2009, the rental apartment vacancy rate1 increased again in the Sherbrooke CMA. After climbing by 0.4 of a percentage point in 2008 to 2.8 per cent, the vacancy rate continued to rise in 2009, reaching 3.9 per cent. As shown in Figure 1, the rental market has now been easing more significantly for the past three years in the Sherbrooke area. However, the proportion of unoccupied units still remained far from the levels observed in the late 1990s, when more than 7 per cent of rental apartments were vacant.

In the other CMAs across the province, the Québec area still had the tightest rental market, with fewer than 1 per cent of apartments vacant. As for the Saguenay, Montréal and Gatineau areas, their proportions of unoccupied units remained relatively stable between October 2008 and October 2009, edging down from 1.6 per cent to 1.5 per cent in Saguenay and rising slightly from 2.4 per cent to 2.5 per cent in Montréal and from 1.9 per cent to 2.2 per cent in Gatineau. In the Trois-Rivières CMA, however, the vacancy rate was up, reaching 2.7 per cent (+1 percentage point). Among all of Quebec’s urban centres with 100,000 or inhabitants, Sherbrooke had the highest percentage of vacant rental housing units in 2009, for a second straight year.

Supply increases while demand slowsThe vacancy rate hike in the Sherbrooke CMA in 2009 resulted from a moderating demand and a rising supply.

On the demand side, migrants who come to an area, whether from other areas of Quebec or elsewhere, are definitely one of the main factors. In fact, most newcomers to an area choose to rent when they arrive. The relationship between migration and the vacancy rate is illustrated in Figure 3, with high net migration often being associated with a tighter rental market and the opposite also being observed.

Preliminary data2 show that no substantial immigration gains should be registered in the Sherbrooke CMA since the last survey. Stagnant immigration is no doubt one of the factors that contributed to moderating rental housing demand in the Sherbrooke area this year.

As well, the Sherbrooke CMA has recorded negative net interregional migration3 of about 100 people among the group aged from 15 to 34 years4, for the past two years. In other words, more young people left the capital of the Eastern Townships than settled there. This decrease therefore moderated demand for rental housing units, as the young population is an important client group on the rental market. In fact, according to data from the latest census (2006), most Sherbrooke area households whose primary maintainer is aged from 15 to 34 years are renters.

In addition to migration, several other factors contributed to slowing rental housing demand in the Sherbrooke CMA in 2009. One such factor was that the labour market was less favourable for young people (labour force aged from 15 to 24 years) between the October 2008 and October 2009 surveys. Compared to last year, the average employment level fell by 14 per cent among young people aged from 15 to 24 years, with this decrease mainly affecting full-time jobs (-24 per cent). In these conditions, many young people may have been deterred from leaving the family home, or encouraged to share accommodations, which also slowed demand on the rental market.
Changes in the age structure of a population (in this case, the aging of the population) may also have an effect on the proportion of unoccupied rental housing units in an area. According to our latest demographic projections, the growth in the number of young households (aged from 15 to 34 years) in the Sherbrooke area will be relatively weak, if not stagnant, between 2008 and 2009, which will limit the potential renter client pool. Negative growth is even forecast for the next few years, which will further curb demand on this market.

Another major reason for the vacancy rate increase is that financing conditions have been favourable to home buying, which means that a number of renter households possibly became homeowners. In fact, the strong sales of existing and new homes registered in the CMA in recent years seem to support this point. The same scenario was likely repeated in 2009, which again drove up the percentage of vacant units in the Sherbrooke area.

With such demand conditions and a rental housing supply that increased by 2.5 per cent between our last two surveys (from 30,842 units in 2008 to 31,621 in 2009), it was therefore not surprising to see a hike in the vacancy rate in 2009 in the Sherbrooke CMA.

