HomeMy WebLinkAboutPSD-071-10C~ar~~on REPORT
Leadirsg the Way
PLANNING SERVICES
Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE
Date: June 7, 2010 Resolution#: G~"33~'r~ By-law#: N/A
Report #: PSD-071-10 File #: PLN 9.4
Subject: 2009 GROWTH TRENDS REVIEW
RECOMMENDATIONS:
It is respectfully recommended that the General Purpose and Administration Committee
recommend to Council the following:
THAT Report PSD-071-10 be received for information.
Submitted by: ~ Reviewed by:
e ang aid, SLA, MCIP
i Director tanning Services
RH/MM/av/df
1 June 2010
~~
r
~, ~;
Franklin Wu,
Chief Administrative Officer
CORPORATION OF THE MUNICIPALITY OF
REPORT NO.: PSD-071-10 PAGE 2
1.0 BACKGROUND
1.1 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 assist in identifying
emerging issues and trends within the Municipality of Clarington. Building permit
activity and other related data are often used as indicators of housing and employment
activity within Clarington, the level of local investment, and economic performance;
this and other information has been compiled into the 2009 Growth Trends Review.
2.0 KEY FINDINGS OF THE 2009 GROWTH TRENDS REVIEW
2.1 The 2009 Growth Trends Review, Attachment 1, examines Clarington's growth activity
and compares its performance against otherarea municipalities within Durham
Region. In addition, the Review examines past, current and forecast housing market
activity and provides ashort-term outlook on future development activity for Clarington
and Durham Region. While current global economic events have over-shadowed and
affected the local market activity, it is still important to consider Clarington's
performance in relationship to the GTA and other local municipalities.
2.2 Growth Activitv in Clarington
The total value of all building permits issued in Clarington decreased by 31.7% from
$193.40 million in 2008 to $132.17 million in 2009. The total value of building permits
issued in 2009 was similar to the values realized in the early 2000's. This is, in part,
due to a significant decline (-53.96%) in the number of new residential permits issued
in 2009.
2.3 Growth Activitv in Durham Region
Durham Region experienced a decrease of 17.7% in total building permit value from
$1.29 billion in 2008 to $1.06 billion in 2009. Total building permit value has edged
lower four years running in Durham. Since 2000, the total value of building permits
issued in Durham Region has averaged about $1.3 billion. The past year was the
second time since 2002 that the total building permit value for Durham Region fell
below $1.3 billion.
2.4 Clarington's Share of Growth Activitv within Durham Reaion
In 2009, Clarington's share of the total building permit value in Durham Region
decreased to 12.42%. The change observed in the past year is comparable to normal
fluctuations which have occurred throughout the last decade.
Durham Region municipalities issued building permits for a total of 2,168 new
residential units, a decrease of 32% from 2008.
NO.: PSD-071-10 PAGE 3
In Clarington, the number of building permits issued for new residential units has fallen
short of the forecast made in the 2005 Development Charges Background Study;
however, because of spikes in prior years the overall total number of households is on
target. The economic environment has changed significantly since 2005 and as a
result of tightened credit markets and other economic factors, the demand for new
residential units has been lower than expected for the past several years. Demand is
expected to recover slowly over the years to come, beginning this year.
A rise in the non-residential building permit value for Clarington in 2009 increased the
Municipality's share of the total non-residential building permit value within Durham
Region to 11.3% in 2009 from 7.8% in 2008.
2.5 Housing Market Indicators
The average one, three and five year mortgage rates were significantly lower in 2009
compared to 2008, at 4.02%, 4.57% and 5.63%, respectively, as the economy
continued to recover. After a considerable drop at the end of 2008 and beginning of
2009, the bank rate remained stable, at 0.5%, from April to December 2009. Canada
Mortgage and Housing Corporation (CMHC) reports that:
"Mortgage rates are- expected to gradually rise over the course of 2010
and 2011, but will remain very !ow in a historical context".
The following points provide an overview of the 2009 housing market in Durham
Region and Clarington:
• In Durham Region, the number of housing starts was down 35% to 2,017;
• In Durham Region, the number of housing completions was down 35% to 2,505;
• In Durham Region, the number of housing absorptions was down 33% to 2,551;
• In Durham Region, the average price of new completed and absorbed single
detached dwellings decreased by less than 1 % to $396,274; and,
• In Clarington, the average price of single detached dwellings decreased by less
than 1 % to $337,257.
2.6 Short-term Outlook
CHMC is forecasting that 2010 will see a strong improvement in housing starts for
both single detached and multi-family dwellings as the economy recovers from the
downturn of 2009. Nationally, single detached starts will increase from 75,659 units in
2009 to 86,450 units in 2010, with a slight decrease in 2011 to 85,850 units. This will
be complemented by approximately 84,800 multiple unit starts in 2010, "increasing to
89,300 units in 2011 as stronger economic activity and employment support housing
demand". However, CMHC also projects that "measures recently announced for
government-backed mortgage insurance will moderate housing starts activity."
