Construction boom in the North--minerals fueling regional economy.

• Author: Ross, Ian
• Position: NEWSMAKERS of the YEAR

The United States housing market may be slumping, but the up-tick in mineral prices has the home selling and building sectors surging in many major Northern Ontario cities.

The mining boom in Sudbury and Timmins and the emergence of a new knowledge economy in Thunder Bay has made for tight resale market and a burgeoning home construction sector in many areas.

Warren Philp, Northern Ontario Market Analyst for Canada Mortgage and Housing Corp. says across northeastern Ontario, other cities of Timmins and Sault Ste. Marie are all experiencing stronger housing starts to the end of September.

Philp attributes new home construction to the tight listings in housing markets in places like Sudbury and Thunder Bay.

The hotbed of activity continues to be Sudbury with so much being tied to the price of nickel.

In the third quarter, Sudbury recorded its highest level of single-detached housing starts since 1992. Starts totalled 183 units in the quarter, up 6.4 per cent from 2006. Overall starts for this year should reach the 500-unit plateau and easily surpass it next year.

Average prices on homes keep climbing with year-end forecasted prices at $179,769. Philp predicts that to increase to $197,746 for 2008.

Encouraging census data in Sudbury shows a net gain in intraprovincial in-migration. After losing hundreds of people annually between 1996 and 2001, Sudbury has shown positive growth, including 836 in 205-2006. But it still lags behind, considering the aging population and declining birth rate.

In Thunder Bay, Philp says he's amazed at the "surprisingly strong" re-sale market activity in Thunder Bay this year considering the "marginal, at best" employment growth. Despite tough times many people are trying to maintain their roots in Thunder Bay.

Home listings are starting to dry up, particularly in the popular $120,000 to $220,000 price range, which is a trend across Northern Ontario major markets in the last five years.

In the first half of 2007 resales started strong, before cooling in the third quarter. Still, Thunder Bay was up five per cent.

At September's end, CMHC recorded a 30 per cent decline in active listings with 659 compared to 946 last year.

"We've got reasonable demand, which is butting up against limited supply," says Philp.

Like Sudbury, the mining camp in Timmins and through the Highway 11 communities are doing well.

Sales are up strongly seven per cent and prices up 11 per cent on average.

Home starts are the highest they've been...