2013 Fredericton Housing Outlook Seminar Canada Mortgage and Housing Corporation

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1 2013 Fredericton Housing Outlook Seminar Canada Mortgage and Housing Corporation CLAUDE GAUTREAU, Senior Market Analyst, CMHC Housing market intelligence you can count on

2 2012 Highlights Fredericton CA Housing Market Drivers Multi-Residential/Rental Market New Home Market Single Family Homes Resale Market 2013 Outlook CANADA MORTGAGE AND HOUSING CORPORATION - 2

NB s large urban centres Ample supply of new listings MLS sales declining Source: CMHC/The Real Estate Board of the

3 2012 Housing Market Highlights Fredericton CA Rental Market Resale Market Fourth consecutive year of strong apartment starts The number of units under construction remains near historically high levels Rising vacancy rates Strongest price growth among NB s large urban centres Ample supply of new listings MLS sales declining Source: CMHC/The Real Estate Board of the Fredericton Area Inc./CREA MLS is a registered trademark of the Canadian Real Estate Association CANADA MORTGAGE AND HOUSING CORPORATION - 3

4 2012 Highlights Fredericton CA Housing Market Drivers Multi-Residential/Rental Market New Home Market Single Family Homes Resale Market 2013 Outlook CANADA MORTGAGE AND HOUSING CORPORATION - 4

5 Net Migration by County ,000 8,723 8,000 6,000 4,791 4,000 2, ,000-4,000-2,745-6,000 Only 2 counties recorded significant positive net-migration Largest inflows of people were to the Moncton and Fredericton areas Source: Statistics Canada Tax Filer Data CANADA MORTGAGE AND HOUSING CORPORATION - 5

International Migration by County 2006-2011 3,500 3,000 2,500 2,000 1,500 1,725 2,303 2,839 York County recorded the largest inflow of international migration 1,000 500 0-500

6 International Migration by County ,500 3,000 2,500 2,000 1,500 1,725 2,303 2,839 York County recorded the largest inflow of international migration 1, The inflow of international migrants is centered around the areas with universities Source: Statistics Canada Tax Filer Data CANADA MORTGAGE AND HOUSING CORPORATION - 6

Provincial Migration to Alberta Alberta continues to attract people from New Brunswick 500 0-500 Most of the people leaving are under 45 years of age -1,000-1,500 Migration

7 Provincial Migration to Alberta Alberta continues to attract people from New Brunswick Most of the people leaving are under 45 years of age -1,000-1,500 Migration slowed during the 2008/2009 recession -2,000-2,500-3, E Source: Statistics Canada Tax Filer Data CANADA MORTGAGE AND HOUSING CORPORATION - 7

8 Provincial Migration to Alberta by County Annual Average (per 1,000 people) 0 Every county in New Brunswick recorded a net outflow of people -1-2 The northern counties experienced a larger outflow than the provincial average -3-4 Source: Statistics Canada Tax Filer Data CANADA MORTGAGE AND HOUSING CORPORATION - 8

9 Net Migration Greater Fredericton (York County) 1,500 Net Gain Since ,873 1, Average Annual Gain Since Source: Statistics Canada Tax Filer Data CANADA MORTGAGE AND HOUSING CORPORATION - 9

Net-Migration by Age Group (2006-2011) Greater Fredericton (York County) 6,000 Approximately

5,000 4,000 3,000 2,000 1,119 1,470 1,530 4,791 1,000 520 152 0 0-17 Yrs 18-24 Yrs 25-44 Yrs

10 Net-Migration by Age Group ( ) Greater Fredericton (York County) 6,000 Approximately 86% of people relocating to the Greater Fredericton area are under the age of 45! 5,000 4,000 3,000 2,000 1,119 1,470 1,530 4,791 1, Yrs Yrs Yrs Yrs 65 Yrs + Total Source: Statistics Canada Tax Filer Data CANADA MORTGAGE AND HOUSING CORPORATION - 10

