By kelly louiseize
Greater Sudbury is only scratching the surface on potential development says two land investors, and the momentum just keeps on growing.
With strong mining, health and education sectors, higher income families are bringing a more diverse culture to Greater Sudbury says Sal-Dan Developments Ltd. president Sam Biasucci.
Biasucci has been in the home market construction business since the 1980s and has purchased land throughout the city.
"Greater Sudbury has a very attractive market,” he says.
"There is no question that it has become the capital of the North."
The bullish mining sector, the Northern Ontario School of Medicine along with the Northeastern Ontario Regional Cancer Centre has attracted more of a knowledge-based population, which has created a slowing, if not reversal, of youth outmigration in Greater Sudbury, Biasucci says.
"Jobs are more available and the signs of a strong economy are visible," he says.
More than 60 per cent of his lots on the east side of Sudbury have been spoken for, while properties to the west side of the city are more than half sold. Three young families have recently moved into the water tower subdivision located in the centre of the city.
His efforts will be focused on the downtown core and its expansion. Specifically, he intends to build subdivisions all the way to the big box stores located closer to New Sudbury.
Although it is difficult terrain, he says the worst part of the construction is over now that he has broken ground with the water tower subdivision. Another 600 to 700 lots could be developed on top of the 153 that already exist on 65 acres. To do this, more land acquisitions will be required.
Based on the feedback from contractors, president of the Sudbury and District Home Builders Association, Karen Trudel, expects another banner year.
"They are absolutely swamped this year and top builders expect another great year next year."
Greater Sudbury has been experiencing this boom for approximately four years. Move-up buyers want newer homes which leaves the starter homes for first time buyers, says Alex Dumas, president of Royal LePage franchise in Greater Sudbury.
"I think this boom has a lot to do with the stable economy," he says. "The market still has legs and is still going strong and the interest rates have stabilized, so I anticipate more of the same."
Driven by the strong economy, bidding wars for real estate in much sought after neighbourhoods are more common than ever.
"Three or four people are bidding at the same time on a house that is over and above the asking price," he says.
New Sudbury, South End and in the hospital area appear to be hot zones, and if the house is in good condition and is well priced, a frenzy of offers can be expected.
"In those cases you put a price on it and you really don’t know what is going to happen." Dumas says.
Canada Mortgage and Housing analyst Warren Philp says Greater Sudbury’s last eight months resulted in an 18 per cent increase in housing turnover with 282 single detached housing developments compared to the pre-boom of 239 last year. Data to the end of August indicates Greater Sudbury sales are two per cent ahead of last year’s figures and the market is breaking records at least in the resale division.
In the first eight months of this year the average price of a house was $147,000 compared to $134,000 last year, Philp says. This means the housing prices have heated up by almost 10 per cent. A total of 1,854 houses were sold so far compared to 1, 819 last year at this time. Philp forecasts a slight gain of two per cent to continue into 2007, but there will be a leveling off as demand plateaus.
Based on this year’s numbers the "price growth (for houses) cannot be sustained three years in a row," Philp says, although sales could continue to break records.
Dumas disagrees with the prediction.
"Those guys are not in the trenches," and therefore don’t know the activity in the commercial and residential markets, he says.
However, as housing starts and resales climb multi units continue to sag.
"The market for rental is very tight," Dumas says.
Many homeowners are hanging onto their houses because there are no rentals available since there has not been new multi-unit construction in up to 15 years.
Contractors and land investors say development will continue to remain strong right into 2007, regardless of mining mergers.
Dumas says, "Greater Sudbury may buck a trend and keep on going. I see us doing better than a lot of other cities in southern Ontario, so I see much of the same for the future."