REPORT NO.: PSD-071-10
PAGE 4
Overall, the pace of new residential building permit activity in the Municipality of
Clarington decreased by 53.96% from 2008 to 2009, while the value decreased by
45.89%. Durham Region experienced a decrease of 17.96% in residential building
permit value for 2009. Clarington's share of residential building permit activity within
Durham Region for 2009 decreased (-6.9%) to only 13.3% of the value for permits
issued throughout the Region since 2008. The Municipality brought in the fourth
greatest residential building permit value in the Region behind Whitby (19.1 %),
Oshawa (23.5%) and Ajax (34.2%).
Durham Region experienced a decrease of 19.6% in non-residential building permit
value for 2009. The Municipality of Clarington is tied with Pickering for the position of
fourth largest share (11.3%) of non-residential building permit value. The value of
non-residential building permits in Durham for 2009 at $458.2 million was similar to
the values realized throughout the mid-2000's.
In Ontario and across the country, investment in non-residential building activity was
down slightly in 2009. This downward trend continued for the first quarter of 2010.
Institutional projects continue to grow in value, however the country has continued to
see a sharp decline in commercial building investment. In contrast, Clarington saw
tremendous commercial building value growth in 2009. The Royal Bank of Canada
states that the fourth quarter of 2009 saw more growth than originally expected and
prospects for 2010 have brightened. Advanced economies and some emerging
economies around the world. are expected to grow moderately throughout 2010 and
into 201 L
2.7 Short-Term Pooulation and Household Forecasts
The Municipality of Clarington estimated its population for 2009 to be 86,103
(including the census under count) and the total number of households to be 28,850.
While the population growth is keeping pace, the rate of growth for new residential
units has declined. The estimated number of households from 2007 to 2009 did not
fully materialize, with the number of units in 2009 falling significantly below the
projection. Although population targets are being met, household targets are less than
anticipated for those years, which means the number of people per unit has not
declined as forecast.
Clarington's population is expected to grow to approximately 87,899 by the end of
2010 and reach 89,731 by the end of 2011, which represents a growth rate of 2.0%
annually. The number of households in Clarington is expected to grow to
approximately 29,532 by the end of 2010 and 30,231 by the end of 2011. According
to the CMHC forecast, housing starts will strongly improve; however that is the
national outlook. Locally, the Places to Grow Act requirements may have a greater
input on the type of housing being built.
Staff Contacts: Mitch Morawetz and Robin Heathcote
Attachments:
Attachment 1 - 2009 Growth Trends Review
2009 GROWTH
TRENDS REVIEW
Attachment 1
To Report PSD-071-10
PLANNING SERVICES DEPARTMENT
C~ari~ n
Leading the Way
TABLE OF CONTENTS
1.0 INTRODUCTION ..........................................................................1
1.1 PURPOSE OF THE GROWTH TRENDS REVIEW ........................................ ..1
1.2 INFORMATION $OURCES ................................................................. ..1
1.3 PUBLISHING OF BUILDING PERMIT ACTIVITY REVIEW ............................ ...1
1.4 CONTACT INFORMATION ................................................................ ..1
2.0 OVERALL GROWTH TRENDS .................................................... ..2
2.1 TOTAL BUILDING PERMIT VALUE IN CLARINGTON ................................ ..Z
2.2 TOTAL BUILDING PERMIT VALUE IN DURHAM REGION ......................... ..3
2.S SHARE OF TOTAL BUILDING PERMIT VALUE IN DURHAM REGION ........... ..4
3.0 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 ....................... ...b
3.4 SHARE OF NEW RESIDENTIAL UNIT PRODUCTION IN DURHAM REGION ... ..9
3.5 HOUSING MARKET INDICATORS .......................................................1 O
3.6 SHORT-TERM POPULATION FORECAST ............................................... 12
4.0 NON-RESIDENTIAL GROWTH ................................................... 14
4.1 TOTAL NON-RESIDENTIAL BUILDING PERMIT VALUE IN CLARINGTON ..... 14
4.2 SHARE OF NON-RESIDENTIAL BUILDING PERMIT VALUE IN DURHAM ...... 15
4.3 NON-RESIDENTIAL FLOOR SPACE PRODUCTION IN CLARINGTON.......... 15
5.0 SYNOPSIS AND SHORT-TERM OUTLOOK ................................ 1 b
5.1 RESIDENTIAL BUILDING PERMIT ACTIVITY ............................................ 1 6
5.2 NON-RESIDENTIAL BUILDING PERMIT ACTIVITY ................................... 1 fi
LIST OF FIGURES
Figure 1: Total Building Permit Value in Clarington, 1993-2009
Figure 2: Total Building Permit Value by Residential/Non-Residential
Sector in Clarington, 2000-2009