11 Employed/Labour Force (000 s) Unemployment Rate (%) Total Employment, Labour Force (000 s) and Unemployment Rate (%) Fredericton CA 70 11% 60 10% 50 9% 40 8% 30 7% 20 6% 10 5% 0 4% Employment Labour Force Unemployment Rate Source: Statistics Canada Labour Force Survey CANADA MORTGAGE AND HOUSING CORPORATION - 11

12 Annual Employment Growth 10% Fredericton CA 8% 7.8% 6% 5.0% 4.6% 5.2% 4% 3.5% 2% 1.7% 0% -2% -0.2% 0.3% -0.9% -1.3% -4% -6% -4.1% -2.9% Average Annual Increase ( ) 1.6% Employed ,550 Source: Statistics Canada Labour Force Survey CANADA MORTGAGE AND HOUSING CORPORATION - 12

13 Recent Employment Trends By Industry By Demographic Decreasing Increasing Group % Change Last 5 Years Transportation Construction Full-Time - 2.7% Manufacturing Trade Part-Time + 3.5% Public Administration Finance/Insurance & Real Estate % % % Source: Statistics Canada Labour Force Survey CANADA MORTGAGE AND HOUSING CORPORATION - 13

Annual Percentage Change Real Weekly Earnings Province of New Brunswick From 2001 to 2012 annual real increase in weekly earnings was +0.8% 10% 8% 6% 4.

14 Annual Percentage Change Real Weekly Earnings Province of New Brunswick From 2001 to 2012 annual real increase in weekly earnings was +0.8% 10% 8% 6% 4.5% During the same period, the average existing home price rose by 2.9% annually (adjusted for inflation compared to 4.8% unadjusted) 4% 2% 0% -2% -4% -6% -0.4% -1.9% -0.8% 0.7% 0.6% 1.7% 2.7% 3.0% 0.1% -1.6% 1.2% Source: Statistics Canada Labour Force Survey CANADA MORTGAGE AND HOUSING CORPORATION - 14

15 2012 Highlights Fredericton CA Housing Market Drivers Multi-Residential/Rental Market New Home Market Single Family Homes Resale Market 2013 Outlook CANADA MORTGAGE AND HOUSING CORPORATION - 15

Multiple Starts Fredericton CA 500 400 300 330 327 309 390 323 352 324 391 267 200 176 204 223 129 100 0 2000 2001 2002 2003 2004

16 Multiple Starts Fredericton CA Year Average in Annual Starts : 311 Source: CMHC CANADA MORTGAGE AND HOUSING CORPORATION - 16

17 Multiple Starts as a Percentage of Total Starts Fredericton CA 100% 80% 60% 40% 33.1% 42.1% 20% 0% Residential construction has not shifted toward multi-residential units Single-detached still account for over half of all housing starts Source: CMHC CANADA MORTGAGE AND HOUSING CORPORATION - 17

18 Apartment Starts Fredericton CA Year Average in Annual Starts : 215 Source: CMHC CANADA MORTGAGE AND HOUSING CORPORATION - 18

19 Rental Starts Fredericton CA Year Average in Annual Starts : 217 Source: CMHC CANADA MORTGAGE AND HOUSING CORPORATION - 19

20 Rental Starts Fredericton CA Average Starts Two periods with above-average activity Strong activity for four consecutive years Construction tends to decline when vacancy rate increases Source: CMHC CANADA MORTGAGE AND HOUSING CORPORATION - 20

21 Rental Market Fredericton CA A large number of apartment units under construction is usually followed by an increase in the vacancy rate Apartment Units Under Construction % Vacancy Rate Notable increase in the vacancy rate in the fall of % 4% 2% 4.0% Source: CMHC 0% CANADA MORTGAGE AND HOUSING CORPORATION - 21

22 Vacancy Rate Fredericton CA 7% 6.5% 6% 5% 4% 3.7% 4.0% 4.8% 4.3% 4.0% 3% 2% 1.6% 2.3% 2.6% 2.5% 1.3% 1.5% 0.9% 1% 0% Current Ten-Year Average: 3.6% Could move higher in 2013 due to the number of apartment units under construction Source: CMHC CANADA MORTGAGE AND HOUSING CORPORATION - 22

Vacancy Rate by Submarket Fredericton CA 14% 12% 2011 2012 11.1% 10% 8% 8.5% 6% 4% 2% 2.5% 4.0% 1.7% 3.6% 2.3% 3.1% 2.

