HomeMy WebLinkAboutPSD-056-08
Cl~#}glon
REPORT
PLANNING SERVICES
Date:
GENERAL PURPOSE AND ADMINISTRATION COMMITTEE d
no \ \, ::oM 11 fA _3~/-oD
Monday, June 2, 2008 Ke5C:JL '-If\ 0(1 "~
Meeting:
Report #: PSD-056-08
File #: PLN 9,4
By-law #:
Subject:
2007 GROWTH TRENDS REVIEW
RECOMMENDATIONS:
It is respectfully recommended that the General Purpose and Administration Committee
recommend to Council the following:
1, THAT Report PSD-056-08 be received for information,
Submitted by:
D vi , Crome, M,C,LP., RP,P,
Director of Planning Services
Reviewed by: (j~ ~
Franklin Wu,
Chief Administrative Officer
MM/FUDJC/df
May 20, 2008
CORPORATION OF THE MUNICIPALITY OF CLARINGTON
40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L 1C 3A6 T (905)623-3379 F (905)623-0830
REPORT NO.: PSD-056-08
PAGE 2
1.0 PURPOSE
1.1 This report summarizes the key findings of the 2007 Growth Trends Review.
2.0 BACKGROUND
2.1 The Planning Services Department conducts on-going monitoring activities to assess
the effectiveness of the Municipality of Clarington Official Plan, as well as other
municipal and Durham Region policies. These monitoring activities also assist in
identifying emerging issues and trends within the Municipality of Clarington. Building
permit activity and other such related data are often used as an indicator of housing and
employment activity within Clarington, the level of local investment, and economic
performance; this and other information has been compiled into the 2007 Growth
Trends Review.
2.2 The data collected and analyzed in this report is based on building permit information
and housing market information gathered from a variety of sources. These sources
include:
. Municipality of Clarington's own-source data;
. Durham Region;
. Statistics Canada;
. Canada Mortgage and Housing Corporation;
. Royal Bank of Canada Economics Research; and
. The Bank of Canada
3.0 KEY FINDINGS OF THE 2007 GROWTH TRENDS REVIEW
3.1 The 2007 Growth Trends Review (Attachment 1) examines Clarington's growth activity
and compares its performance against other area municipalities within Durham Region.
In addition, the Review examines past, current and forecasted housing market activity
and provides a short-term outlook on future development activity for Clarington and
Durham Region.
3.2 Growth Activitv in Clarinaton
The total value of all building permits issued in Clarington decreased by 14.28% from
$235.25 million in 2006 to $201.65 million in 2007. The total value of building permits
issued in 2007 was similar to the 2005 value, however, the number of residential
permits declined by 23.9% which was common across the GTA.
The decrease in total building permit value for Clarington can be attributed to the large
reduction in non-residential building permit values and the decrease in the number of
residential permits. The residential building permit value increased 7.5% from $150.36
million in 2006 to $161.67 million in 2007, whereas, the non-residential building permit
value decreased significantly by about 53% from $84.88 million in 2006 to $39.98
million in 2007.
REPORT NO.: PSD-056-08
PAGE 3
3.3 Growth Activitv in Durham Reoion
Durham Region experienced a decrease of 8% in total building permit value from $1.55
billion in 2006 to $1.43 billion in 2007. Total building permit value has edged lower two
years running in Durham. Since 2000, the total value of building permits issued in
Durham Region has averaged about $1.33 billion. 2007 was an above average year
despite lower building permit activity than in the past few years.
For different reasons both Clarington and Durham Region experienced a decline in total
building permit value in 2007. While in Clarington the residential building permit value
rose and the non-residential building permit value declined, the opposite happened for
Durham Region as a whole. For the second year in a row, Durham Region saw growth
in the value of non-residential building permits and a reduction in the value of residential
building permits. In both cases, declines in one sector were not fully offset by gains in
another.
3.4 Clarinoton's Share of Growth Activitv within Durham Reoion
In 2007, Clarington's share of the total building permit value in Durham Region
decreased by 1.05% from 15.20% in 2006 to 14.15% in 2007. The decrease observed
in the past year is small compared to fluctuations in previous years.
Durham Region municipalities issued building permits for a total of 3.738 new
residential units, a decrease of 28.7% from 5,244 in 2006. Clarington's share of the total
number of new residential units in 2007 was 17.5%, up slightly from 16.34% in 2006.
However, the number of residential permits issued in Clarington was below the level of
2006 and did not meet the anticipated trend. While the number of residential building
permits issued in Clarington fell in 2007, the decline was not as significant as in other
municipalities in Durham Region. Ajax saw the most significant reduction in permits
issued with 50% reduction from 2006.