Figure 3: Total Building Permit Value in Durham Region, 2000-2009
Figure 4: Total Building Permit Value in Clarington, 1993-2009
Figure 5: Share of Total Residential Building Permit Value in Durham
Region, 2009
Figure b: New Residential Units Approved for Construction in Clarington
1994-2011
Figure 7: Residential Building Permits in rural Areas of Clarington, 1994-
2009
Figure 8: Share of New Residential Unit Production in Durham Region,
2008-2009
Figure 9: Average Monthly Bank Interest Rates, 2008-2009
Figure 10: Housing Starts, Completions and Absorptions in Durham
Region, 2008-2009
Figure 1 1 : Housing Prices for Single Detached Homes, 2008-2009
Figure 12: Average Value of Single Detached Dwellings versus Number
of New Residential Units Approved, 2004-2009
Figure 13: Non-Residential Building Permit Value in Clarington, 2005-2009
Figure 14: Share of Total Non-Residential Building Permit Value in
Durham Region, 2009
LIST OF TABLES
Table 1: Share of Total Building Permit Value in Durham Region, 2000-
2009
Table 2: Residential Building Permits by Area in Clarington, 2008-2009
Table 3: New Residential Units in Clarington by Type, 2008-2009
Table 4: Short-Term Population & Household Estimates for Clarington
and Durham Region, 2009-201 1
1.0 INTRODUCTION
~.~ PURPOSE OF THE GROWTH TRENDS 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 Regional policies. These
monitoring activities also assist in identifying emerging issues and trends
within the Municipality of Clarington. Building permit activity and other
related data are often used as indicators of housing and employment
activity within Clarington, the level of local investment, and economic
performance.
1.Z 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:
• 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.
1.3 PUBLISHING OF BUILDING PERMIT ACTIVITY REVIEW
The Planning Services Department publishes the Growth Trends Review on
an annual basis. Copies of the document are available from the Planning
Services Department directly or alternatively can be accessed online at
www.clarington.net.
1.4 CONTACT INFORMATION
Should you have any questions, comments, and/or suggestions
concerning the Growth Trends Review, please contact the Planning
Services Department by telephone at 905-623-3379 or by email at
planning@clarington.net.
Page ~ 1
2.0 OVERALL GROWTH TRENDS
Z.1 TOTAL BUILDING PERMIT VALUE IN CLARINGTON
The total value of all building permits issued in Clarington decreased by
31.7% from $193.40 million in 2008 to $132.17 million in 2009. The total
value of building permits issued in 2009 was similar to the values realized in
the early 2000's (Figure 1). Since 19932, the total value of building permits
issued in Clarington has averaged approximately $134.14 million per year.
The results of 2009 lowered the average by approximately $130,000, which
can be attributed to the unfavourable economic conditions of this past
year.
As Figure 2 (next page) illustrates, the decrease in total building permit
value for Clarington can be attributed to a sharp decline in the residential
building permit value. The non-residential building permit value increased
16% from $44.45 million in 2008 to $51.57 million in 2009 whereas the
residential building permit value decreased by about 45.9% from $148.95
million in 2008 to $80.59 million in 20093. Residential building permit values
have risen significantly over the past ten years. Due to poor economic
conditions globally, Clarington saw building permit values decline to a
level similar to 2000. Gains made over the last several years in residential
building permit activity were lost in 2009 as the residential building permit
value weakened significantly. Both the number of permits and the value
of permits were well below the average of the last decade. While non-
residential building permits edged slightly higher in 2009, the increase in
value did not compensate for the reduction in residential building permit
value for the year.
~ Municipality of Clarington, Engineering Services Department, January 2010.
z Municipality of Clarington, Engineering Services Department, January 2010.
s Durham Region Planning Department, Annual Building Permit Activity Review, March 2010.
Page ~ 2
Figure 1: Total Building Permit Value in Clarington, 1993-2009
Figure 2: Total Building Permit Value by Residential/Non-Residential Sector in Clarington,
2000-2009
$1ao,ooo,ooo.oo
$160,000,000.00 -- -----
$14Q000,000.00 -----------
$120,000,0OO.OD ------
$aa,ooo,oao.oo -- --
$sa,ooo,ooo.oo
$agooo,ooo.oo
$za,ooo,aoo.oo
$-
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Year
^ Residential ®Non-Residential
2.2 TOTAL BUILDING PERMIT VALUE IN DURHAM REGION
Durham Region experienced a decrease of 17.7 in total building permit
value from $1.29 billion in 2008 to $1.06 billion in 20094. Total building permit
value has edged lower four years running in Durham Region (Figure 3).