Lastly, it should be mentioned that, even with the low vacancy rates observed in recent years, the growth in the supply on the rental market has been rather limited. It should not be forgotten that, in the late 1980s, rental housing construction had been very strong in the CMA, such that the vacancy rates had hovered around 10 per cent in the years that followed. Some builders may have then decided to focus their activities on other market segments. Now, even with the low vacancy rates registered in recent years, rental housing construction has never returned to its previous pace. This is generally the case, as a lag is often observed between changes in the vacancy rate on a market and the ensuing adjustment in the level of rental housing starts.

Funding of $420,000 for six new affordable housing rental units for seniors living on low income was announced today in Glencoe.

Bev Shipley, Member of Parliament for Lambton – Kent – Middlesex, on behalf of the Honourable Diane Finley, Minister of Human Resources and Skills Development Canada and Minister Responsible for Canada Mortgage and Housing Corporation (CMHC), and Maria Van Bommel, Parliamentary Assistant to the Minister of Children and Youth Services and Member of Provincial Parliament for Lambton – Kent – Middlesex, on behalf of the Honourable Jim Watson, Ontario’s Minister of Municipal Affairs and Housing; along with Doug Reycraft, Mayor of the Municipality of Southwest Middlesex made the announcement.

“The Government of Canada is helping Canadians during these tough economic times and giving hope to seniors who need quality, affordable housing that meets their needs,” said MP Shipley. “This investment is possible through Canada’s Economic Action Plan, the federal government’s plan to stimulate the economy and create jobs during the global recession. For Ontario, this includes a $1.2 billion joint investment.”

“New housing initiatives add significant support to the McGuinty government’s Poverty Reduction Strategy,” said MPP Van Bommel. “We will continue to work with our municipal partners to ensure more units are built during the life of this program.”

“The six new affordable housing units in this eight-unit building are a welcome addition to our rental stock in Southwest Middlesex,” said Mayor Reycraft. “I have heard from several seniors who are eagerly awaiting the completion of the apartment building. The investment by the federal and provincial governments, and by Sundip and Melissa Bajaj, in these affordable units is great news.”

The Government of Canada wants to ensure that Canadians on fixed incomes can live with independence and dignity and remain in their communities, close to family and friends. Canada’s Economic Action Plan provides $400 million, over two years, to build new rental housing for low-income seniors. Overall, the Economic Action Plan includes $2 billion for new and existing social housing, plus up to $2 billion in loans to municipalities for housing-related infrastructure.

Canada’s Economic Action Plan builds on the Government of Canada’s commitment in 2008 of more than $1.9 billion, over the next five years, to improve and build new affordable housing and help the homeless.

Today’s announcement celebrates funding for six new affordable rental units at 173 Main Street in Glencoe. The project is sponsored by Sundip and Melissa Bajaj.

Funding of $742,000 for 14 new affordable housing rental units for seniors living on a low income was announcement today in Tavistock.

Dave MacKenzie, Member of Parliament for Oxford, on behalf of the Honourable Diane Finley, Minister of Human Resources and Skills Development and Minister Responsible for Canada Mortgage and Housing Corporation (CMHC), and Khalil Ramal, Member of Provincial Parliament for London – Fanshawe on behalf of the Honourable Jim Watson, Ontario’s Minister of Municipal Affairs and Housing; along with Paul Holbrough, Warden of Oxford County and Don McKay, Mayor of East Zorra – Tavistock, made the announcement.

“The Government of Canada is helping Canadians during these tough economic times and giving hope to seniors who need quality, affordable housing that meets their needs,” said MP MacKenzie. “This investment is possible through Canada’s Economic Action Plan, the federal government’s plan to stimulate the economy and create jobs during the global recession. For Ontario, this includes a $1.2 billion joint investment.”

“New housing initiatives add significant support to the McGuinty government’s Poverty Reduction Strategy,” said MPP Ramal. “We will continue to work with our federal and municipal partners to ensure new affordable housing units are built during the life of this program.”

“Oxford County is very proud of the new affordable housing project in Tavistock,” said Warden Holbrough. “This project is an example of private enterprise partnering with public money to fulfill the needs of Tavistock. The identified need to provide affordable housing for seniors will allow seniors to live in an environment close to services they need.”