A weak year in non-residential building permits for Clarington in 2007 decreased the
Municipalities share of the total non-residential building permit value within Durham
Region by 10% from 17.7% in 2006 to 7.7% in 2007. Clarington experienced the most
significant decrease in share from 2006 to 2007 while Oshawa made the most
significant gain taking a 21% increase in share for the last calendar year. Whitby
(-8.5%) had a loss in share similar to Clarington while all other municipalities in the
Region remained relatively neutral.
3.5 Housinq Market Indicators
The average one, three and five year mortgage rates were higher in 2007 (6.9%, 7.09%
and 7.07% respectively) in comparison to 2006 (6.28%, 6.45% and 6.66% respectively).
The bank rate remained steady at 4.5% from May 2006 to July 2007 when it increased
to 4.75% before returning to 4.5% in December. Canada Mortgage and Housing
Corporation (CMHC) report that, "while still low by historical norms, mortgage rates are
expected to rise gradually by 25-50 basis points in 2008."
REPORT NO.: PSD-056-08
PAGE 4
The number of housing starts was 3,870 in Durham Region for 2007, down substantially
(31%) from 5,586 in 2006. Similarly, the number of housing completions were down
7.5% from 5,071 in 2006 to 4,685 in 2007. Housing absorptions also decreased 10.25%
from 5,034 in 2006 to 4,518 in 2007. The average price of a new completed and
absorbed single-detached dwelling in Durham Region was up 7% from $345,900 in
2006 to $370,001 in 2007. In Clarington, prices rose 6.6% from $296,746 in 2006 to
$316,261 in 2007. Clarington continues to be an affordable place to live within Durham
Region and the Greater Toronto Area.
An interesting trend has been emerging in Clarington over the past decade. Throughout
the mid 1990's, the total value of dwellings being constructed, the number of units being
approved for construction and inflation showed a strong relationship to one another.
Moving into the late 1990's, the total value of dwellings being constructed began to rise
more rapidly than it had in the past, pulling away from the annual rate of inflation and
the number of building permits being issued per year - a trend that continued through
the end of 2007. This can be attributed to a number of things including higher costs for
labour and materials, additional design features (e.g. energy conservation), larger
homes, etc. The trend of new home prices increasing at rates exceeding inflation is
troubling because it may mean that housing affordability is more difficult, especially for
first time home buyers.
3.6 Short-Term Outlook
For 2008, CMHC is forecasting that:
"relatively low mortgage rates and strong employment and income growth
(will) continue to support housing starts and MLS@ sales. However,
continued growth in house prices, coupled with global financial instability
could cause mortgage carrying costs to rise. This in turn will dampen the
demand for housing over the next several years."
According to CMHC, housing starts in Ontario "will remain above historical averages
reaching 69,150 units this year and 67,150 units in 2009". Single detached housing
starts will continue to decrease while multi-unit dwelling starts will remain strong.
CMHC also says that home sales in Ontario will generally continue to edge modestly
lower through to the end of 2009. Prices are expected to rise ahead of inflation in 2008
but will slow in 2009.
Overall, the pace of residential building activity decreased in the Municipality of
Clarington but due to inflation in housing prices the value increased by 7.5%. Durham
Region experienced a decrease of 15% in residential building permit value for 2007.
Clarington has maintained a strong share (+4%) of all residential building permit activity
within Durham Region for 2007 holding 17.8% of the value for permits issued
throughout the Region.
Durham Region experienced an increase of 7.8% in non-residential building permit
value for 2007. The Municipality of Clarington has maintained the position of fourth
largest share (7.7%) of non-residential building permit value within Durham Region
despite a 10% loss in share held in 2006. The value of non-residential building permits
in Durham for 2007 at $516.58 million was the second highest level achieved in the
Region's history.
REPORT NO.: PSD-056-08
PAGE 5
In Ontario, non-residential building permit activity was bullish in 2007 as reported by
Statistics Canada. Across the country, investment in non-residential building activity
was strong in 2007 however it is expected to slow for 2008. The Royal Bank Financial
Group forecast that growth will continue at a modest rate for the coming year.
3.7 Short-Term Population and Household Forecasts
The Municipality of Clarington estimated its population for 2007 to be 80,440 and the
total number of households to be 28,000. Durham Region estimated its population to be
611,900 and the total number of households to be 204,960. The estimation of
population for Durham may be 30,000 - 40,000 persons higher than the actual
population when compared to the 2006 census results and growth rates for the region.
Clarington's estimate has 2.88 people per household. Statistics Canada 2006 census
results show that the number is 2.9 people per household, which matches the trends
predicted by Clarington's Development Charges Background Study, 2005. Generally,
household sizes are slowly decreasing in Clarington, which is a reflection of the aging
population in the Municipality.