Since 2000, the total value of building permits issued in Durham Region has
averaged about $1.3 billion. 2009 was a below average year as a result of
lower building permit activity than that of the past several years. The past
year was only the second time since 2002 that the total building permit
value for Durham Region fell below $1.3 billion.
^ Durham Region Planning Department, Annual Building Permit Activity Review, March 2010.
Page ~ 3
Figure 3: Total Building Permit Value in Durham Region, 2000-2009
Clarington and Durham Region. experienced a decline in total building
permit value in 2009. The residential building permit value decreased and
the non-residential building permit value roses in Clarington, while both
the residential and non-residential values decreased for Durham Region
as a whole. For the fourth year in a row, Durham Region saw a reduction
in the value of residential building permitsb. Non-residential building permit
values ,.had been increasing steadily in Durham Region since 2005;
however a decline in value of about $100 million was experienced in 2009.
Z.3 SHARE OF TOTAL BUILDING PERMIT VALUE IN DURHAM REGION
In 2009, Clarington's share of total building permit value in Durham Region
decreased by 2.54% from 14.96% in 2008 to 12.42 in 2009 (Table 1). The
change observed in the past year is typical when compared to the
previous years.
Table 7: Share of Tofal Building Permit Value in Durham Region, 2000-2009
~,, $997,400,000.00 $97,760,960.34 9.80% -
y ',n $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%
$1,700,000,000.00 $172,409,655.00 10.14% 0.08%
,~ $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%
;a4 ~ - v; $1,548,000,000.00 $235,245,253:00 15.20% 2.17%
$1,425;000,000.00 $201,648,127.00 14.15% -1,05%
$1;293,100,000.00 $193,402,725.00 14.46% 0.81%
$1;064,200,000.00 $132,165,301.00 12.42% -2.54%
s Municipality of Clarington, Engineering Services Department, January 2010.
b Durham Region Planning Department, Annual Building Permit Activity Review, March 2010.
Page ~ 4
3.0 RESIDENTIAL GROWTH
S.1 TOTAL RESIDENTIAL BUILDING PERMIT VALUE IN CLARINGTON
In 2009, the value of residential building. permits issued in Clarington
totaled $80.59 million7, which was the lowest value of residential building
permits issued by the Municipality in the last decade. As shown in Figure
4, the total value of residential building permits issued in 2009 was down
46% from the 2008 value, returning to just under the 2001 value of $83.96
million. The Municipality has averaged $97.64 million in annual residential
building. permit value between 1993 and 2009, due to building permit
values of over $100 million between 2003 and 2008. The significant
decrease in residential building permit value in 2009 was primarily
attributed to poor economic conditions resulting in a decreased demand
for new residential units.
Figure 4: Total Building Permit Value in Clarington, 1993-2009
$160 000 000 00
$
$0 00
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Year
$1so,ooo,ooo.ao
$1ao,ooo,ooo.oo - -- --
$1zo,ooo,ooo.oo -
$100,0oo,ooa.oo -
$ea,ooo,ooa.oo
$60,000,000.00
$40,000,000.00
$20,000,000.00
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 2009 ranked fourth in value for all of Durham Region, contributing
13.3% of the total values. Clarington's share decreased 6.9~ from 2008
when the Municipality contributed about 20.2% of the total residential
building permit value for Durham Region.
~ Municipality of Clarington, Engineering Services Department, January 2010.
e Durham Region Planning Department, Annual Building Permit Activity Review, March 2010.
Page ~ 5
figure 5: Share of Total Residential Building Permit Value in Durham Region, 2009
Brock
2 0% Clarington
13.3
Ajax
34.2%
i
~~ j~
Oshawa
23.5%
Pickering
Whitby Uxbridge Scu9o9 5.1%
19.1% 1.0/0
1.8%
S.3 NEW RESIDENTIAL UNIT PRODUCTION IN CLARINGTON
In 2009, residential building permits were issued for 273 new units in
Clarington, which was down 54% from the 593 permits issued in 20089.
Historically, the number of new residential units approved for construction
has averaged at 687 units per year since 1994. The number of building
permits issued in 2009 falls short of this number by 414 units or 60%, which
accounts for the significant decline in the total value of residential
construction in the Municipality for the year.