23 Vacancy Rate by Submarket Fredericton CA 14% 12% % 10% 8% 8.5% 6% 4% 2% 2.5% 4.0% 1.7% 3.6% 2.3% 3.1% 2.0% 2.5% 0% Fredericton CA Southwest Northwest Northeast Southeast Source: CMHC CANADA MORTGAGE AND HOUSING CORPORATION - 23

Private Apartment Average Rent ($) by Unit Type Fredericton CA $1,200 $1,000 2011 2012 $1,035 $800 $600 $571 $651 $771 $770 $400 $200 $0 Bachelor One Bed Two Bed Three Bed Total Estimate of Average

24 Private Apartment Average Rent ($) by Unit Type Fredericton CA $1,200 $1, $1,035 $800 $600 $571 $651 $771 $770 $400 $200 $0 Bachelor One Bed Two Bed Three Bed Total Estimate of Average Rent Change 1 Oct 2011 to Oct 2012 One Bedroom Units Two Bedroom Units Three Bedroom Units 2.9% 3.3% 1.0% Source: CMHC 1 The Percentage Change of Average Rent is a measure of the market movement, and is based on those structures that were common to the survey sample for both years. CANADA MORTGAGE AND HOUSING CORPORATION - 24

Private Apartment Average Rent ($) by Submarket Fredericton CA $1,000 2011 2012 The average rent was higher in most zones in 2012 $900 $800 $770 $802 $746 $745 The Southwest zone

25 Private Apartment Average Rent ($) by Submarket Fredericton CA $1, The average rent was higher in most zones in 2012 $900 $800 $770 $802 $746 $745 The Southwest zone (downtown core) posted the highest average rent in 2012 $700 $600 $500 $655 $400 Fredericton CA Southwest Northwest Northeast Southeast Source: CMHC CANADA MORTGAGE AND HOUSING CORPORATION - 25

26 2013 Outlook Rental Market Fredericton CA F % Change 2014F Vacancy Rate 4.0% 4.3% 0.3 pts 4.8% Average Rent (Two Bedroom) $771 $ % $795 Historically high number of apartment units under construction during the latter part of 2012 Further increase in the vacancy rate expected in 2013 Expected rent increase in 2013 will range between 1.5% and 2.5% Source and Forecast: CMHC CANADA MORTGAGE AND HOUSING CORPORATION - 26

Condominium Starts as a Percentage of Multiple Starts Fredericton CA 70% 60% Condominium starts as a percentage of multiple starts have been trending down since peaking in 2006 50% 40% 30%

27 Condominium Starts as a Percentage of Multiple Starts Fredericton CA 70% 60% Condominium starts as a percentage of multiple starts have been trending down since peaking in % 40% 30% 20% 21% 29.2% 46% 30% 22% 30% 17% 10% 0% 10% 0% 0% 0% 0% 0.0% % Source: CMHC CANADA MORTGAGE AND HOUSING CORPORATION - 27

28 Condominium Starts by Type Fredericton CA Apartment Row Source: CMHC CANADA MORTGAGE AND HOUSING CORPORATION - 28

Row Starts Historical Perspective Fredericton CA 120 100 80

0 0 0 0 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

29 Row Starts Historical Perspective Fredericton CA Source: CMHC CANADA MORTGAGE AND HOUSING CORPORATION - 29

30 Percentage of Row Starts for Homeownership Fredericton CA 100% 79% 88% 100% 100% 75% 50% 63% 56% 51% 25% 28% 20% 0% 0% 0% 0% 4% Source: CMHC CANADA MORTGAGE AND HOUSING CORPORATION - 30