“The conversion of this Historic building, to Affordable Housing for seniors, is a most welcomed addition to the Tavistock Community,” said Mayor McKay.

The Government of Canada wants to ensure that Canadians on fixed incomes can live with independence and dignity and remain in their communities, close to family and friends. Canada’s Economic Action Plan provides $400 million, over two years, to build new rental housing for low-income seniors. Overall, the Economic Action Plan includes $2 billion for new and existing social housing, plus up to $2 billion in loans to municipalities for housing-related infrastructure.

Canada’s Economic Action Plan builds on the Government of Canada’s commitment in 2008 of more than $1.9 billion, over the next five years, to improve and build new affordable housing and help the homeless.

Today’s announcement celebrates the funding for 14 new affordable rental units for seniors at 40 Woodstock Street.

The seasonally adjusted annual rate of housing starts reached 158,500 units in November. This is an increase from 157,400 units started in October, according to Canada Mortgage and Housing Corporation (CMHC).

“The improvement in housing starts continued in November,” said Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre. “Despite a small decline in November’s multiple home construction, overall starts numbers were up due to a solid increase in singles starts.” The November total is the highest of the year.

The seasonally adjusted annual rate of urban starts increased by 0.7 per cent to 141,100 units in November. Urban multiple starts decreased slightly from 72,500 units in October to 71,300 units in November. Single urban starts increased by 3.4 per cent to 69,800 units in November.

November’s seasonally adjusted annual rate of urban starts increased by 10 per cent in Quebec, by 8.2 per cent in the Prairies and by 6.2 per cent in British Columbia. The rate of urban starts decreased by 8.3 per cent in Ontario and by 9.8 per cent in Atlantic Canada.

Rural starts were estimated at a seasonally adjusted annual rate of 17,400 units in November.

As Canada’s national housing agency, CMHC draws on more than 60 years of experience to help Canadians access a variety of quality, environmentally sustainable and affordable homes. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making vital decisions.

The slackness in the resale market has directly impacted the new home market as has the slowing economy. Single-detached starts will fall to 160 units in 2009 and 170 in 2010, as the market comes more into line with long term demographic requirements. CMHC expects 30 row, condominium and apartment starts in 2009 and another 55 in 2010. Relatively tight rental market conditions and reasonable take up of condominium units will result in some of this activity over the next 18 months.

As Figure 2 indicates, there has been improvement in household incomes in Thunder Bay and with required income being more or less flat, affordability has improved. Next year, with home prices and incomes rising modestly, homeownership should remain an affordable option and therefore demand should strengthen slightly.

After rising 4.3 per cent and 5.5 per cent respectively in 2007 and 2008, the New Home Price Index for Sudbury-Thunder Bay will rise in 2009 and 2010 but only modestly given the slowdown in demand.

Vacancy rates have come down steadily since 1998 in Thunder Bay while two bedroom rents are the lowest amongst other centres in Ontario. Lack of new supply and healthy demand due to strong enrolment numbers at Lakehead University and Confederation College contribute to the demand picture, not-to-mention in-migration from Northwestern Ontario from retirees and education and/or job seekers. CMHC expects the vacancy rate to fall again in 2009 to 1.6 per cent before increasing to 2.0 in 2010 as resale market activity picks up bringing households out of rental housing into homeownership. Rents should escalate in 2009 and 2010 given continued strong demand for rental accommodation.

Developers have plans for condominium in 2010 and beyond. A steady supply condominium units coming onto the market over the last twenty years has given Thunder Bay a nice mix of housing. This type and tenure of housing gives the city some allure, especially as empty nesters from the region look to retire to this city. Pricing will be very important as this product is primarily targeted at empty nesters who do not typically want to pay more for a condo than what they obtain from the sale of the family home or other homeownership unit.

After hitting a record high in 2008, Thunder Bay sales have fallen 18 per cent in 2009. July was the only month to register a year-over-year increase in sales. Sales will fall twenty per cent in 2009 and CMHC estimates a relatively small six per cent increase next year to 1,400 sales. Expect a gradually improving economy as low mortgage rates will positively impact the market next year.