In addition, the number of building permits issued for new residential units
has fallen significantly short of the forecast made in the 2005
Development Charges Background Study~~ (Figure 6, next page). The
economic environment has changed substantially since 2005 and as a
result of tightened credit markets and other economic factors, the
demand for new residential units has been lower than expected. The 2010
Development Charges Background Study~~ forecasts residential unit
growth reflective of economic conditions, however, the new residential
units approved in 2009 are still considerably lower than initially
anticipated. Figure 6 (next page) also shows these projections, which
estimate nearly 300 permits less per year than what was projected by the
2005 Study.
s Municipality of Clarington, Engineering Services Department, January 2010.
~~ Hemson Consulting Ltd., Development Charges Background Study, May 2005.
~~ Hemson Consulting Ltd., Development Charges Background Study, April 2010.
Page ~ 6
ure 6: New RESiaenl
1200
1000
600
# of New Units
Approved for 600
Construction
400
200
0
m ~iannaton.irra-zuii
^ New Residential Units Approved p 2010 DC Background Study Forecast
®2005 DC Background Study Forecast
The growing urban centres of Bowmanville, Courtice and Newcastle
continue to make the strongest contributions to the total number of new
residential units approved for construction in Clarington. In 2009, these
centres accounted for 86% of new residential units approved for
construction in the Municipality12 (Table 2, continued on next page). The
share contributed by each community remained relatively stable
between 2008 and 2009, with the exception of the shift in share made
between Bowmanville and Courtice, and a notable increase in share by
the Clarke rural area and the hamlet of Solina.
98 35:90% 340 57.34% `-21.44%
112 41.03% 134 22.60% 18.43%
24 8.79% 60 10.12% -1.33%
9 3.30% 30 5.06% -1.76%
0 0.00% 2 0.34% -0.34%
6 2.20% 10 1.69% 0:51%
11 4.03% 5 0.84% 3.19%
0 0.00% 0 0.00 0.00%
0 0.00% 0 0.00% 0.00%
2 0.73% 0 0.00% 0.73%
0 0.00% 0 0.00% 0.00%
12 Municipality of Clarington, Engineering Services Department, January 2010.
Page ( 7
v in co n w rn o cu M y v~ <o rr A rn o
m rn rn m rn rn o 0 0 0 0 0 0 0 0 0
~~~~~~ N N N N N N N N N N N N
Year
Table 2: Residential Building Permits by Area in Clarington, 2008-2009
2009 2008 ~nnx_~nnv
---- ----
Units %Share .Units %Share Change ~
0 0.00% 0 0:00% ` 0.00%
1 0.37% 0 0.00% 0.37%
0 0:00% 0 0.00% 0.00%
0 0.00% 0 0.00% 0:00%
0 0.00% 0 0.00%. 0.00%
0 0.00% 0 0.00% D.00%
5 1.83% 7 1:18% Q:65%
5 1.83% 0 0.00% T.83%
0 0.00% 5 0.84% -0.84%
273 100.00% 593 100.00% 0.00%
As shown in Figure 7, 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's13. This reduction in
building permits issued within rural areas is a positive trend as the
Provincial Policy Statement (2005) and the Municipality of Clarington
Official Plan (1996) both direct growth to urban areas. Residential growth
in Clarington's rural areas has already exceeded the targets set out by
the 1996 Official Plan, and is anticipated to continue to decline as the
rural population stabilizes at a sustainable level.
Figure 7: Residential Building Permits in Rural Areas of Clarington, 7994-2009
In 2009, building permits issued for single detached homes dominated all
other activity. The share of permits for single detached dwellings
increased by approximately 1~ from 2008 to 2009, controlling about 76%
13 Municipality of Clarington, Engineering Services Department, January 2010.
Page ~ 8
of the market during the last calendar year14; however the number of
such permits decreased by more than half from 2008 to 2009. The number
of permits issued for semi-detached dwellings and townhouses was also
lower in 2009, with an 86% decrease in building permits issued for
townhouses compared to the pervious year. Building permits issued for
apartment developments, however, held a 4.4% market share compared
to only 0.84% market share in 2008 (Table 3).
3.4
Table 3: New Residential Units in Clarington by Type, 2008-2009
208 76.19% 447 75.38%
~„ i't ~',' ~ db
~ 16.85% 92 _ 15.51%
,~w
, ~ 7 2.56% 49 $.26%
<,.,
T2
4.40%
5
0:84%
273. - 593 -
SHARE OF NEW RESIDENTIAL UNIT PRODUCTION IN DURHAM REGION
In 2009, Durham Region municipalities issued building permits fora total of
2,168 new residential units, a decrease of 32% from 3,177 in 200815 (Figure
8j. Clarington's share of the total number of new residential units in 2009
was 12.5%, down from 18.7% in 2008, and ranked fourth under Whitby,
Oshawa and Ajax. Ajax and Brock were the only municipalities in the
Region in 2009 that saw an increase in residential unit production, at 30%
and bl%, respectively.