31 Semi-Detached Starts Fredericton CA vs. Moncton CMA Fredericton Moncton Source: CMHC CANADA MORTGAGE AND HOUSING CORPORATION - 31

32 2013 Outlook Multiple Starts Fredericton CA F % Change 2014F Multiple Starts % 220 Continued increase in the rental inventory will put upward pressure on the local vacancy rate leading to reduced apartment starts Demand for row units to remain stable Source and Forecast: CMHC CANADA MORTGAGE AND HOUSING CORPORATION - 32

33 2012 Highlights Fredericton CA Housing Market Drivers Multi-Residential/Rental Market New Home Market Single Family Homes Resale Market 2013 Outlook CANADA MORTGAGE AND HOUSING CORPORATION - 33

Single-Detached Starts Fredericton CA 700 600 500 400 356 415 419 495 494 402 387 432 475 403 370 339 367 300 200 100 0 2000 2001 2002 2003 2004

34 Single-Detached Starts Fredericton CA Single-detached starts trending down since 2008 Source: CMHC CANADA MORTGAGE AND HOUSING CORPORATION - 34

35 Absorbed Inventory Unabsorbed Inventory Single-Detached Units Absorbed and Unabsorbed Fredericton CA 60 Absorbed Single-Detached Unabsorbed Single-Detached Single Starts (12 MMA) Unabsorbed (12 MMA) Unabsorbed inventory exceeded absorbed inventory in late 2012 Source: CMHC CANADA MORTGAGE AND HOUSING CORPORATION - 35

Single-Detached Starts by Submarket Fredericton CA 140 120 124 2011 2012 100 80 84 97 98 60 40 20 32 30 42 35 39

36 Single-Detached Starts by Submarket Fredericton CA F'ton City Kingsclear Lincoln Saint Mary's Douglas Source: CMHC CANADA MORTGAGE AND HOUSING CORPORATION - 36

Percentage of Absorbed Single-Detached Homes > $300,000 Fredericton CA 30% 25% 20% 15% 10% 5% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

37 Percentage of Absorbed Single-Detached Homes > $300,000 Fredericton CA 30% 25% 20% 15% 10% 5% 0% : Moderate increase in the share of absorbed single-detached homes priced above $300,000. Source: CMHC CANADA MORTGAGE AND HOUSING CORPORATION - 37

Percentage of Absorbed Single-Detached Homes by Price Range Fredericton CA - 2006 50% 40% 30% 20% 10% 0% Single-Detached Homes

38 Percentage of Absorbed Single-Detached Homes by Price Range Fredericton CA % 40% 30% 20% 10% 0% Single-Detached Homes by Price Range % < $200,000 $200,000 - $300,000 40% 11% $300,000 Source: CMHC CANADA MORTGAGE AND HOUSING CORPORATION - 38

Percentage of Absorbed Single-Detached Homes by Price Range Fredericton CA - 2012 50% 40% 30% 20% 10% 0% Single-Detached Homes by Price

39 Percentage of Absorbed Single-Detached Homes by Price Range Fredericton CA % 40% 30% 20% 10% 0% Single-Detached Homes by Price Range < $200,000 49% 27% $200,000 - $300,000 40% 47% $300,000 11% 26% Source: CMHC CANADA MORTGAGE AND HOUSING CORPORATION - 39

40 Average New Home Price Fredericton CA $350,000 $300,000 $250,000 $258,804 $200,000 $150,000 $119,056 $100,000 $50,000 $ Average Annual Increase +5.8% Average Two Storey Price $ 333,388 Source: CMHC CANADA MORTGAGE AND HOUSING CORPORATION - 40

41 Average New Home Price Moncton CMA/Saint John CMA/Fredericton CA $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 Moncton Saint John Fredericton Change in Average New Home Price Moncton % Fredericton % Saint John % Greater Moncton posted the highest average price in 2012 Source: CMHC CANADA MORTGAGE AND HOUSING CORPORATION - 41

