Nanaimo Quarterly Economic Update
Q1 2016

A look at the Nanaimo economic conditions,
January to March, 2016.
Author: Amrit Manhas, Economic Development Officer

Building Permits

Source: City of Nanaimo 

The City of Nanaimo issued 241 building permits valued at $53.97 million in the first quarter of 2016. The value of permits issued increased by 66% in the first quarter 2016 compared to first quarter 2015. In comparison to fourth quarter 2015 building permit values dropped by 14.88%.
 
55% of the building permit values in Q1 2016 were for residential construction.  35% of total building permit value was for commercial projects, followed by 6.36% for Industrial and 3.43% for public and less than 1% for miscellaneous. In Q1 2015, residential projects accounted for 92% of total building permit values followed by 5.7% for commercial units, 1.5% for Public and less than 1% for Industrial and miscellaneous combined.
 

 

Business Licenses

Source: City of Nanaimo

In the first quarter of 2016, 224 new businesses obtained a City of Nanaimo business license. This is a 26.6% increase from the same quarter in 2015.  It is a 36% increase from the fourth quarter in 2015.

Employment

(Source: Statistics Canada Labour force survey)

The number of people employed in Nanaimo was up by 1, 900 in March 2016 compared to January 2015 (March 2015 data unavailable due to small sample size).    Compared to fourth quarter 2015, 100 more people were employed, and the overall labour force increased by 200.  Nanaimo's unemployment rate was 6.8% on March 31st, Vancouver Island unemployment rate was 7.3%, BC 7.0% and Canada 7.6%. All geographies reported higher unemployment rates compared to one year ago. 

Nanaimo's participation rate was 57.0% compared to one year ago when it was reported at 58.6%.  Historically, Nanaimo's participation rate has been lower than both BC and Canada.  
  
In BC, the unemployment rate was up 0.6 percentage points compared to last year as labour force growth outpaced (+93,700) job creation (+72,000).    In March, there was employment growth in both the public sector (+4,600) and the private sector (+14, 700). The number of self-employed people decreased (-10,400). In March 2016, the unemployment rate in BC was 3rd lowest in Canada.

Residential Real Estate

(Source: Vancouver Island Real Estate Board; Canada Real Estate Association)

In March 2016, the average resale price of a single family home increased by 6% ($398,053) compared to March 2015 ($375,884). Homes listed decreased by 1% while units sold increased by 21%. Lots listed for sale were 23% below March 2015 levels and sales declined by -6%.  Prices for lots increased by 1% in the twelve month period between March 2015 and March 2016.  The number of Condo (apt) units listed for sale decreased by 14%, while sales increased by 29%, and the average price increased by 6%.  Patio style condo listings remained the same and units sold increased by 11%. Condo (townhouse) listings increased by 2%, and sales increased by 27% while average price decreased by -1%. 
Every category of residential real estate posted increases in sale volumes with the exception of lots posting a decline. Average prices over the twelve month period increased for lots, single family and condo style apartments but all other categories reported small declines. Listings dropped for Lots, Condo (apt), and single family home type of accommodation but increased for Condo (town) style units.  
(note: all statistics are an average of 12 months-to-date)

Housing Construction

(Source: Canada Mortgage and Housing Corporation, latest data available)
 
There were 151 housing starts in Nanaimo in the last quarter of 2015, which is a decrease of 31% from the same quarter in 2014. In the fourth quarter of 2015, 89 single-family homes were built, which is 6% below the same quarter in 2014.  Semi, and Apt type housing starts saw a significant decrease in the same quarter comparisons.  Row housing starts remained exactly the same.  

In 2015, 800 housing units were built, 375 were single family dwellings and 425 were multi-family dwellings. CMHC's latest housing forecast for Nanaimo predicts,  in 2016 single family housing construction will decrease by 6.7% to 350 units and multiple dwellings will decrease by 5.9% to 750 units.  Overall new housing construction in 2015 increased by 20.3% over 2014 levels.  The forecast for 2016 is 750 units, which will be a decrease of 6.3% over 2015 levels.  