Figure 8: Share of New Residential Unit Production in Durham Region, 2008-2009
1000
soo - -- ----- --------
soo ~r,
Units j
400 j
200
0
Ajax Brock garington it Oshawa Rckering Scugog '. Uxbridge Whdby
® 2008 631 18 594 780 265 79 115
--_-_~~ 695
^ 2009 899 46 272 521 66 12
28 324
Municipality
14 Municipality of Clarington, Engineering Services Department, January 2010.
75 Durham Region Planning Department, Annual Building Permit Activity Review, March 2010.
Page ~ 9
S.S HOUSING MARKET INDICATORS
The average one, three and five year mortgage rates were significantly
lower in 2009 as the economy continued to recover, at 4.02%, 4.57 and
5.63%, respectively, in comparison to the 2008 rates, which were 6.70%,
6.87 and 7.06%, respectivelylb (Figure 9). After a considerable drop at
the end of 2008 and beginning of 2009, the bank rate remained stable, at
0.5%, from April to December 2009.
Figure 9: Average Monthly Bank Interest Rates, 2008-2009
e
s
5
R
t
°h
4
a
e (
)
3
2
1
0
M onthlYear
t Bank Rate -~- 1 Yea r Mo rtgage ---^.~-- _ 3 Year Mortgage x_ 5 Year Mortgage
In spring. 2009, Canada Mortgage and Housing Corporation (CMHC)
reported that "mortgage rates are expected to be relatively stable
throughout 2009, remaining within 25-75 basis points of their current
levels," » which can be seen in Figure 9. The 2010 CMHC base case
scenario reports that "mortgage rates are expected to gradually rise over
the course of 2010 and 2011, but will remain very low in a historical
context"'$.
The number of housing starts was 2,017 in Durham Region for 2009, which
was down 35% from 3,085 in 2008. The number of housing completions
was also down 35% from 3,827 in 2008 to 2,505 in 2009. Similarly, housing
absorptions decreased 33% from 3,784 in 2008 to 2,551 in 200919 (Figure 10
next page).
,e Bank of Canada, Canadian Interest Rates and Monetary Policy Variables, 2008-2009.
~~ Canada Mortgage and Housing Corporation, Housing Market Outlook -Greater Toronto Area,
Spring 2009.
18 Canada Mortgage and Housing Corporation, Housing Market Outlook -Canadian Edition,
Spring 2010.
iv Canada Mortgage and Housing Corporation, Housing Now -Greater Toronto Area, January
2010.
_ _
_ . -,r
._
"
~:
<, '' ...,
21108 2009
Page ~ 10
Figure 10: Housing Starts, Completions and Absorptions in Durham Region 2008-2009
5000
4000 ___- 3827 3784
3D85
3000 ----- 2551
Units 2017
2000 - ~ ~
1000
0
Starts Corcpletions Absorptions
2008 ®2009
The average price of new completed and absorbed single detached
dwellings in Durham Region remained stable, dropping only slightly from
$399,285 in 2008 to $396,274 in 2009. In Clarington, prices also remained
stable, only decreasing from $339,840 in 2008 to $337,257 in 200920 (Figure
1 1). Clarington continues to be an affordable place to live within Durham
Region and the Greater Toronto Area.
Figure 11: Housing Prices for Single Detached Homes, 2008-2009
$soo
oo0 00
,
$soo
,
$aao
,
$ $300,
$200
,
$100
,
Although the number of residential building permits issued annually has
declined over the last few years, the average price of single detached
dwellings in Clarington has continued to increase at a steady pace from
2004 to 2008, with a decrease of less than 1% experienced in 2009 (Figure
12 next page).
20 Canada Mortgage and Housing Corporation, Housing Now -Greater Toronto Area, January
2010.
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Municipality of Clarington Durham Region Greater Toronto Area
^2008'
®2009 $339,840.00 $399,258.00
$337,257.00 $396,274.00 o
0
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$521,760.00
$563,802.00
Page ~ 11
Figure 72: Average Value of Single Detached Dwellings versus Number of New
Residential Units Approved, 2004-2009
00 1200
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2004 2005 2006 2007 2008 2009
-~-Average Single Detached Dwelling Price -~ New Residential Units Approvedl
3.6 SHORT-TERM POPULATION FORECAST
The 2010 Development Charges Background Study estimated the
Municipality of Clarington's population for 2009 to be 86,10321 and the
total number of households to be 28,85022. Durham Region estimated its
population to be 621,120 and the total number of households to be
210,21623. The estimation of population for Durham may be 15,000 to
25,000 persons higher than the actual population when compared to the
2006 census projections and growth rates for the Region.
