Northern Economist 2.0

Showing posts with label housing prices. Show all posts
Showing posts with label housing prices. Show all posts

Wednesday, 13 September 2017

Thunder Bay Housing Coming Down

A report by Moody's Analytics reported in today's Globe and Mail says that higher interest rates, newer mortgage-lending rules and declining affordability are together going to put a damper on the growth of Canadian housing prices.  Indeed, the price of single family homes in Canada is forecast to only grow at 1.3 percent annually over the next five years but there will be considerable variation across the country.  Larger urban centers with growing populations particularly in southern Ontario will do better while many other cities will see declines.

As the accompanying graph constructed from data provided in the Globe article shows (July forecast), Toronto and Hamilton are still expected to lead the pack at growth rates of 7.7 and 5.8 percent respectively but after that the growth rates drop off and indeed move into negative territory. 

Thunder Bay is expected to see annualized declines of 5.4 percent.  Reasons for this are falling median incomes, slow population growth rates and slow rates of household formation - along of course with the fact that interest rates are on the way up. Other housing price reports on the Moody site also show that Greater Sudbury is forecast to have price declines.  The May 2017 report for example (the April forecast) noted Sudbury prices over the next five years would decline by 1.2 percent annually.  The same report also had Thunder Bay declining by 1.2 percent annually with a substantial revision now in the new report. What has changed over the last few months? Interest rates.


I think interest rates are really the big factor here given that Thunder Bay's housing prices managed to double over the last 10-15 years despite the weak economy and flat population growth.  Not quite the growth of the GTA but still quite remarkable given the local demographics and economic performance. 

Sunday, 8 January 2017

Housing Prices in Sudbury and Thunder Bay: The Boom is Over



A key feature of housing markets in Canada over the last decade is the sustained price increases particularly in larger urban centers such as Vancouver and Toronto.  Despite a relatively flat economy and stagnant population growth, even northern Ontario has seen a price surge in its two largest urban housing markets: Greater Sudbury and Thunder Bay.  However, while Ontario’s housing price surge especially in the GTA shows little sign of abating, it appears that economic reality may have finally caught up with northern Ontario’s largest housing markets as prices appear set to level off.