The shortage of active listings in the Thunder Bay existing home market will exert pressure on prices. Although sales are still reasonably solid given last year’s all-time record in the Thunder Bay market, the sales to active listings ratio is unquestionably in a strong balanced to seller’s market position. The supply- demand relationship will cause price appreciation to continue barring some unforeseen economic shock. Watch for average prices to rise four per cent in 2009 and another four per cent in 2010.

Following a 56 per cent decline in 2008, total housing starts across the Edmonton Census Metropolitan Area (CMA) are on pace to decrease by another 24 per cent this year to 5,000 units. This will represent the lowest level of activity for the region’s home builders since 1997. While single- detached construction has staged a modest recovery since the summer, a continued downturn in the multi- family sector will hold down this year’s numbers. In 2010, a sustained improvement in single starts combined with a moderate rebound in multiples will boost total starts by 29 per cent to 6,450 units. While representing a sizable gain over this year’s volumes, total starts next year remain a fraction of the 10,600+ units started on average during the 10 year period 1999-to-2008.

Single-detached starts increased by 14 per cent during the first nine months of 2009 but the improvements have come on gradually as the year has progressed. Activity levels were down by 39 per cent year-over-year at the end of the first quarter but have generally exceeded last year’s production since then. Price reductions, various incentives, and low mortgage rates have helped to bolster demand in 2009. This trend should continue for the balance of 2009, with annual production nearing the 3,200 unit mark. This will represent an increase of 22.5 per cent over 2008 but will still be well below activity levels reported over the past decade. Look for these gains to continue in 2010, with single starts of around 4,200 units. The tepid outlook for employment growth will temper the rate of increase going into 2010. Inventory levels, including show homes, peaked in August 2008 and have been trending downward throughout much of the past year. As shown in Figure 2, the show home component of inventory has started to move upward as builders ramp-up marketing efforts. The inventory of complete and unabsorbed spec homes, meanwhile, has trended to its lowest levels since September 2006.

Statistics Canada’s New House Price Index (NHPI) is forecasted by CMHC to decrease by 10.5 per cent this year before staging a two per cent improvement in 2010. These price changes have begun to show up in CMHC’s market absorption surveys but the overall average absorbed price has held up surprising well in 2009. To the end of August, the average absorbed price increased this year nine per cent to $545,327. While units priced under $400,000 and over $600,000 have gained market share this year, mid-range product selling between $400-600,000 lost ground compared with last year.

CMHC forecasts an average absorbed single-detached price this year of close to $535,000, for a 4.5 per cent gain over 2008. The expected median value will be much lower as the impact of high-priced homes is less using this measure. In 2010, the absorbed average price will soften due to the lagged effect of when homes are priced (often before construction begins) and when they are captured in our survey (which is at completion). The pressure for higher negotiated selling prices will come from builders who had trimmed their margins over the past year in order to clear their unsold inventory. With better economic times ahead, land and labour costs as well as material prices such as lumber and concrete are expected to increase.

Canada Mortgage and Housing Corporation (CMHC) today announced the six winners of CMHC’s Housing Studies Achievement Award. Six prizes of $10,000 — three at a master’s level and three at a doctoral level — were presented by Mr. Douglas Stewart, CMHC’s Vice President, Policy and Planning, at an awards event held today in Ottawa.

“CMHC is proud to honour Canadians whose work is at the forefront of helping us foster a better future for quality, affordable housing in this country. I want to congratulate this year’s winners of the CMHC Housing Studies Achievement Award for their important contributions,” said Mr. Stewart.

The CMHC Housing Studies Achievement Award program, held every second year, was originally created to commemorate CMHC’s 60^th anniversary in 2006 and the first winners were announced in November 2007. The academic work of the 2009 award recipients contributes to housing research and policy development in Canada, whether in social, economic, design or technical aspects of housing. In addition to paying tribute to the work of the award winners, CMHC is also acknowledging the work of four “honourable mentions” singled out for recognition by the expert panel of jurors reviewing submissions. Attached is a backgrounder profiling the work of the 2009 CMHC Housing Studies Achievement Award winners and Honourable Mentions.