The Development Charges Background Study indicates that Clarington's population is
expected to grow to approximately 82,590 by the end of 2008 and reach 89,400 by the
end of 2011. This represents a growth rate of 2% annually. The number of households
in Clarington is expected to grow to approximately 28,900 by the end of 2008 and
31,790 by the end of 2011. However, in 2007 the estimated number of households did
not fully materialize as demonstrated by the drop in the number of residential building
permits. Whether the anticipated growth will recover in 2008 will be highly dependent
on other economic drivers and the stability of the employment market.
Attachments:
Attachment 1 - 2007 Growth Trends Review
ATTACHMENT 1
TO REPORT PSD-056-08
2007 Growth
Trends Review
PLANNING SERVICES DEPARTMENT
CID!:.-!lJglon
858
REPLACEMENT PAGE
TO ATTACHMENT 1 OF PSD-056-08
TABLE OF CONTENTS
1. INTRODUCTION............................................................................................................................ 1
1.1. PURPOSE OF THE BUILDING PERMIT ACTIVITY REVIEW ..............................................................1
1.2. INFORMATION SOURCES....................... ....... ...... ......................... ........ ................ ....... ............... 1
1.3. PUBLISHING OF BUILDING PERMIT ACTIVITY REVIEW.................................................................. 1
1.4. CONTACT INFORMATION...........................................................................................................1
2. OVERALL GROWTH TRENDS.....................................................................................................1
2.1. TOTAL BUILDING PERMIT VALUE IN CLARINGTON.......................................................................1
2.2. TOTAL BUILDING PERMIT VALUE IN DURHAM REGION ................................................................ 3
2.3. SHARE OF TOTAL BUILDING PERMIT VALUE IN DURHAM REGION ................................................3
3. RESIDENTIAL GROWTH.............................................................................................................. 5
3.1. TOTAL RESIDENTIAL BUILDING PERMIT VALUE IN CLARINGTON................................................... 5
3.2. SHARE OF NEW RESIDENTIAL BUILDING PERMIT VALUE IN DURHAM REGION .............................. 5
3.3. NEW RESIDENTIAL UNIT PRODUCTION IN CLARINGTON .............................................................. 6
3.4. SHARE OF NEW RESIDENTIAL UNIT PRODUCTION IN DURHAM REGION........................................ 8
3.5. HOUSING MARKET INDICATORS ................................................................................................9
3.6. SHORT-TERM POPULATION FORECAST ................................................................................... 11
4. NON-RESIDENTIAL GROWTH ..................................................................................................12
4.1. TOTAL NON-RESIDENTIAL BUILDING PERMIT VALUE IN CLARINGTON ........................................ 12
4.2. SHARE OF NON-RESIDENTIAL BUILDING PERMIT VALUE IN DURHAM......................................... 13
4.3. NON-RESIDENTIAL FLOOR SPACE PRODUCTION IN CLARINGTON.............................................. 13
5. SYNOPSIS AND SHORT TERM OUTLOOK.............................................................................. 14
5.1....... RESIDENTIAL BUILDING PERMIT ACTiViTY................................................................................ 14
5.2. NON-RESIDENTIAL BUILDING PERMIT ACTIVITY 14
TABLE OF FIGURES
FIGURE 1 - TOTAL BUILDING PERMIT VALUE IN CLARINGTON, 1993-2007....................................................2
FIGURE 2 - TOTAL BUILDING PERMIT VALUE BY RESIDENTIAL/NON-RESIDENTIAL SECTOR IN ........................2
FIGURE 3 - TOTAL BUILDING PERMIT VALUE IN DURHAM REGION, 2000-2007.............................................. 3
FIGURE 4 - TOTAL BUILDING PERMIT VALUE IN CLARINGTON, 1993-2007....................................................5
FIGURE 5 - SHARE OF TOTAL RESIDENTIAL BUILDING PERMIT VALUE IN DURHAM REGION, 2007 .................. 6
FIGURE 6 - NEW RESIDENTIAL UNITS ApPROVED FOR CONSTRUCTION IN CLARINGTON, 1994-2007.............6
FIGURE 7 - RESIDENTIAL BUILDING PERMITS IN RURAL AREAS OF CLARINGTON, 1994-2007........................8
FIGURE 8 - NEW RESIDENTIAL UNIT PRODUCTION BY AREA MUNICIPALITY IN DURHAM REGION, 2006-2007 . 9
FIGURE 9 -AVERAGE MONTHLY BANK INTEREST RATES, 2006-2007 ..........................................................9
FIGURE 10 - HOUSING STARTS, COMPLETIONS AND ABSORPTIONS IN DURHAM REGION, 2006-2007 ........ 10
FIGURE 11 - HOUSING PRICES FOR SINGLE DETACHED HOMES, 2006-2007.............................................. 10
FIGURE 12 - RELATIONSHIP BElWEEN THE VALUE AND PRODUCTION OF DWELLINGS IN