42 2013 Outlook Single Starts Fredericton CA F % Change 2014F Single Starts % 320 The average price of a new home was stable in 2012 The average price in 2013 will be comparable Reduced demand will lead to fewer starts in 2013 Source and Forecast: CMHC CANADA MORTGAGE AND HOUSING CORPORATION - 42

43 2012 Highlights Fredericton CA Housing Market Drivers Multi-Residential/Rental Market New Home Market Single Family Homes Resale Market 2013 Outlook CANADA MORTGAGE AND HOUSING CORPORATION - 43

New Listings Historical Perspective Greater Fredericton Average New Listings 1980-1989 1990-1999 2000-2012 1,414 2,473 3,918 6,000 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0

44 New Listings Historical Perspective Greater Fredericton Average New Listings ,414 2,473 3,918 6,000 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, , Source: CREA MLS is a registered trademark of the Canadian Real Estate Association CANADA MORTGAGE AND HOUSING CORPORATION - 44

Average Days on Market Greater Fredericton 120 100 80 85 69 86 60 40 20 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: The Real

45 Average Days on Market Greater Fredericton Source: The Real Estate Board of the Fredericton Area Inc./CREA MLS is a registered trademark of the Canadian Real Estate Association CANADA MORTGAGE AND HOUSING CORPORATION - 45

46 Sales to New Listings Ratio Greater Fredericton 100% 80% 60% 40% 20% 0% Jan-81 Jan-85 Jan-89 Jan-93 Jan-97 Jan-01 Jan-05 Jan-09 Jan-13 Source: CREA MLS is a registered trademark of the Canadian Real Estate Association A sales to new-listings ratio between 40% and 60% generally indicates a BALANCED market. CANADA MORTGAGE AND HOUSING CORPORATION - 46

MLS Unit Sales Greater Fredericton 3,000 2,500 2,000 2,448 1,907 1,500 1,000 500 334 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002

47 MLS Unit Sales Greater Fredericton 3,000 2,500 2,000 2,448 1,907 1,500 1, Source: CREA MLS is a registered trademark of the Canadian Real Estate Association CANADA MORTGAGE AND HOUSING CORPORATION - 47

48 MLS Sales by Submarket Greater Fredericton 2,500 2,000 Year-over-Year Change Fredericton City Oromocto Woodstock - 5.5% - 5.4% % ,500 1, Fredericton City Oromocto Woodstock Remainder Total Source: The Real Estate Board of the Fredericton Area Inc. MLS is a registered trademark of the Canadian Real Estate Association CANADA MORTGAGE AND HOUSING CORPORATION - 48

49 Average MLS Sale Price Greater Fredericton $200,000 $175,000 $150,000 $125,000 $100,000 $75,000 $50,000 $25,000 $ Average MLS Sale Price $170,563 Source: CREA MLS is a registered trademark of the Canadian Real Estate Association 2012 Average MLS Sale Price $180,485 CANADA MORTGAGE AND HOUSING CORPORATION - 49

Annual Price Growth (%) Greater Fredericton 12% 10% 9.6% 9.5% Average % Change 2000-2012 8% 6% 5.0% 5.3% 5.8% 7.9% 4.6% 5.8% + 5.0% 4% 2% 3.4% 2.2% 3.7% 3.3% 0% -2% -0.

50 Annual Price Growth (%) Greater Fredericton 12% 10% 9.6% 9.5% Average % Change % 6% 5.0% 5.3% 5.8% 7.9% 4.6% 5.8% + 5.0% 4% 2% 3.4% 2.2% 3.7% 3.3% 0% -2% -0.5% Source: CREA MLS is a registered trademark of the Canadian Real Estate Association CANADA MORTGAGE AND HOUSING CORPORATION - 50

