Council backs residential development as local real estate industry sees fewest new July listings in 35 years

North Bay City Council recently granted its final approval for eight new lots in a subdivision on Larocque Road and the City of North Bay has entered into a pre-servicing agreement for 19 more on Kenreta Drive, also with council approval.

Council will address a third housing-related matter during its September 7 regular meeting when it votes on removing the holding zone designation from a property on Sugarbush Drive that would allow that development to expand.

The housing inventory is needed, as high demand, lower supply, and favourable interest rates have sent real estate prices skyrocketing.

In its July market report, the North Bay Real Estate Board (NBREB) reveals the number of new local real estate listings dropped by 31.8 per cent from July 2020 while the average price of a residential home in the area has risen from below $200,000 in late 2014 to in excess of $400,000 this past spring (see chart above).

The average price of homes sold this July was $388,073, an increase of 17.7 per cent from July 2020. According to industry figures, the more comprehensive year-to-date average price was $390,571, up 34.7 per cent over the same first seven-month period in 2020.

Despite the local sale of a record 997 units in the first seven months of this year — a rise of 34.2 per cent over the same period in 2020 — home sales were 9.3 per cent below the five-year average and 3.4 per cent below the 10-year average in the month of July.

The 138 local units sold in July is a decrease of 30.7 per cent from the record levels seen in July 2020, adds the NBREB. And, with just 137 new residential listings in July, the board confirms it is the lowest number of new listings added in the month of July in 35 years.

There were 111 active residential listings on the market at the end of July, a decline of 44.8 per cent from the end of July 2020. Like new listings, active July listings had not dipped to this level in more than three decades. Active listings were 71.2 per cent below the five-year average and 82.4 per cent below the 10-year average for the month of July.

The North Bay Real Estate Board represents 155 realtors and 21 member offices. Its territory includes Mattawa to the east, Verner to the west, south to Sundridge, and north to Temagami. 

The approved Mantha Subdivision development, to be located north of the Education Centre and Cedar Heights Road, will consist of eight lots and two blocks on Larocque Road.

The development at the end of Kenreta Drive, nestled in the Airport Hill escarpment, will proceed with servicing for a total of 19 lots. The draft plan of subdivision was originally approved by City Council on October 20, 1997. 

Both files were approved unanimously. Mayor Al McDonald declared conflicts of interest with both as he owns property nearby the developments.

The associated staff reports advise the objectives of the Planning & Building Department are to facilitate the development of housing options to service the needs of the community and promote and support public and private sector investment.

See related: In a pandemic year, north's property value grows by hundreds of millions

Council has been consistently supportive of development in North Bay as it tries to grow the municipal tax base — especially throughout the pandemic — by enticing big-market professionals to eschew the GTA commute and higher real estate prices and "move on up," to the area.

In 2019, Council supported a three-year moratorium on residential development charges.

"The one thing we are not competitive on when it comes to building — is homes. And that is what we are targeting. We want to see homebuilders build family homes for our citizens," McDonald said then.

"The demand is high," and even extends into 2022, said Coun. Dave Mendicino in March with Council poised to green-light several developments.

 "The developer wanted to get these lots on the market as quickly as possible — kudos to staff for facilitating. Overall we're hearing from developers this is going to be an extremely busy year from a residential development standpoint." 

Coun. Bill Vrebosch noted then a local contractor had told him he "can't build them fast enough," to keep up with the demand.

NBREB President Sue Symons tells BayToday the board is supportive of Council's moves to increase inventory but a wider variety of housing options would be helpful, especially as home buyers enter the market for the first time.

Meanwhile, the Canadian Real Estate Association (CREA), from which the NBREB draws the statistics for its market reports says Canadian home sales are continuing to normalize in July.

While the industry chatters about the real estate boom and the potential burst of the bubble, the actual number of transactions nationally this July was down 15.2 per cent on a year-over-year basis from 2020's record July, yet this year's sales still marked the second-best month of July on record.

Shaun Cathcart, CREA’s senior economist is not surprised by the slowing market over the past few months, writes "the level of activity we were seeing back in March was unsustainable."

Cathcart adds, "We are not returning to normal, we are only returning to where we were before COVID, which was a far cry from normal. The problem of high housing demand amid low supply has not gone anywhere — it’s arguably worse. And after years of everyone agreeing that medium-density housing was the future, we are still referring to it as the 'missing middle.'"