Guiseppe Strazzeri is expecting housing activity to moderate from recent strong levels.
This is in line with weaker economic activity in 2009 and 2010.
Although a lower Canadian dollar and reduced costs due to a decline in energy prices should help exporters, dampened global demand for commodities and soft commodity prices will hamper economic growth.
Lower energy prices may also help curb a potential decline in consumer spending. However, without higher energy prices, new investment in the energy sector may be negatively affected.
Reduced non-residential construction activity in New Brunswick is expected in 2009-2010. Several current projects, including the LNG terminal project, the refurbishment of the Point Lepreau generating station in the Saint John area, as well as the expansion of the Potash Corp. facility in Sussex will slow as peak levels of activity have been reached.
The possible addition of a new oil refinery to the Saint John area would help position the region as the energy hub for Atlantic Canada. However, no formal decision is expected until late 2009 at the earliest.
Accordingly, employment and economic growth are expected to remain weak in both 2009 and 2010.

In Detail

Single Starts: Single starts in New Brunswick maintained a steady pace in 2008 as strong employment and positive in-migration continued to support demand. Nevertheless, slowing activity in the latter part of 2008 is forecast to continue into 2009. Expect a decline in single starts to 2,250 units in 2009, followed by a subsequent increase to 2,350 units in 2010.

Multiple Starts: In recent years, multiple starts have undergone a shift in their product mix as the focus of local builders changed to reflect consumer demand. Despite a yearover- year increase in multiple starts in New Brunswick’s three large urban centres, fewer apartment starts were recorded in 2008. Conversely, semidetached units, which continued their tremendous growth in Greater Moncton, were complemented by large gains in Saint John last year.
Although the vacancy rate dropped in the province’s large urban centres, apartment starts are expected to be soft in 2009. Expect a moderate decline in multiple starts to 1,225 units in 2009, followed by a mild rebound in 2010 to 1,300 units.

Resales: Favourable market conditions helped offset the impact of economic uncertainty and bolstered the resale market in 2008, despite the mild decline in MLS® sales from the previous year’s record setting levels. With increasing economic uncertainty, expect MLS® sales to decline to 6,500 in 2009 with a slight increase to 6,750 in 2010.

Prices: Although sales activity is expected to slow in 2009, prices will continue to rise, albeit at a reduced rate. Expect the average sale price to rise to about $146,500 in 2009 and $149,000 in 2010.