2017 permits outpace high set in 2002
It’s been a very good year for new home construction in Prince Edward County as more permits have been issued than any year in memory.
Community development co-ordinator Neil Carbone shared that statistic with the members County’s community and economic development commission Monday as he offered a draft presentation of the body’s year-end report.
“We’ve had a historical number of new home building permits,” Carbone said, adding that after the market bottomed out in 2012, new construction has been on a five-year upswing. To date, 177 permits have been issued, up from 127 all year in 2016 — an increase of 40 per cent. The number also beats the previous high of 157, set in 2002.
Carbone said the County has also had been on a strong pace with its overall tally for building permits. The year-to-date tally is 1,053, up from 944 in 2016. The value of those permits has also increased from $83 million to $121 million, an increase of 46 per cent.
Commissioner Bill Roberts was concerned, however, that many of those permits might be focused in the wrong areas.
“Does the overall building permit picture also include renovation and rehabilitation permits?” he asked, noting his concern was about seasonal properties. “If a lot of this building permit activity is connected with Airbnb, that has a negative in that it doesn’t build community and put kids in our schools. It looks impressive, but is it covering other phenomena up?”
Carbone indicated that while it is likely that type of construction is occurring, he’s not particularly concerned because of the spike in new homes this year.
“If you didn’t see new homes increasing as dramatically as they are, if that was only at 12 per cent, there’d be cause for concern,” he said. “The highest value permits are in new home construction, so I’d suggest there’s not as much cause for concern about all this growth resulting in Airbnb-type renovations Most new homes are not of the Airbnb variety.”
Carbone said he’s sure there is some work being done to prepare buildings as vacation rentals, but added even that work has benefit to the municipality in the form of assessment growth the next time the Municipal Property Assessment Corporation visits.
“That means more dollars in municipal coffers to invest in services and supports. It also means more people are employed in construction trades and in other areas in the county.”
Carbone also received a question regarding whether the development is primarily the result of recent subdivisions or standalone development as well. He indicated staff could plot permits using GIS technology in hopes of providing that picture.
Carbone also offered an overview of real estate activities in Prince Edward County over the past year. That picture hasn’t been quite as rosy.
“We know we’ve been on a bit of a tear for the last year-and-a-half, but with the downturn in the GTA we’ve seen that reflected in the county,” he said. “Whereas in July and August, even into September, the mean price was around $405,000 that has dropped dramatically recently to what was a little more typical, around $250,000.
He said for the entire year, sales of homes above the $300,000 threshold were well above those under $300,000 but the fall has seen the paces level out some.
Carbone indicated that could be a function of inventory of homes on the market.
“Part of that is what’s available on the market at the time of year. I think in the real big spike around April or May, 40 per cent of homes were selling over asking,” he said, noting that in 2017 there was a lower inventory of homes compared to 2016 up until July and August. This fall, there’s more inventory and that has affected pricing.
In comparison to the GTA market, Carbone said the numbers in the county didn’t mirror those experienced in Toronto as the dip in that market started around May, but the county market followed later, which was not surprising.
“There’s a strong correlation over time of the county’s market increasing relative to the GTA and seeing drops as well,” Carbone pointed out.
Despite the spike compared to the crazy spring, Carbone said the county’s real estate market is still trending somewhat above its 2014-2016 averages. The percentage of homes selling above listing price was higher than in 2016 from January straight through until September with a high coming in May with 40-45 per cent of homes at or above list price. In October, that number was running between 10-20 per cent.
While inventory has gone up a bit, it’s still relatively low.
Commissioner Lynn Sullivan asked whether County staff had done any comparisons with other Ontario markets to see how the municipality is faring.
Carbone said they hadn’t, but indicated maybe they could select a few benchmark communities like the Kawartha or Muskoka regions to see if their trends are similar currently.
The commission’s vice-chair Gil Leclerc said he’d also like to see comparisons to some neighbouring communities like Quinte West, Belleville, Napanee, and Kingston to see if they are experiencing similar trends.