Monday, December 30, 2013

2013 year in review of the residential construction in the Collingwood, Town of Blue Mountains, Clearview/Creemore, Wasaga Beach and Mulmur townships

2013 review of the residential construction in the Collingwood, Town of Blue Mountains, 

Clearview/Creemore, Wasaga Beach and Mulmur townships

2013 was a far better year in most areas for residential construction then the previous one.
There was growth seen in many areas from new home starts to renovations, but the flow of them was sporadic throughout the year.

There seems to be a trend that has developed over the last several years of homeowners being tire kickers on new homes, additions and renovations but never actually doing the job. A lot of homeowners are even going so far as to paying for plans and then failing to pull the trigger on the job for one reason or another.
Homeowners in general seem to be having a harder time understanding the price of things and end up shocked when they see quotes, so shocked that they don’t even bother to do the project.

There seems to be a disturbing trend of the application for building permits taking longer and longer to obtain. The delay isn’t just from the municipal building departments it is also from overseeing boards such as the Niagara Escarpment Commission (NEC) and landowners that object to anything changing in their neighbourhood. More often than not projects are delayed for no other reason than a neighbour that does not understand what is to be built there, thinking a sub-division is to be built when it is only a single home.

This year was the first year of the new building codes being implemented with higher R value of insulation and you needing an overall plan for your home that tells you how it performs. The overall effect is that it makes homes more expensive to build.

Collingwood

The town of Collingwood has seen a lot of change in the past couple of years. They have had a lot of commercial development and some residential sub-division starts. Overall when it comes to new homes being built Collingwood is not putting up a lot of custom homes, there is a lack of space and most residential jobs being completed are renovations. There seems to be a lot of renovations in Collingwood as Collingwood has an abundance of older homes and a surprisingly hot real estate market this past year. You seem to be able to find houses being renovated on every street in the town of Collingwood this year, this because an aging population continues to move to the Collingwood area looking for homes and having the money to spend on fixing them up.

Where Collingwood has stumbled is in the multi-unit developments this year, several projects where either delayed or abandoned because of indecision by the Town of Collingwood on what they would grant a permit for.

Collingwood has spent a lot of money in infrastructure to attend to the needs of a growing and aging population. That should help the future of Collingwood as it continues to become a retirement community for people leaving Toronto in their later years.

Town of the Blue Mountains

In previous years the town of the Blue Mountains has had a real slow down of custom homes being built, this year wasn’t by any stretch of the imagination the best but it was certainly better than previous years. The town of Blue Mountains had a slow start to the year but had a strong 2nd and 3rd quarter of the year to end with a better year than the previous years in the amount of permits issued and the total dollar amounts they were worth.

Some of the larger custom homes developments in the town of the Blue Mountains have had a lot of trouble gaining any traction since the 2008 crash, but this year seemed to show some genuine signs of life with a lot of the developments getting new homes built or started in 2013. It’s a good sign because the town of the Blue Mountains has an abundance of lots and land that can be developed. Most of the land is slated for single family home construction and a lot of the developments are set up so that the homeowner buys the lot and then goes out and finds their builder.

The real estate market seems to be really heating up with a lot of supply early in the year and then a rush of selling in the second half. This is good for the construction industry; new homeowners usually want to renovate and or add an addition to their new purchases and with the sale of vacant land comes the opportunity for custom homes to be built.

The building department did inform me that the permit applications coming in were surprisingly slow for the end of the year, but that might be because of the early winter that has arrived and could be putting a damper on a lot of projects.

Wasaga Beach

Wasaga Beach has by far one of the strongest construction economies right now; this is a trend that has sustained itself for several years. You can find residential and commercial development in every area of the town of Wasaga Beach.

How is this possible? There are a lot of factors that go into this, the permit and development fees are lower in the Wasaga Beach then in a lot of the surrounding townships. Wasaga Beach seems to have made it a priority to attract permanent residents and it seems to be going away from the beach tourism community that it has been for most of the last century. With an abundance of older homes in prime locations people are buying regularly and tearing them down to build a new home to retire into. Once you are away from the beach front property taxes in the town of Wasaga Beach are very reasonable compared to its surrounding municipalities.

There is also still sub-division development going on in Wasaga Beach, this allows people to get into the market at a lower price point and still end up with a fairly new home. This can’t be said for many other municipalities around them. A lot of the people that actually work for Village Builders live in Wasaga Beach because it is one of the few places that they can afford to live and still are able to drive to work.

 Mulmur Township

This is the first year that I am reviewing Mulmur Township; Mulmur is on the south side of Clearview Township and has caught our attention because of the amount of growth and property turnover in the area. We have always serviced the Mulmur area but the work has always been fairly slow and inconsistent.

The Northern side of Mulmur Township has seen a lot of change over the years and this year was no different. With a strong real estate market moving a lot of land, people are coming up to Mulmur to Build or renovate country homes.

Mulmur is one of the few places left where you can still buy large tracks of land if you want privacy or horse farms without having to spend a small fortune. The proximity to Toronto is very enticing for people looking for a second home in the country. Caledon has become so expensive that a lot of people have realized that driving a little farther north can get you a whole lot more bang for your buck. Large custom homes are starting to appear in Mulmur on every side road and with the abundance of farm land so are horse farms.
Construction in Mulmur seems to have gotten better because of all this with more jobs to be found then previous years in new home construction and older homes being renovated and converted.

Clearview Township/Creemore

I’ve left this area for last because it is actually the area that Village Builders is based out of and so I have the most experience in its workings. I could go on and on about this Townships and their building and development plans or lack thereof!

I plan to write a separate article just on this area later but for now I will just give you the facts that you need to know.

Clearview Township as I have said in previous years has successfully created a have and have not community. With the high building/development fees and also high taxes they have driven out most of the middle class in the area. What is left are people that have the resources to stay. This means that the only building that happened this year in Clearview was the building of high end custom homes. The renovation market in the township is very poor, it is very poor when you understand the amount of older homes that already exist in the township and should require remediation.

Heavy restrictions and confusing building rules have successfully stopped a lot of building whether it is commercial, industrial or residential in the township. Almost all commercial development has happened on existing buildings, this allows people not to fight with the township on zoning, parking and infrastructure and still keeps their business functioning.

It has become so obstructive that Clearview actually has a negative growth rate in an area that has nothing but positive growth all around it.

THE YEAR OVERALL

Overall for the year in this area when you consider all its townships and municipalities the construction industry in a whole saw very little growth compared to the previous years. More new custom homes where started but a complete drop-off of the renovation market was surprising for everyone, especially when you look at how strong the real estate market as a whole has been in the second half of this year.

A lot of municipalities that were hoping that the building departments would bring in large profits for the growing budgets of the municipalities where disappointed. Even with the increasingly higher fees being charged it isn’t helping, in fact the higher fees are probably hurting more than anything.

With ever increasing safety rules, government regulation, higher taxes on workers, businesses and the work you do the underground economy is growing faster than any of us would like it too. The cost of doing business in the province of Ontario especially in construction is getting to the point where the average person can’t afford the services and is almost being forced to turn to the underground economy. When this happens nobody wins. Homeowners end up with bad workmanship, no warranty and the government loses out on much needed tax revenue. If something doesn’t change in this province I shudder to think what this industry will look like in 5 years.

Rob Abbott
Operations Manager
Village Builders Inc.

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