Thursday, December 27, 2012

2012 construction year in review for the Collingwod, Blue Mountains, Creemore and Wasaga beach area

Review of residential construction in the Collingwood, Blue Mountains, Creemore and surrounding area for 2012

2012 was a disappointing year for the construction industry in this area of Ontario. But this area wasn’t the only part of Ontario that had a disappointing year, there were a lot of places in Ontario that had almost no new housing starts and no new work coming in the future. Ontario single handily pulled the national construction rate down to its lowest level since the crash of 08. Almost every other province showed growth in the construction industry.

Collingwood/Blue Mountains

The Collingwood/Blue Mountains area which seemed to buck this trend in previous years has come back to the pack and saw construction slow. A lot of builders were able to stay busy but were not able to accumulate any backlog of work into the future and the volume of work they did was less than in previous years with many builders shedding employees.

The Collingwood/Blue Mountain market has been flooded with “custom builders” as they call themselves over the last 3 or 4 years. The construction market was not strong enough to feed all the builders that have setup shop in the area. Many want-to-be big home builders found themselves without any work. A lot of start up builders have been forced to sub themselves out to builders with better reputations and sustainable amount of work.

The home builders with good reputations and track records of quality and fine workmanship stayed busy but found that there weren’t as many jobs to price as previous years.

New home building which has seemed to carry the market in previous years was down significantly. The renovation market which was also flooded with company’s looking for work carried the load this year with a lot of people turning toward remodeling their current home or repairing existing problems with it.  Additions which seemed to be at an all time low seem to be making a slow come back. The sluggish real estate market has slowed construction because of the low turnover of property as well.

The Collingwood area seemed to have a reel spike in commercial redevelopment with many new projects, a lot of them started last year and were still being working on this year.

Creemore/Clearview Township

The large increase in development fees and building permit fees has had a large effect on the market in the Clearview township area for the last couple of years. Clearview Township has created a have and have not society with their massive increase in the cost of building permits and development fees. It has come to the point where only larger homes are being built in that township because smaller homes have become too expensive for the average person to build. Only the wealthy are now able to build a home in the Clearview township area. This of course means that residential construction has almost come to a halt. Very little residential construction was started or completed in the Clearview township area in 2012. Most of the work in the area took place in the Collingwood area and into the Wasaga Beach area. The renovation market though in the Clearview area did see an uptake with people opting to buy older homes and renovate them instead of paying the large development fees. But even this market is having trouble finding traction with the tighter building codes that were introduced at the start of the 2012 year.

Wasaga Beach

Wasaga Beach seemed to have a healthy construction year, with many older cottages being either torn down for new homes or older cottages being completely renovated from top to bottom because of lot restrictions. Construction can be found on almost every street in the Wasaga Beach area, the closer to the water the more work there seems to be happening. Also the projects are larger and more expensive because of the value of the property near the water is so high. Wasaga beach seems to be the place that is leading construction in new homes and renovations. This has a lot to do with the reduced prices of older homes and the lower development fees compared to the surrounding areas.

Almost all work was done in all areas for clients from the range of 50 to 70 years old. This is a trend that has existed for the last decade and looks to continue into the future.

With the delay of winter conditions this year it seems to have given the construction industry an extra shot in the arm. Less people seemed to be laid off at Christmas time this year compared to previous ones in the construction sector. A lot of home builders took the opportunity to get a start on new homes and get the majority of their framing completed before the winter weather. But building departments across the region are reporting lower then expected numbers of applications for new projects at the end of the year.

Overall it seemed that the year of 2012 was a down year for a lot of builders and renovators. It seemed to depend on market reputation, with the leaders in the industry staying busy and the rest fighting over what was left over. This year really separated the builders who run a well maintained company and the "builders" that run their company on a whim. 2012 was a slower year than the 2011 one, which breaks the trend of steady growth year over year that has been happening since the 2008 credit crunch, 2008 saw the construction market almost completely dry up.

Rob Abbott
Operations Manager
Village Builders Inc.

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