51 Average MLS Price by Submarket (000 s) Greater Fredericton Year-over-Year Change in Average MLS Sale Price Greater Fredericton % Fredericton City % Oromocto % Woodstock +14 % $240 $200 $160 $120 $80 $40 $ Greater F'ton F'ton City Oromocto Woodstock Source: The Real Estate Board of the Fredericton Area Inc. MLS is a registered trademark of the Canadian Real Estate Association CANADA MORTGAGE AND HOUSING CORPORATION - 51

52 MLS Sales by Price Range Greater Fredericton 2, ,000 1,500 1, Source: The Real Estate Board of the Fredericton Area Inc. MLS is a registered trademark of the Canadian Real Estate Association CANADA MORTGAGE AND HOUSING CORPORATION - 52

53 Share of MLS Sales by Price Range Greater Fredericton Single Only Single/Condo/Mini/Semi $400 plus $300K-$400K $250K-$300K $200K-$250K $150K-$200K $0-$150K 0% 10% 20% 30% 40% Greater Fredericton Area Single-Detached Only Fredericton City 60% MLS Sales < $200,000 45% MLS Sales < $200,000 Source: The Real Estate Board of the Fredericton Area Inc. MLS is a registered trademark of the Canadian Real Estate Association CANADA MORTGAGE AND HOUSING CORPORATION - 53

-10% -3.8% 13.4% -3.4% -20% -14.4% -16.5% -17.

54 Percentage Change in MLS Sales by Price Range Greater Fredericton 40% 34.5% 30% Largest increase in MLS sales occurred in the $300,000 - $400,000 price range 20% 10% 0% -10% -3.8% 13.4% -3.4% -20% -14.4% -16.5% -17.6% -30% Source: The Real Estate Board of the Fredericton Area Inc. MLS is a registered trademark of the Canadian Real Estate Association CANADA MORTGAGE AND HOUSING CORPORATION - 54

55 Resale Market Classification Greater Fredericton Current Conditions Resale Market MLS Sales Decreasing Balanced towards Buyer s New Listings Stable Balanced Sales to New Listings Ratio Decreasing Balanced towards Buyer s Price Growth Stable Balanced Days on Market Increasing Balanced towards Buyer s Greater Fredericton BALANCED Source: CMHC/The Real Estate Board of the Fredericton Area Inc./CREA MLS is a registered trademark of the Canadian Real Estate Association CANADA MORTGAGE AND HOUSING CORPORATION - 55

56 2012 Highlights Fredericton CA Housing Market Drivers Multi-Residential/Rental Market New Home Market Single Family Homes Resale Market 2013 Outlook CANADA MORTGAGE AND HOUSING CORPORATION - 56

57 2013 Outlook 3,500 3,000 2,500 2,000 1,500 1,000 Annual Transactions New and Existing Home Greater Fredericton (Semi-detached + Row + Single-detached + MLS Sales) ,288 2,379 Source : CMHC/CREA MLS is a registered trademark of the Canadian Real Estate Association CANADA MORTGAGE AND HOUSING CORPORATION - 57

58 2013 Outlook Resale Market Fredericton CA F % Change 2014F MLS Sales 1,907 1,850-3% 1,800 Average Price $180,485 $182,000 +1% $181,500 Balanced market conditions to remain in 2013 Decline in existing homes sales expected in both 2013 and 2014 Moderate price increase expected in 2013 Source: The Real Estate Board of the Fredericton Area Inc./CREA MLS is a registered trademark of the Canadian Real Estate Association Forecast: CMHC CANADA MORTGAGE AND HOUSING CORPORATION - 58

59 2013 Outlook Housing Starts Fredericton CA F % Change 2014F Total Starts % 540 Single Starts % 320 Multiple Starts % 220 Large number of apartment units under construction at the end of 2012 will lead to fewer multiple starts in 2013 Last year s decline in single-detached construction to extend into 2013 with another decline in single starts Source and Forecast: CMHC CANADA MORTGAGE AND HOUSING CORPORATION - 59

60 Thank You Questions? or Call Claude Gautreau at (506) CANADA MORTGAGE AND HOUSING CORPORATION - 60

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