Housing Starts Off to a Brisk Start in the First Quarter
During the first three months of 2008, New Brunswickers did not benefit from the mild winter weather conditions that had become familiar in recent years. Cold temperatures combined with near record accumulations of snow delayed construction of new homes and deterred enthusiasm in the resale market. Furthermore, the rising cost of living, high energy prices and the looming possibility of increasing economic challenges eroded some consumer confidence. After hovering at near record levels in most of the province last year, employment showed first quarter growth in Moncton and Saint John, with a small decline in Fredericton during the first three months of 2008. As a result, the weather, and the rise in economic uncertainty led to softer sales in the first quarter of 2008, while overall residential starts in the province remained strong. Optimism related to current and future economic development in Saint John helped fuel demand for housing, while the other major urbancentres - Moncton and Fredericton - posted mixed results in the first quarter of 2008.
Single and Multiple Starts Strong in the Saint John CMA
In Saint John, the local economy continues to benefit from the rising enthusiasm associated with several large scale energy sector projects. The two projects currently discussed - a new refinery and a second nuclear reactor - have yet to move past the planning stage. However, the current $1.4 billion refurbishment of the existing nuclear reactor at Point Lepreau has generated economic activity which has extended to the local housing market. In the first quarter of 2008, there were 72 single starts in Saint John, more than double the number recorded during the first three months of 2007. This was the result of increased activity in Quispamsis and Saint John City proper, where single starts rose by 21 and 19 units, respectively. Single starts in the remainder of the CMA were unchanged from last year's first quarter total. Multiple starts were also off to a brisk pace in 2008 with 93 units in the first quarter compared to 52 units during the same period last year. Apartment starts, which have been bolstered by projects supported through the Federal-Provincial Affordable Housing Agreement, equalled last year's first quarter total of 48 units. The first quarter growth resulted from increased row and semi-detached starts. In the first quarter of 2007, there were no row starts in Saint John. In contrast, 25 row units were started during the same period in 2008, while semi-detached starts increased to 20 units from last year's first quarter total of four starts. The rising cost of traditional single family homes, combined with increased demand for housing in the area helped bolster demand for alternative types of homes, particularly row and semi-detached units.
Singles Starts Decline in the Moncton CMA
In the first three months of 2008, housing starts in Greater Moncton were down 32.5 per cent to 77 units compared to 114 units during the same period last year. Due to reduced activity in Moncton City and Dieppe City, single starts in the CMA were down 12 units in the first quarter of 2008 for a total of 34 units. Conversely, single starts in the town of Riverview and remainder of the CMA increased in the first quarter of 2008. With fewer apartment starts, multiple starts in Greater Moncton were also down in the first three months of 2008. Last year, the 40 apartment starts recorded in the first quarter were located in Moncton City. This year, apartment starts in the first quarter were down by almost half, with all 21 starts in Dieppe City. Semi-detached units, which have continued to gain popularity as the starter home of choice, were down to 22 starts in the first quarter compared to 28 during the first quarter of 2007. Following a record setting total of semi-detached units in 2007, the decline in early 2008 is mostly the result of bad weather as opposed to diminishing demand for semidetached units. There were no row starts during the first quarter, as was the case during the same period in 2007.
Single Starts Strong in the Fredericton CA
Despite the inclement weather, residential construction activity in Fredericton was strong in the first three months of 2008, bolstered by a 21 unit increase in single starts to 55 units. The increase in single starts reflects the continued expansion of the single section manufactured home market in Greater Fredericton, with 21 new units added during the first quarter of 2008. In Fredericton City proper, single starts were unchanged during the first quarter with 17 starts. Increased activity in the remaining communities of the Fredericton CA, most notably Lincoln and Kingsclear, also contributed to the year-overyear increase in single starts during the first quarter. Multiple starts in the first quarter of 2008 were limited to four semi-detached units. In comparison, only two multiple starts were recorded in Fredericton during the first quarter of 2007. As a result of the historically high number of multiple starts in recent years, the local inventory of multiple units has increased faster than demand, leading to fewer multiple starts.
MLS® Sales Trend Down in First Quarter
MLS® sales in New Brunswick were soft in the first quarter of 2008 as poor weather conditions hampered activity throughout the province. Pending announcements regarding possible mega-projects in the Saint John area have created a sense of optimism in the region. Nevertheless, until these projects move past the planning stage, the impact on existing home sales in the region has, and will continue to remain muted. In Moncton and Fredericton, economic development has hinged on expansion of the retail semiand service sector. With the rising potential for mounting economic challenges, combined with the escalating cost of living, local consumers have become increasingly cautious in 2008.
Greater Moncton Leads the Province in Sales
The Greater Moncton area led the province in MLS® sales during the first three months of 2008 with 537 units sold. Nevertheless, sales were down 50 units, or 8.5 per cent compared to the first quarter of 2007. Within the region, MLS® sales in both Dieppe City and the town of Riverview were down 31.4 and 18.6 per cent, respectively. Conversely, first quarter sales were up three units in Moncton City to 270 units, and remained steady in the surrounding areas of Greater Moncton with 116 MLS® sales in the first quarter. Despite fewer sales, the average MLS® sale price in the Greater Moncton area was up 5.9 per cent to $147,379 during the first three months of 2008 compared to the same period last year. With a four per cent, year-over-year decline to $155,027, Dieppe City lost its distinction of having the highest average price in the Greater Moncton area. In the first quarter of 2008, the highest average price was $156,349 in the town of Riverview, following a 10.2 per cent increase compared to the same period last year. Moncton City was close behind, with a 9.2 per cent increase in the average price during the first quarter of 2008 to $150,135.
Greater Saint John Leads the Province in Average Price
For the second consecutive quarter, MLS® sales in Greater Saint John declined during the first quarter of the 2008, down 12.9 per cent to 358 units compared to 411 units during the same period last year. The first quarter highlights included a four unit increase in Saint John City proper to 175 units, offset by a 27.3 per cent decline in MLS® sales recorded in the Rothesay-Quispamsis area. The average sale price of homes sold in the Greater Saint John area during the first quarter of 2008 rose 1.9 per cent to $151,471. The Rothesay- Quispamsis posted the highest average price in the region during the first quarter of 2008 at $213,487, up 3.0 per cent from last year's first quarter price of $207,332. Meanwhile, a comparatively small number of unit sales allowed Grand Bay-Westfield to post the area's most significant price increase during the first three months of the year, to $143,535 compared to $101,414 during the same period last year.
Sales off to a Soft Start in Fredericton
Although MLS® sales were down in New Brunswick's three large urban centres during the first quarter of 2008, Fredericton experienced the most significant decline as MLS® sales dropped 23.9 per cent to 383 units compared to 503 units during the same period last year. Although sales were down, the average price in Fredericton maintained an upward trend during the first quarter of 2008 with a 6.7 per cent, year-over-year increase to $144,213.The average price in Fredericton City proper was significantly higher at $167,790, up 1.3 per cent from last year's first quarter result of $163,602. In the remaining communities of the Greater Fredericton area, the average sale price in the first quarter of 2008 stood at $114,140 which amounts to a substantial 19.5 per cent increase compared to the same period last year.