Already on the upswing, Sudbury's housing market will continue to improve through 2011, according to a recent report by the Canada Mortgage and Housing Corporation (CMHC).
Sudbury has seen significant success in diversifying its economy. While mining remains an important industry, Sudbury also derives economic strength as a centre of commerce, government, tourism and science and technology research. Although Vale remains the city's largest single employer, it accounts for less than five per cent of the city's workforce.
"Low interest rates, improved job market and some pent-up demand will support Sudbury Real Estate demand into 2011," said Navtaj Chandhoke, founder, Professional Real Estate Investors Group (PREIG) Canada."Approximately $3.4 billion in expenditures are slated for Ontario to upgrade mining and processing facilities at the company's century-old operations in Sudbury."
Total employment is expected to edge higher in 2011 as the global economic recovery strengthens, which bodes well for commodities such as nickel – Sudbury’s major export product. In fact, the latest commodity market data shows that nickel traded at about $12 US per pound – a price that is three times higher than its two-year low. The rise in commodity prices and potential increases in business investment will partially offset expected job losses in the mining sector. Consumer spending on big ticket items has showed signs of recovery and consumer bankruptcies appear to have peaked.
In its latest Housing Market Outlook, the CMHC predicts that through to the end of 2010, the Sudbury area will see 2,300 resales, a number that will rise to hit an estimated 2,450 in 2011.
Highlights of this report include:
* Existing home sales will grow and reach 1,990 and 2,100 units this year and next year respectively as prospects for strong labor market recovery offset the slight decline in homeownership affordability.
* Expect average MLS® price growth of 5.5 per cent this year. In 2011, the rate of change in prices will slow as new listings outpace sales.
* Housing starts will decline 18 per cent in 2010 before increasing next year as the local economic recovery gains traction.
* Sudbury's total employment will increase by 1.3 per cent in 2011, as gains in service sector employment are expected to offset weaknesses in the goods-producing sector.
The report also predicts that single-detached starts will also rise slightly from 340 this year to 350 in 2011. There were 224 such starts in 2009.
Next year will also see a slowdown in the rise of average prices as new listings take the edge off price gains. The average price for a Sudbury home rose from $200,947 in 2009 to $222,000 in 2010; this is expected to reach $226,000 next year.
After weakness in 2009 and the first half of 2010, recovery in the goods-producing sector leading to gains in the service sector will trigger and improvement in total employment in Sudbury, increasing home buyers' optimism in 2011 and onwards.
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Navtaj Chandhoke is a Canadian-based real estate investor, speaker, author, educator and the founder of World Wealth Builders, leading RE investors education,mentoring, support and network of over 4545+ Canadian investors.