St. John’s councillor concerned about effect of high home values
The year-end economic report for the City of St. John’s is a positive one, says the municipal chairman of economic development, but affordable housing continues to be a challenge.
With 2013 winding to a close, Coun. Bruce Tilley, co-chairman of the city’s economic development, tourism and public engagement committee, said several factors added up to a strong local economy this year, including:
— 5.9 per cent unemployment as of November, smaller than the the national rate of 6.9 per cent;
— seasonally adjusted retail sales in September hitting $716 million, up 3.1 per cent over the same month last year;
— economic growth forecast, when all the data are in, to hit five per cent in 2013, rebounding from a 3.2 per cent decline last year.
“We are going in the right direction with respect to economic activity, and of course this is boosted by the increased activity in the offshore,” said Tilley on Friday.
“The good thing about it is that we’re working with developers that we need.”
Tilley noted there are several condo, apartment and hotel developments underway, as well as the expansion of the city’s convention centre.
Tilley said the economic activity is lifting housing prices — the average cost of a house is estimated by the RE/MAX Housing Market Outlook to hit $302,500 by year’s end, up 5.9 per cent over 2012. Next year, RE/MAX forecasts the average house price to rise another five per cent, to $317,600.
But he admitted that high home values for some means unaffordable housing for others, with rising rents and bigger mortgages putting home ownership out of reach for many.
“We’re very concerned about housing,” said Tilley, who said the city will be adding 43 new affordable housing units in 2014.
“The other thing that’s coming down the tube, and I hope it’s coming in 2014, we’ve been hearing a lot about it lately, is that the feds are going to look at their money and see if they can put forward some more money tied into affordable housing, and all that’s part and parcel of where we should be going.”
Tourism in St. John’s was also strong, said Tilley, with average occupancy rate for the first nine months of the year at 75.8 per cent, up from 72.4 per cent in 2012, and airline passenger traffic up 2.4 per cent during the same time.