Clarington's estimate had 2.87 people per household24, while the Statistics
Canada 2006 census results show that Clarington had 2.9 people per
household25. This statistic matches the trends predicted by Clarington's
2010 Development Charges Background Study. Census data shows that
household sizes are decreasing in Clarington, which is a reflection of the
older population attracted to the area. However, the decrease in
household size has not occurred as predicted by the 2005 Development
Charges Background Study.
21 Population forecasts include census undercount.
22 Hemson Consulting ltd., Development Charges Background Study, April 2010.
zs Growing Durham, Annotated Consolidation of Regional Official Plan Amendment Number
128, June 3, 2009.
24 Hemson Consulting Ltd., Development Charges Background Study, April 2010.
zs Statistics Canada, www.statcan.ca Clarington Community Profile, 2006.
Page ~ 12
The Growing Durham Annotated Consolidation. of Regional Official Plan
Amendment Number 128 indicates that Durham's population is expected
to reach approximately 632,560 by the end of 2010 and 643,980 by the
end of 201126, which represents a growth rate of 1.77% annually. For the
same period, the 2010 Development Charges Background Study indicates
that Clarington's population is expected to grow to approximately 87,899
by the end of 2010 and reach 89,731 by the end of 201 127. This represents
a growth rate of 2.0~ annually.
Durham Region is expected to have approximately 215,408 households by
the end of 2010 and 220,600 by the end of 201128. The number of
households in Clarington is expected to grow to approximately 29,532 bye
end of 2010 and 30,231 by the end of 201 129, as shown. in Table 4.
Table 4: Short-Term Population 8 Household Estimates for Clarington and Durham Region,
2009-2011
` 86,103 621,120 13.86% 28,850 210,216 L3.72%
~' ~ 87,899 632,560 13.90% 29,532 215,408.. 13.71%
_„ „ 89;731. 643,980 13.93% 30,231 220,600 13.70%
sa Growing Durham, Annotated Consolidation of Regional Official Plan Amendment Number
128, June 3, 2009.
27 Hemson Consulting Ltd., Development Charges Background Study, April 2010.
28 Growing Durham, Annotated Consolidation of Regional Official Plan Amendment Number
128, June 3, 2009.
z9 Hemson Consulting ltd., Development Charges Background Study, April 2010.
Page ~ 13
4.0 NON-RESIDENTIAL GROWTH
4.1 TOTAL NON-RESIDENTIAL BUILDING PERMIT VALUE IN CLARINGTON
The value of non-residential building permits issued in Clarington during
2009 was $51.57 million, an increase of 16% from 2008 when the value of
building permits issued in Clarington topped $44.45 million. This overall rise
in the non-residential building permit value in 2009 was due to a 316
increase in the value of commercial building permits issued and a
significant increase (2030 in building permit value in the institutional
category30. The decrease in the value of industrial building permits was
substantial, down 97% from 2008, but was offset by the increase in value of
the commercial and institutional categories (Figure 13). In 2009, the value.
of agricultural building permits issued by the Municipality of Clarington
was up about 17~ over the 2008 value.
Figure 13: Non-Residential Building Permit Value in Clarington, 2005-2009
000
00
$30
000
.
,
,
$25
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00
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Industrial Government Commercial Institutbnal AgricuRural
Type
it ~ 2008 ®2009 ~~'
The following list highlights the major non-residential building projects
reported in 2009:
• Tech Shop building and addition to St. Stephen's Secondary School,
Bowmanville ($13.7 million)
• Lange's Photo and Bethesda House, Bowmanville ($677,447)
• Algoma Orchards addition to apple packing plant, Clarke
($900,000)
• Shoeless Joe's restauranf, Courtice ($1.7 million)
• Wal-Mart, Bowmanville ($23.3 million)
• Witzke Greenhouses expansion, Courtice ($2.8 million)
• Staples and The Beer Store, Bowmanville ($625,000)
so Municipality of Clarington, Engineering Services Department, January 2010.
i
--
Page ~ 14
4.2 SHARE OP NON-RESIDENTIAL BUILDING PERMIT VALUE IN DURHAM
A rise in the non-residential building permit value for Clarington in 2009
increased the Municipality's share of the total non-residential building
permit value within Durham Region from 7.8% in 2008 to 11.3% in 2009
(Figure 14). Clarington had the most significant change year over year
within Durham Region. Oshawa, Pickering and Scugog experienced the
most significant decreases in share from 2008 to 2009, down 2.5%, 1.5~
and 1.9%, respectively, while Ajax made significant gains, up 2.3% in share
for the last calendar year. Uxbridge had a slight increase in share while
Brock and Whitby remained relatively neutral3i,3z.
