Housing leads the charge: Thunder Bay construction scene rebounds from recession.

• Author: Ross, Ian
• Position: NEWS

Tough economic times remain in northwestern Ontario, but construction activity in Thunder Bay was healthy in 2010.

A tight resale market for homes sparked a surge in home building, said Canada Mortgage and Housing Corporation (CMHC).

After a busy six consecutive months, new construction tailed off in November with only 10 single-detached homes breaking ground.

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Still, the city has done well with 191 singles built through 11 months of 2010, up nearly 21 per cent from last year's mark of 158. The volume of starts of semi-detached and multi-residential units was slightly ahead of the 2009 pace by four units.

Coming out of a recession, CMHC's Northern Ontario Market Analyst Warren Philp said Thunder Bay has exhibited a "strong, balanced market" in new home construction and resale activity.

Some choice subdivisions, near the airport and in the corridor between Lakehead University and the new hospital, have sold well.

During 2009, Thunder Bay was not spared from the nationwide impact of the recession on the home resale side. The market is down 14 per cent from the previous year. But things got off to a rocket start in early 2010 with the first quarter up 30 per cent over the previous year.

"The first four months were crazy busy in Thunder Bay like in most parts of the country in the resale market," said Philp, before cooling off during the middle months. Heading into the fall, overall sales for 2010 were up only four per cent.

The early home-buying frenzy was spurred by the threat of increased interest rates, the introduction of the Harmonized Sales Tax and an early spring.

CMHC's third quarter stats actually showed sales were down 12 per cent compared to 2009 but strangely enough, prices were up 10 per cent.

Philp said much of that has to do with a simple "supply and demand" issue in affordably priced homes.

There remains a chronic shortage of local listings of homes in $150,000 to $280,000 range in Thunder Bay.

Philp attributes much of that crunch to aging homeowners who are staying put, and displaced forestry workers who kept their homes but began commuting to distant jobs. What's become prevalent is home bidding wars that had resulted in about 20 per cent of Thunder Bay homes selling over list price.

But the fact that Thunder Bay did well during the hangover from the economic recession bodes well for the future.

Philp said there are signs that the city's diversification efforts are starting to bear fruit. Statistics...