Employment and tax issues affecting Nanaimo’s housing market will keep a lid on growth over the coming year.
The numbers, published recently by the Canada Mortgage and Housing Corporation predict no big swings in housing construction, sales, pricing and availability in 2012.
By the end of 2011, construction on 500 multiple-family units – condominiums and apartments – will have started. Projects, on hold due to a slow economy, finally got underway in 2011, triggering a 33 per cent jump over 2010’s total of 376 units. 2011 is also first year in more than two decades that developers invested in building new rental units in Nanaimo.
Nanaimo’s current rental vacancy rate is 3.6 per cent. The average monthly rent for a one-bedroom unit is $670. Two-bedroom units are averaging $810 per month.
Construction starts on just 475 multi-family units are predicted for 2012.
Three hundred single family home starts are anticipated for 2012, up 20 per cent over the 250 for 2011, showing a renewed emphasis on single family home construction in Nanaimo.
Starts for all types of new housing in Nanaimo are predicted to top out at 750 units for 2011 and increase by 3.3 per cent to 775 units for all of 2012.
By the end of 2011, home sales will increase to just .1 per cent to 1,600 units, compared to 2010’s figure of 1,598 homes sold.
The average price for a home is down .2 per cent from $330,774 in 2010 to $330,000 for 2011.
CMHC’s predicts 1,700 homes sold in Nanaimo in 2012 at an average price of $333,000.
Byron Gallant, Canadian Home Builders Association of Central Vancouver Island president, said the biggest single factor currently affecting the home construction industry is uncertainty over the harmonized sales tax.
“Who says we’re going back to the old system?” Gallant said. “That’s what we don’t know and it’s the uncertainty that’s stopping people from moving and we’re hearing that from everybody. I was at the recent Vancouver Island Economic Alliance Summit and it’s the same issue that every sector is facing.”
Jobs with the oil and gas industry are drawing people to work in northern B.C. and Alberta, which Gallant said could mean a shortage of skilled labour locally should housing construction take off in 2012.
Future new homes will be smaller as young couples buying or building their first home have become more concerned than ever with energy efficiency and maintenance costs of owning a house.
“You’ve got be able to afford the Hydro bill,” Gallant said. “There’s going to be a lot more emphasis put on the issue of energy consumption in the coming years. I believe it’s just a matter of time before the banks are going to say, hey, what’s it going to cost to run this and you have to look at that in you’re debt service.”