Figure 14: Share of Total Non-Residential Building Permit Value in Durham Region, 2009
4.3 NON-RESIDENTIAL FLOOR SPACE PRODUCTION IN CLARINGTON
Clarington's production of non-residential floor space increased 73.2% or
156,400 square feet from 213,700 square feet being added in 2008 to
370,100 square feet being added in 2009. This returned Clarington to the
level of production seen in 2007 which was followed by a sharp decline in
2008.-0f the municipalities in Durham Region, Clarington made the only
increase in non-residential floor space production from the previous year.
Uxbridge remained relatively unchanged from 2008 to 2009 while Ajax
(-24.7%), Brock (-68.0%), Oshawa (-19.50, Pickering (-42.80, Scugog
(-45.1%) and Whitby (-16.2%) experienced significant decreases in non-
residential floor space production for 200933.
31 Municipality of Clarington, Engineering Services Department, January 2010.
sz Durham Region Planning Department, Annual Building Permit Activity Review, March 2010.
3a Durham Region Planning Department, Annual Building Permit Activity Review, March 2010.
Page ~ 15
5.0 SYNOPSIS AND SHORT-TERM OUTLOOK
5.1 RESIDENTIAL BUILDING PERMIT ACTIVITY
Overall, the pace of new residential building permit activity in the
Municipality of Clarington decreased by 53.96% from 2008 to 2009, while
the value decreased by 45.89%. Durham Region experienced a decrease
of 17.96% in residential building permit value for 2009. Clarington's share
of residential building permit activity within Durham Region for 2009
decreased (-6.9%) to only 13.3% of the value for permits issued throughout
the Region since 2008. The Municipality brought in the fourth greatest
residential building permit value in the Region behind Whitby (19.1%),
Oshawa (23.5%) and Ajax (34.2%).
CHMC is forecasting that 2010 will see a strong improvement in housing
starts for both single detached and multi-family dwellings as the economy
recovers from the downturn of 2009. Nationally, single detached starts will
increase from 75,659 units in 2009 to 86,450 units in 2010, with a slight
decrease in 2011 to 85,850 units. This will be complemented by
approximately 84,800 multiple unit starts in 2010, "increasing to 89,300 units
in 2011 as stronger economic activity and employment support housing
demand" 34. However, CMHC also projects that "measures recently
announced for government-backed mortgage insurance will moderate
housing starts activity. Some potential buyers will have to save a larger
down payment to offset higher qualifying mortgage rates and thus
postpone their purchase of new housing" ae
These housing start projections, however, are national in scope and due
to the implementation of the provincial Growth Plan (2006) may not be
reflective of Clarington's future residential building permit activity. As
Clarington brings its Official Plan into conformity with provincial policy,
intensification will increase, thereby resulting in a rise in share of multi-
family dwelling starts and a decrease in share of single detached dwelling
starts.
S.Z NON-RESIDENTIAL BUILDING PERMIT ACTIVITY
Overall, the non-residential building permit activity in Clarington has
decreased by 10.1% in 2009, while the value increased by 16.0%. Durham
Region experienced a decrease of 19.6% in non-residential building
permit value for 2009. The Municipality of Clarington was virtually tied with
Pickering for the position of fourth largest share (11.3%) of non-residential
34 CMHC, Housing Market Outlook, Canadian Highlights -First Quarter 2010.
ss CMHC, Housing Market Outlook, Canadian Highlights -First Quarter 2010.
Page ( 16
building permit value within Durham Region. The value of non-residential
building permits in Durham for 2009 at $458.2 million was similar to the
values realized throughout the mid-2000's.
In Ontario and across the country, investment in non-residential building
permit activity was. down slightly in 2009. This downward trend continued
for the first quarter of 2010. Institutignal projects continue to grow in value,
however the country has continued to see a sharp decline in commercial
building investment36. In contrast, Clarington saw tremendous commercial
building value growth in 2009. The Royal Bank of Canada states that the
fourth quarter of 2009 saw more growth than originally expected and
prospects for 2010 have brightened. Most advanced economies and
some emerging economies around the world are expected to grow
moderately throughout 2010 and into 201 137.
A number of major infrastructure projects are anticipated in Clarington
over the coming years. that will enhance Clarington's non-residential
building permit values:
• OPG New Build, new office and training complex, refurbishment of
Darlington reactors and facilities
• GO Rail extension to Bowmanville (construction of stations)
• Durham/York Energy from Waste Facility
• Highway 407 (construction of maintenance facilities)
These projects will stimulate the local economy and support other non-
residential and residential development.
s6 Statistics Canada, The Daily www.statscan.ac.ca
37 RBC Economics & Financial Market Outlook, March, 201 D,
www. rbc.com/economics/market/pdf/fcst. pdf
Page ~ 17