Understanding where the North Bay housing market is headed, depends greatly on where the local economy is pointed towards. Recent media headlines have highlighted lay-offs within the area, while showing some reluctance to focus on the positives. Those positives resonate outside North Bay's influence.
Analyzing any (economic) future is somewhat like playing Chess. One has to visualize multiple (financial) moves, and conclude a reasonable business outlook - cognizant of ever changing factors. For the North Bay (and area) economy, multiple factors come into play - the World and USA economy, Canada's own outlook, and more specifically, Ontario's economic outlook.
World & USA Economy
While a number of countries are mired in recession scenarios, the U.S. is pulling out of theirs with record employment, and improved consumer spending - the real driver to any economy. As the U.S. goes, so goes Canada. In 2013, 75.8% of Canadian exports flowed to the United States.
American consumer spending, and housing starts are expected to increase – creating a greater demand for Canadian products. Another significant factor is the Loonie and it’s relative value, currently hovering around 81 cents (U.S.). Essentially ... a Canadian product is now 20% cheaper, as opposed to 2011 when the Loonie was worth $1.04 U.S.
With oil prices down significantly, Economists are predicting a shift in prosperity for the Canadian economy.
The West – with oil being an important staple of their economy – is obviously being affected by an oversupply of oil, due in part to an increase in global production. Added to that, is a lower (relative) demand for oil, based on improved efficiencies and the escalation of alternative energies.
For the East (or Central Canada) – more specifically Ontario – the prospects give rise to optimism. Lower energy costs improve the status of manufacturing (and subsequent exports), and along with an 81 cent dollar, the factors exist to see a relative boom for the Ontario economy. Mining is one specific example of improved fortunes for the Ontario economy, and by in large, for North Bay’s economy.
Mining represents an influential part of North Bay’s economy. And during the past few years, exploration has suffered, impacting the local economy. On a per capita basis, North Bay features one of the highest collection of Engineers – due in large part to mining.
According to the EDC (Export Development of Canada) .... “Mining and metals, the (Ontario) province’s second largest sector, is forecast to grow by 3 and 6 per cent in 2014 and 2015 respectively.”
Despite the gloomy news that has permeated the current atmosphere, North Bay’s economic future has to be visualized from an outside perspective. That perspective is a U.S. economy experiencing a significant rebound, that will demand more natural resources. The domino effect will mean a stronger Ontario economy, and subsequent stronger North Bay economy. An improvement in Ontario’s fortunes will go a long way towards improving the fortunes of North Bay and surrounding area.
The upside will take time to make its’ impact, but the trend should demonstrate positive growth for the area. And with positive growth comes increased employment, and stabilized housing prices.
Ed Valenti & Peter Valenti
The Valenti Team
Century 21 Blue Sky Region Realty