FIGURE 13 - NON-RESIDENTIAL BUILDING PERMIT VALUE IN CLARINGTON, 2006-2007 ..............................12
FIGURE 14 - SHARE OF TOTAL NON-RESIDENTIAL BUILDING PERMIT VALUE IN DURHAM REGION, 2007..... 13
LIST OF TABLES
TABLE 1 - SHARE OF TOTAL BUILDING PERMIT VALUE IN DURHAM REGION, 2000-2007 ..............................4
TABLE 2 - RESIDENTIAL BUILDING PERMITS BY AREA IN CLARINGTON, 2006-2007 ......................................7
TABLE 3 - NEW RESIDENTIAL UNITS IN CLARINGTON BY TYPE, 2006-2007..................................................8
TABLE 4 - SHORT-TERM POPULATION & HOUSEHOLD ESTIMATES FOR CLARINGTON AND
DURHAM REGION, 2008-2011 .................................................................................................................11
859
1. INTRODUCTION
1.1. Purpose of the Building Permit Activity Review
The Planning Services Department conducts on-going monitoring activities to
assess the effectiveness of the Municipality of Clarington Official Plan, as well as
other municipal and Durham Region policies. These monitoring activities also
assist in identifying emerging issues and trends within the Municipality of
Clarington. Building permit activity and other such related data are often used as
an indicator of housing and employment activity within Clarington, the level of
local investment, and economic performance.
1.2. Information Sources
The data collected and analyzed in this report is based on building permit
information and housing market information gathered from a variety of sources.
These sources include:
. Municipal of Clarington's own-source data;
. Durham Region;
. Statistics Canada;
. Canada Mortgage and Housing Corporation;
. Royal Bank of Canada Economics Research; and
. The Bank of Canada
1.3. Publishing of Building Permit Activity Review
The Planning Services Department publishes the Building Permit Activity Review
on an annual basis. Copies of the document are available from the Planning
Services Department directly or can alternatively be accessed online through the
Municipality of Clarington's website at www.clarington.net.
1.4. Contact Information
Should you have any questions, comments, and/or suggestions concerning the
Building Permit Activity Review, please contact the Planning Services
Department by telephone at 905-623-3379 or by email at planning@clarington.net.
2. OVERALL GROWTH TRENDS
2.1. Total Building Permit Value in Clarington
The total value of all building permits issued in Clarington decreased by 14.28%
from $235.25 million in 2006 to $201.65 million in 20071. The total value of
building permits issued in 2007 was similar to the 2005 value (Figure 1.0) and
has been greater than $200 million since 2004. Since 19932, the total value of
building permits issued in Clarington has averaged approximately $130.32 million
per year. The results of 2007 have raised the average once again this year.
1
2
Municipality of Glarington, Engineering Services Department, 2008.
Prior to 1993 the Municipality of Giarington was named the Town of Newcastle. This annual building
pennit review does not include data from before 1993.
Page 1
860
Figure 1 - Total Building Permit Value in Clarington, 1993-2007
250,000,000
200,000,000
150,000,000
$
100,000,000
50,000,000
0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Year
As Figure 2,0 illustrates, the decrease in total building permit value for Clarington
can be attributed to the large decline in non-residential building permit values.
The residential building permit value increased 7.5% from $150.36 million in
2006 to $161.67 million in 2007 whereas the non-residential building permit value
decreased significantly by about 53% from $84.88 million in 2006 to $39.98
million in 20073. Gains for the second year in a row in residential building permit
value were substantially offset by the large decline in non-residential building
permit activity. While residential building permits reached their second highest
value of the past eight years, non-residential building permit values fell to their
lowest level since 2002. This is due to the decline in permits in the Industrial
Sector, and that no government or institutional projects commenced in 2007.
Figure 2 - Total Building Permit Value by Residential/Non-Residential Sector in
Clarington, 2000-2007
180,000,000
160,000,000
140,000,000
120,000.000
100,000.000
$
80,000,000
60.000.000
40,000,000
20,000.000
o
2000
2001
2002
2003
2004
2005
2006
2007
Year
I_ Residential. Non-ReSidentiall
3
Municipality of Glaring/on, Engineering SelVices Department, 2008,
Page 2
861
2.2. Total Building Permit Value in Durham Region
Durham Region experienced a decrease of 8% in total building permit value from
$1.55 billion in 2006 to $1.43 billion in 20074. Total building permit value has
edged lower two years running in Durham (Figure 3). Since 2000, the total value
of building permits issued in Durham Region has averaged about $1.33 billion.
