City housing market still has legs after years of rapid development
By KATE WRIGHT
wright.kate@dailygleaner.com
Published Friday August 10th, 2007
Appeared on page A1
OTTAWA - Fredericton's housing market is still going strong, after nearly a decade of unprecedented growth.
New housing starts were up last month from the same time last year, jumping to 58 units from 48 units in July 2006.
The city's multiple-unit starts have cooled dramatically, down from 70 units last July to only two units last month.
But Alex Forbes, assistant director with the city's development services department, said the slowdown in apartment and condo units being built is a reflection of years of strong growth -- not a floundering market.
"We knew we could not continue to bring on an unprecedented number of units," he said. "We're now in a natural state of vacancy that everyone can live with."
He said single-family dwellings increased this year, up to 130 units being built compared to 117 during the same period last year.
Apartment units have also cooled year to date, with only 78 units being built this year down from 169 units over the same period last year.
Canadian Mortgage and Housing spokesman Claude Gautreau said this cooling is part of a natural cycle after a period of rapid growth.
"If we go back three or four years there was fairly heavy construction and because so much was built, it's sprinted ahead of demand," he said.
"It's nothing uncommon; it's likely just a situation where the amount of product was probably a little more than the actual demand was."
The construction of townhouses in the capital city is growing. Forbes said he's seen an influx in townhouse growth, although building figures from last year are not available.
"It's a market that's not slowing down," he said.
Gautreau said the resale market in Fredericton is steady, with many residents searching for cost-saving options when it comes to buying a home.
The cost of a new home in Fredericton averages $211,157, while the cost of an existing home averages $146,794 -- a significant difference for first-time buyers or homeowners looking to downgrade.
"The cost of owning a home is pushing people to enter into more innovative areas of the market," said Forbes.