Sudbury home prices going up but only slightly

The Canadian Mortgage and Housing Corporation is predicting home prices in Sudbury are only going up an average of $1,000 in the next year.

Currently, the average home price sits at $250,000.

The executive director of the Sudbury and District Homebuilders Association said there are a lot of engines driving the housing market, but adds its the major mining projects that influence the housing market.

An example would be Cliffs Natural Resources building a smelter in Capreol.

I think youll see people in a better frame of mind [for buying], Laura Higgs said.

They have perhaps more confidence in the future. So if that happens, we will see some of that growth that weve all been talking about for about four or five years now.

The head of the Sudbury Real Estate Board said major mining projects do play a role in Sudburys housing market, but addedproposed projects such as Cliffs dont have the influence they once did ondemand and supply.

Mining definitely used to play a big role, not so much anymore, Carl Young said.The diversity of the city has definitely helped.

An analyst with the CMHC points to a diverse economy affecting the housing sector.

The positive thing about Sudburys economy is the strength of the services sector now gaining strength, Jawad Amhad said.

Were seeing sectors like health, education, and finance, insurance, real estate, retail trade event theyre generating employment. So thats actually diversifying the local economy and not just on the mining industry.

Rental market is strong

When it comes to the rental market, the CMHC said the rental vacancy rate is only expected to rise slightly to 2.7 per cent in 2014, up from the current rate of 2.6 per cent.

Ahmad said there is no ideal number to aim for.

Some markets, they can have a higher vacancy rate but they are still considered a healthy market, he explained.

He added the construction of 100 new rental units now underway is good for the city.

For me, that means that the rental market is strong in Sudbury, he said.

The investors see that theres an opportunity that if they start a project in this slowdown period, they will be able to rent apartments quickly.

The new apartment building on Nesbitt Drive, complete with 107 units, is expected to be ready for tenants in 2014.