2007 was an above average year despite lower building permit activity than in
the past few years.
Figure 3 - Total Building Permit Value in Durham Region, 2000-2007
1.800,000,000
1,600,000,000
1,400.000.000
1,200,000.000
$ 1,000,000,000
800,000,000
600,000,000
400,000,000
200,000,000
o
2000
2001
2002
2003
2004
2005
2006
2007
Year
For different reasons both Clarington and Durham Region experienced a decline
in total building permit value in 2007. While in Clarington the residential building
permit value rose and the non-residential building permit value contracted5, the
opposite happened for Durham Region as a whole. For the second year in a
row, Durham region saw growth in the value of non-residential building permits
and a reduction in the value of residential building permits6. In both cases,
declines in one sector were not fully offset by gains in another.
2.3. Share of Total Building Permit Value in Durham Region
In 2007, Clarington's share of the total building permit value in Durham Region
decreased by 1.05% from 15.20% in 2006 to 14,15% in 20077 (Table 1). The
decrease observed in the past year is small compared to fluctuations in previous
years.
4
5
6
7
Durham Region Planning Department, Annual Building Pennit Activity Review, 2007.
Municipality of eianngton, Engineenng Services Department, 2008.
Durham Region Planning Department, Annual Building Pennit Activity Review, 2007.
Durham Region Planning Department, Annuai Building Pennit Activity Review, 2007.
Page 3
862
Table 1 - Share of Total Building Permit Value in Durham Region, 2000-2007
Year Total Building Permit Total Building Permit Share of Change from
Value in Durham Value in Clarington Durham (by
($) ($) Clarington) previous year
~'" 997,400,000.00 97,760,960.34 9.80% X
;~~.. 889,700,000.00 131,319,432.00 14.76% 4.96%
\~; 1,200,000,000.00 120,764,948.00 10.06% -4.70%
.'~!I' 1,700,000,000.00 172,409,655.00 10.14% 0.08%
"l!OO4 1 ,300,000,000.00 213,848,329.00 16.45% 6.31%
- 1 ,560,000,000.00 203,220,114.00 13.03% -3.42%
.- 1,548,000,000.00 235,245,253.00 15.20% 2.17%
,..".,C.,,,,,",,,,...'
;~t.i 1,425,000,000.00 201,648,127.00 14.15% -1.05%
Page 4 863
3. RESIDENTIAL GROWTH
3.1. Total Residential Building Permit Value in Clarington
In 2007, the value of residential building permits issued in Clarington totaled
$161.67 million8, which to date is the second highest value of residential building
permits issued by the Municipality in one calendar year and an increase of 7.5%
over 2006 (Figure 4). The Municipality has averaged $95.35 million in annual
residential building permit value between 1993 and 2007.
Figure 4 - Total Building Permit Value in Clarington, 1993-2007
$
180,000,000
160.000,000
140,000,000
120,000,000
100,000,000
80,000,000
80,000,000
40,000,000
20,000.000
o
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Year
3.2. Share of New Residential Building Permit Value in Durham Region
As Figure 5 (next page) shows, Clarington's residential building permits issued in
2007 ranked fourth in value for all of Durham Region contributing 17.8% of the
total value9. Clarington's share increased nearly 4% from 2006 when the
Municipality contributed about 14% of the total residential building permit value
for Durham Region.
8
,
Municipality of Glarington, Engineering Services Department. 2008.
Dumam Region Planning Department, Annual Building Permit Activity Review, 2007.
Page 5
864
Figure 5 - Share of Total Residential Building Permit Value in Durham Region, 2007
Ajax
25.2%
Brock
0.8%
Oshawa
20.3%
Whitby
20.5%
Pickering
7.0%
Scugag
Uxbridge 1.5%
6.8%
3.3. New Residential Unit Production in Clarington
In 2007, residential building permits were issued for 655 new units in Clarington,
down 23.9% from 861 in 200610 (Figure 6). Historically, the number of new
residential units approved for construction has averaged 723 units per year since
1994. The number of building permits issued in 2007 falls short of this number
by 68 units or 9.4% despite the total value of residential construction rising for the
Municipality in the year.
Figure 6 - New Residential Units Approved for Construction in Clarington, 1994-2007
1200
800
1000
# of New Units
Approved for 600
Construction
400
200
o
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Year
10
Municipality of Glaring/on, Engineering Services Department, 2008.
Page 6
865
Bowmanville continues to make the strongest contributions to the total number of
new residential units approved for construction in Glarington. In 2007, Urban
Areas accounted for approximately 97% of new residential units approved for
construction in the Municipalityl1 (Table 2). The share contributed by each
community remained relatively stable for 2007 compared to previous years.