As Canada’s national housing agency, CMHC draws on more than 60 years of experience to help Canadians access a variety of quality, environmentally sustainable, and affordable homes — homes that will continue to create vibrant and healthy communities across the country. For more information, call 1-800-668-2642.

The Honourable Diane Finley, Minister of Human Resources and Skills Development Canada and Minister Responsible for Canada Mortgage and Housing Corporation (CMHC), along with Jim Kenyon, Minister Responsible for the Yukon Housing Corporation, today launched the construction phase of two new housing projects for seniors in Faro and Teslin.

The $4.7 million federal contribution to these projects comes through Canada’s Economic Action Plan, the government’s plan to stimulate the economy and create jobs during the global recession. Recognizing the distinctive needs of the North, Canada’s Economic Action Plan provides $200 million, over two years, including $50 million for Yukon, to support the renovation and the construction of new social housing units. Overall, the Economic Action Plan includes $2 billion for new and existing social housing, plus up to $2 billion in loans to municipalities for housing-related infrastructure.

“The Government of Canada is committed to providing Canadians a hand up to those who need it the most,” said Minister Finley. “Through this investment we are helping make an important difference in the lives of individuals and families in Faro and Teslin who are trying to build a better future for themselves.”

“With funding from Canada, Yukon government is launching several important housing projects in the territory,” said Minister Kenyon. “Access to affordable and accommodating housing gives seniors the option of staying in their community as they grow older. Faro and Teslin will benefit from retaining this important generation within their population.”

Canada’s Economic Action Plan (CEAP) will provide $2 million to construct a seniors’ residence in Faro, which has one of the highest ratio of seniors and near-seniors among Yukon’s municipalities. The residence will contain six 1-bedroom suites.

CEAP funding of $2.7 million was approved for seniors’ residence in Teslin. The residence will contain seven 1-bedroom suites and one 2-bedroom suite. Two of the seven units are for seniors with a disability.

Construction in both communities is underway and will continue throughout the winter, generating employment for trades. Completion is anticipated for the fall of 2010.

Both buildings are wood frame construction and feature SuperGreen energy efficiency standards and Accommodating Home standards for a barrier-free living environment.

Canada’s Economic Action Plan builds on the Government of Canada’s commitment in 2008 of more than $1.9 billion, over the next five years, to improve and build new affordable housing and help the homeless.

Net migration is forecast to be negative in 2009 in the Windsor CMA. More people have moved away from the area each year since 2004 than have relocated to Windsor. This is expected to continue in 2010 with a net loss of nearly 1,400 people. The first impact can be seen in the rental market as renters are more mobile than owners.

In the rental market the average apartment vacancy rate in Windsor was 14.8 per cent in October 2008 and is expected to remain high in 2009. Contributing to the high vacancy rate are several factors such as higher unemployment among youth, out-migration in search of employment, and competition from homeownership. The average two bedroom apartment rent is forecast to remain flat in October 2009, as landlords refrain from raising rents in an effort to retain existing tenants.

The Windsor-Essex area is marketing the region abroad to boomers and retirees as an exceptional place to live. Visitors and residents extol the many recreational opportunities, affordable housing and temperate climate of the area in the hopes of attracting new residents.

Employment is a key factor supporting housing demand. Windsor’s employment levels have not dropped as sharply as anticipated. The area may be able to get through 2009 with less than a five per cent decline in jobs. However, combined with losses over the past couple of years the workforce has shrunk by almost eight per cent since 2006. Continuing economic weakness in the U.S. and the appreciating value of Canadian dollar are ongoing challenges for the manufacturing and tourism sectors. In turn this has had a detrimental affect on local consumer spending.

The economy has been slow to diversify, however some inroads are appearing. Interest in alternative green energy such as wind and solar are providing new manufacturin opportunities.Non-residential construction employment will grow in 2010 due to investment in major capital projects in the area.