Housing starts in BC are forecast to remain relatively stable. BC economy is forecast to expand in 2016 and 2017.   Projected population growth of just over one per cent is expected to add to demand for ownership and rental housing.  Sellers' resale market conditions are expected to prevail in most housing markets within BC, pointing to price gains.  Interest rates are expected to increase slightly towards the end of 2016


 

Rental Market

  • (Source: Canada Mortgage and Housing Corporation)
  • ** data suppressed to protect confidentiality or data not statistically reliable
Average rents increased in every category for both private apartments and row housing types. Vacancy rates increased for Bachelor type of accommodation but dropped for virtually every other category in Fall of 2015 compared to Fall of 2014.  Overall vacancy rates decreased by 2.4 percentage points for private apartment types, and by 1.4 percentage points for private row (townhouse) type.  The largest increase in average rent was for 2 bedroom apartment and row housing type.  The largest drop in vacancies was for 1 bedroom Private row townhouses (5.3 percentage points).

The number of total private row and apartment units available for rent increased from 3,742 to 3750.
(Source: Canada Mortgage and Housing Corporation)

The most recent Census (2011) indicated that 26% of Nanaimo residents rent the dwelling they live in, while 74% own their home. 
 
The rental vacancy rate for Nanaimo region has been declining steadily since spring of 2013 (8.3%) per graph above.  In the spring of 2015 the vacancy rate was 2.0%, while one year earlier the vacancy rate was 4.4%.  

Seniors' Housing

Demand for seniors' housing in British Columbia outpaced supply, pushing vacancy rates lower across all bedroom counts, all regions and all rent ranges.  In Nanaimo vacancy rates dropped in most categories with the exception of bachelor type accommodation (+ 1.1pp). Rents decreased in every category of Independent living spaces.

Independent living suites are found in seniors' complexes where the majority of the residents are aged 65 years or older, on-site meal services are provided, and the residents receive less than 1.5 hours of health care per day. In BC the overall average rent for an independent living space was $2,868 per month in 2015, up from $ 2,811 in 2014. In Nanaimo the rent decreased from $2,650 to $2,478 over the year.   Seniors' housing vacancy rate for Nanaimo region has been dropping significantly over the past five year's i.e.  18.2% in 2012 compared to 7.5% in 2015.

Tourism Indicators/Passenger Volumes

(Source: Nanaimo Airport)
 
76,985 passengers moved through the Nanaimo Airport in the first quarter of 2016.   This is an increase of 28% from the first quarter of 2015. Overall traffic through the Vancouver International Airport was up 8.7% in February 2016 compared to February 2015. Year-to-date passenger traffic through the Nanaimo airport in March was 27.54% higher in 2016 compared to one year ago. 

Note: March data for YVR not released at the time of this publication.

 
(Source: BC Ferries Corporation)
 
The amount of vehicle traffic between Departure Bay and Horshoe Bay increased by 7.25% (16,555 vehicles) in the first quarter of 2016, compared to the first quarter of 2015.  Passenger volumes also increased by 6.86% (43,584 passengers) on this route.  

Vehicle traffic between Tsawwassen and Duke Point increased by 8.19% (10,325 vehicles) in the first quarter of 2016, compared to first quarter in 2015.  Passenger volumes increased by 7.52% on this route (20,159 passengers).  Overall in 2015 BC Ferries passenger volumes increased by 3.42% and vehicle volumes increased by 4.45 over 2014 levles.  2016 is off to a much stronger start than 2015 for both passenger and vehicle volumes.
 
(Source: Chemistry Consulting Group, Vancouver Island Conference Centre, Tourism Nanaimo)
 
Average occupancy reported by the accommodation sector was 0.25% higher in March 2016 compared to March 2015.  Average daily room rates increased by $5.73 year-over-year during the month of March.  Revenue available per room increased by $4.11 in March of 2016.  

Year to date overall occupancy at the end of March was up by 2.38% in 2016 compared to 2015.  Nanaimo's room rate average increased by $3.61 in 2016, while overall revenue available per room increased by $4.6 due to both higher occupancy and higher room rates.

The number of visitors coming into Tourism Information centres to obtain information on the region increased by 43.82% in the first quarter of 2016 over first quarter 2015.  Year to date visitor volumes for 2016 are 43.82% above those of 2015.  The Vancouver Island Conference Centre reported 500 delegate days in March 2016 compared to 400 in March 2015.  Year to date delegate volumes for 2016 are 12.54% below those in 2015.