Interestingly, the village of Solina received double the number of approvals in
2007 than in 2006 as the Westlake Estates fill out.
Table 2 - Residential Building Permits by Area in Clarington, 2006-2007
2007
% Share
68.85%
12.52%
11.76%
2.44%
0.15%
0.92%
1.68%
0.00%
0.15%
0.15%
0.15%
0.31%
0.92%
100.00%
2006
% Share
70.70%
14.65%
9.77%
1.74%
0.12%
0.81%
1.40%
0.12%
0.12%
0.00%
0.00%
0.23%
0.35%
100.00%
06-07
Change
-1.84%
-2.13%
1.99%
0.70%
0.04%
0.10%
0.28%
-0.12%
0.04%
0.15%
0.15%
0.07%
0.57%
0.00%
Units
451
82
77
16
1
6
11
o
1
1
1
2
6
655
Units
608
126
84
15
1
7
12
1
1
o
o
2
3
860
The number of building permits issued in rural areas of the Municipality has
fluctuated greatly over the years, but recently has settled back to levels observed
in the mid 1990's (Figure 7)12. The current trend (reduction in building permits
issued in rural areas) is positive since growth is to be directed to urban areas as
per the Provincial Policy Statement (2005) and the Municipality of Glarington
Official Plan (1996). Residential growth in Glarington's rural area has exceeded
the targets set out by the 1996 OP and should therefore be kept to a minimum.
11
12
Municipality of Glarington, Engineering Services Department, 2008.
Municipality of Glarington, Engineering Services Department, 2008.
Page 7
866
Figure 7 - Residential Building Permits in Rural Areas of Clarington, 1994-2007
140
# of Building
Permits Issued 60
80
120
100
40
20
o
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Year
In 2007, building permits issued for single detached homes dominated all other
activity. The number of permits for this type of dwelling remained relatively
stable from 2006 to 2007 controlling about 66% of the market during the last
calendar yearB The number of permits issued for semi-detached dwellings and
townhouses increased substantially in 2007, up nearly 58% from 2006. Building
permits issued for apartment developments were reduced to almost nothing in
2007, down 99% from 2006 (Table 3).
Table 3 - New Residential Units in Clarington by Type, 2006-2007
Type of New
Residential Unit
2007
% Share
2006
% Share
434
116
102
3
655
66.26%
17.71%
15.57%
0.46%
X
414
100
72
275
861
48.08%
11.61%
8.36%
31.94%
X
3.4. Share of New Residential Unit Production in Durham Region
In 2007, Durham Region municipalities issued building permits for a total of 3,738
new residential units, a decrease of 28.7% from 5,244 in 200614 (Figure 8).
Clarington's share of the total number of new residential units in 2007 was
17.5%, up slightly from 16.34% in 2006. This is contrary in that the number of
residential building permits issued in Clarington fell in 2007 however not as
significantly as other municipalities in Durham Region. Ajax saw the most
significant reduction in permits issued with 50% reduction from 2006.
13
14
Municipality of Glarington, Engineering Services Department, 2008.
Durham Region Planning Department, Annual Building Permit Activity Review, 2007.
Page 8
867
Figure 8 - New Residential Unit Production by Area Municipality in Durham Region,
2006-2007
Units
19
19
857
656
241
227
1037
913
Municipality
3.5. Housing Market Indicators
The average one, three and five year mortgage rates were higher in 2007 at
6.9%,7.09% and 7.07% respectively in comparison to 2006 at 6.28%, 6.45% and
6.66% respectively (Figure 9).15 The bank rate remained steady at 4.5% from
May 2006 to July 2007 when it increased to 4.75% before returning to 4.5% in
December. Canada Mortgage and Housing Corporation (CMHC) report that,
"while still low by historical norms, mortgage rates are expected to rise gradually
by 25-50 basis points in 2008.,,16
Figure 9 - Average Monthly Bank Interest Rates, 2006-2007
8
7
8
5
Rate (%) 4
3
2
1
o
Jan Mar May Jul Sep Nav Jan Mar May JuJ Sep Nov
2006 2007
MonthlY ear
! -+- Bank Rate _____ 1 Year Mortgage
3 Year Mortgage ~ 5 Year Mortgage
15
16
Bank of Canada: http://www.bankofcanada.ca/cgi-bin/famecgijdps
Canada Mortgage and Housing Corporation, Housing Market Outlook - Greater Toronto Area, Fall
2007
Page 9 868
The number of housing starts was 3,870 in Durham Region for 2007, down
substantially (31%) from 5,586 in 2006. Similarly, the number of housing
completions were down 7.5% from 5,071 in 2006 to 4,685 in 2007. Housin~
absorptions also decreased 10.25% from 5,034 in 2006 to 4,518 in 20071
(Figure 10).
Figure 10 - Housing Starts, Completions and Absorptions in Durham Region,
2006-2007
6000
5000
4000
Units 3000
2000
1000
o
Starts
Completions
Absorptions
1_2006 _2007 I
The average price of a new completed and absorbed single-detached dwelling in
Durham Region was up 7% from $345,900 in 2006 to $370,001 in 2007. In
Clarington, prices rose 6.6% from $296,746 in 2006 to $316,261 in 200t8
(Figure 11). Clarington continues to be an affordable place to live within Durham
Region or the Greater Toronto Area.
Figure 11 - Housing Prices for Single Detached Homes, 2006-2007
600.000.00
500,000.00
400.000.00
$ 300.000.00
200,000.00
100,000.00
0
I_ 2006 ' $296,746.00
I~ $316,261.00
$345,900.00
$370.001.00
$453.759.00
$494,211.00
17
18
Canada Mortgage and Housing Corporation, Housing Now - Greater Toronto Area, Jan. 2008
Canada Mortgage and Housing Corporation, Housing Now - Greater Toronto Area, Jan. 2008.
Page 10 869
3.6. Short-Term Population Forecast
The Municipality of Clarington estimated its population for 2007 to be 80,440 and
the total number of households to be 28,00019, Durham Region estimated its
population to be 611,900 and the total number of households to be 204,96020.
The estimation of population for Durham may be 30,000 - 40,000 persons higher
than the actual population when compared to the 2006 census results and
growth rates for the region,
Clarington's estimate has 2.88 people per household21. Statistics Canada 2006
census results show that the number is 2.9 people per household22, which
matches the trends predicted by Clarington's Development Charges Background
Study. Household sizes are decreasing in Clarington, which is a reflection of the
older population that is attracted to Clarington,
The 2006 Durham Region Profile indicates that Durham's population is expected
to reach approximately 620,700 by the end of 2008 and 657,310 by the end of
2011, The represents a growth rate of 1.5% annually, For the same period, the
Development Charges Background Study indicates that Clarington's population
is expected to grow to approximately 82,590 by the end of 2008 and reach
89,400 by the end of 2011, This represents a growth rate of 2% annually.
Durham Region is expected to have approximately 210,190 households by the
end of 2008 and 231,480 by the end of 201123. The number of households in
Clarington is expected to ~row to approximately 28,900 by the end of 2008 and
31,790 by the end of 2011 4 (Table 4).
Table 4 - Short-Term Population & Household Estimates for Clarington and Durham
Region, 2008-2011
% %
Clarlngton Durham Population Clarington Durham Household
Year Population Region Share of Households Region Share of
Population Region for Households Region for
Clarln ton Clarln ton
82,590 620,700 13.31% 28,900 210,190 13.75%
84,800 630,500 13.45% 29,830 215,860 13.82%
87,070 641,300 14.33% 30,790 222,040 14.09%
89,400 657,310 13.60% 31,790 231 ,480 13.73%
19
20
21
22
23
24
Municipality of Glarington Development Charges Background Study, 2005.
Durham Region Profile, Demographics and Socia-Economic Data, Aug. 2006.
Municipality of Clarington Development Charges Background Study, 2005.
Statistics Canada, www.statcan.ca Cia ring/on Community Profile, 2006.
Durham Region Profile, Demographics and Socia-Economic Data, Aug. 2006.
Municipality of Ciarington Development Charges Background Study. 2005.
Page 11
870
4. NON-RESIDENTIAL GROWTH
4.1. Total Non-Residential Building Permit Value in Clarington
The value of non-residential building permits issued in Glarington during 2007
was $39,98 million, a decrease of 52,9% from 2006 when the value of building
permits issued in Glarington topped $84,88 million, This overall decrease in the
non-residential building permit value in 2007 was due to an 85% reduction in the
value of industrial building permits issued and a 99% reduction in the building
permit value from the government category25, The industrial sector includes
Ontario Power Generation which has had major projects in recent years,
Increases in the value of commercial, institutional and agricultural building permit
categories were not nearly enough to offset the substantial reduction in value of
the industrial and government categories (Figure 13), In 2007, the value of
agricultural building permits issued by the Municipality of Glarington increased by
almost 400% from 2006 levels.
Figure 13 - Non-Residential Building Permit Value in Clarington, 2006-2007
50,000,00
45,000,00
40,000,00
35,000,00
30,000,00
$ 25,000,00
20,000,00
15,000,00
10,000,00
5,000,00
Industrial
Government
Commercial
Institutional
Agricultural
Type
1.2006.20071
The following list highlights the major non-residential building projects reported in
2007:
· Honda Dealership in Bowmanville ($4.5 million);
· Shoppers Drug Mart on Longworth Ave, Bowmanville ($400,000);
· Barrie's Dairy Barn on Bragg Road, Bowmanville ($906,430); and
· Thornlea Holsteins on Bellamy Road, Newtonville ($2,521,678)
25
Municipality of Glarington, Engineering Services Department, 2008,
Page 12
871
4.2. Share of Non-Residential Building Permit Value in Durham
A weak year in non-residential building permit value for Clarington in 2007
decreased the Municipalities share of the total non-residential building permit
value within Durham Region by 10% from 17.7% in 2006 to 7.7% in 2007 (Figure
14). Clarington experienced the most significant decrease in share from 2006 to
2007 while Oshawa made the most significant gain taking a 21% increase in
share for last calendar year. Whitby (-8.5%) had a loss in share similar to
Clarington while all other municipalities in the Region remained relatively
neutral2627.
Figure 14 - Share of Total Non-Residential Building Permit Value in
Durham Region, 2007
Brock
0.3%
'Clarington I
I 7.7% I
Ajax
18.5%
~
~~.
Oshawa
50.8%
. ..-
,',
Scugog Pickering
1.1% 5.0%
4.3. Non-Residential Floor Space Production in Clarington
Clarington's production of non-residential floor space increased 4.4% or 16,500
square feet from 374,800 square feet being added in 2006 to 391,300 square
feet being added in 2007. Of the municipalities in Durham Region, non-
residential floor space production in Clarington, Brock (+9.47%) and Pickering
(no change) remained relatively neutral in 2007. The City of Oshawa (+44.4%)
made the only significant gains in the Region while Ajax (-60.8%), Scugog (_
28.9%), Uxbridge (-26.5%) and Whitby (-62.5%) all experienced substantial
decreases in floor space production for 200728.
Page 13 872
26 Municipality of C/arington, Engineering Services Department, 2008.
27 Durham Region Planning Department, Annual Building Permit Activity Review, 2007.
28 Durham Region Planning Department, Annual Building Permit Activity Review, 2007.
5. SYNOPSIS AND SHORT TERM OUTLOOK
5.1. Residential Building Permit Activity
Overall, the pace of residential building permit activity in the Municipality of
Clarington decreased 23.9% in 2007, while the value increased by 7.5%.
Durham Region experienced a decrease of 15% in residential building permit
value for 2007. Clarington has maintained a strong share (+4%) of all residential
building permit activity within Durham Region for 2007 holding 17.8% of the value
for permits issued throughout the Region. The Municipality brought in the fourth
greatest residential building permit value in the Region behind Ajax (25.2%),
Whitby (20.5%) and Oshawa (20.3%).
For 2008, CMHC is forecasting that "relatively low mortgage rates and strong
employment and income growth (will) continue to support housing starts and
MLS@ sales. However, continued growth in house prices, coupled with global
financial instability could cause mortgage carrying costs to rise. This in turn will
dampen the demand for housing over the next several years.,,29 According to
CMHC, housing starts in Ontario "will remain above historical averages reaching
69,150 units this year and 67,150 units in 2009." Single detached housing starts
will continue to decrease while multi-unit dwelling starts will remain strong.
CMHC also says that home sales in Ontario will generally continue to edge
modestly lower through to the end of 2009. Prices are expected to rise ahead of
inflation in 2008 but will slow in 200930.
5.2. Non-Residential Building Permit Activity
Overall, the non-residential building permit activity in Clarington has decreased
by 10.4% in 2007, while the value decreased by 52.9%. Durham Region
experienced an increase of 7.8% in non-residential building permit value for
2007. The Municipality of Clarington has maintained the position of fourth
largest share (7.7%) of non-residential building permit value within Durham
Region despite a 10% loss in share held in 2006. The value of non-residential
building permits in Durham for 2007 at $516.58 million was the second highest
level achieved in the Region's history (the highest was $650 million is 2003).
In Ontario, non-residential building permit activity was bullish in 200731. Across
the country, investment in non-residential building activity was strong in 2007
however is expected to slow for 2008. Growth will continue but will be modest for
the coming year.32
29
30
31
32
CMHC, Housing Market OuUook, Canadian Highlights - First Quarter 2008.
CMHC, Housing Market OuUook, Ontario Region Highlights - First Quarter 2008.
Statistics Canada, The Daily www.statcan.gc.ca
RBC Economics Research, Canadian City Trends - November 2007. www.rbc.com/economics
Page 14
873