Nanaimo Quarterly Economic Update
Q2 2016

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

Building Permits

(Source: City of Nanaimo )

The City of Nanaimo issued 281 building permits valued at $54.1 million in the second quarter of 2016. The value of permits issued decreased by 4.1 percent in second quarter 2016 compared to second quarter 2015. In comparison to first quarter 2016 building permit values dropped by 1.9 percent.

82.1 percent of the building permit values in Q2 2016 were for residential construction. 13.4 percent of total building permit value was for commercial projects, followed by 2.6 percent for Industrial and 1.0 percent for public and less than 1 percent for miscellaneous. In Q2 2015, residential projects accounted for 85.1 percent of total building permit values followed by 6.6 percent for commercial units, 5.7 percent for Public, 2.3 percent for Industrial and less than 1 percent for miscellaneous.
 

 

Business Licenses

(Source: City of Nanaimo)

In the second quarter of 2016, 218 new businesses obtained a City of Nanaimo business license. This is a 15.3 percent increase from the same quarter in 2015.  It is a 2.7 percent decrease from the first quarter in 2016.

Employment

(Source: Statistics Canada Labour force survey)

There were 45,700 persons employed in Nanaimo in June of 2016, this is 9,000 more than in June 2015.   The main reason for this is the labour force participation rate, which increased to 57.1 percent in June 2016 compared with 47.3 percent one year prior.  As a result, there were 10,300 more people in the labour force in June 2016 and 9,000 of them found employment. Nanaimo's unemployment rate in June was 5.4 percent, Vancouver Island unemployment rate was 5.1 percent, BC 5.7 percent and Canada 6.9 percent. Nanaimo's unemployment rate was slightly higher than the Vancouver Island's average but lower than BC and Canada.

Historically, Nanaimo's participation rate has been lower than both BC and Canada.  June 2016 was no different when Nanaimo reported participation rate of 57.1 percent compared with Canada at 66.1 and BC at 64.5 percent. Typically areas with an older demographic tend to have lower participation rates. 
  
BC's 3 month moving average unemployment rate in June declined by 0.4 percentage points compared with one year prior.    Most of the job gains were concentrated in the private sector +13,400, followed by public sector +4000, while self-employment declined by 1,400 jobs. BC's unemployment rate was the lowest in Canada during the month of June. 

Residential Real Estate

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

In June 2016, the average resale price of a single family home increased by 9 percent ($418,634) compared to June 2015 ($385,436). Homes listed decreased by 3 percent while units sold increased by 19 percent. Lots listed for sale increased by 19 percent above June 2015 levels and sales declined by 3 percent.  Prices for lots remained virtually the same in the twelve month period between June 2016 and June 2015.  The number of Condo (apt) units listed for sale decreased by 5 percent, while sales increased by 46 percent, and the average price increased by 6 percent.  Patio style condo listings declined by 6 percent while units sold increased by 15 percent and prices dropped by 3 percent. Condo (townhouse) listings increased by 10 percent, and sales increased by 35 percent while average price decreased by -2 percent. 
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 single family homes and condo style apartments but most other categories reported small declines and lots remained unchanged. Listings dropped for Condo (apt), Condo (patio) and single family home type of accommodation but increased for lots and 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 180 housing starts in Nanaimo in the second quarter of 2016, which is a decrease of 46.2 percent from the same quarter in 2015. In the second quarter of 2016, 95 single-family homes were built, which is a 9.5 percent decline from the same quarter in 2015.  Semi housing type remained the same at 8 units, while there were no starts on row type housing in second quarter 2016.  Apartment & other type of housing starts saw a significant drop of 59.6 percent in same quarter comparisons.  While second quarter reported a significant drop in new housing construction activity, the first quarter of 2016 was 19.7 percent above Q1 2015 levels.

In 2015, 850 housing units were built, 384 were single family dwellings and 466 were multi-family dwellings. CMHC's latest housing forecast for Nanaimo predicts,  in 2016 single family housing construction will decrease by 8.9 percent to 350 units and multiple dwellings will decrease by 14.2 percent to 400 units.  Overall new housing construction in 2016 will decrease by 11.8 percent over 2015 levels.  The forecast for 2017 is 725 units, which will be a decrease of 3.3 percent over 2016 levels.  

The outlook for the BC housing market is for a higher levels of sales, prices and starts in 2016, with some leveling off in 2017.  Total housing starts are forecast between 35,300 and 36,700 units this year and 31,400 to 33,600 units in 2017.  

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.  Relatively higher home prices in Vancouver could support movement of people to lower-priced housing markets, generating demand in other centres and leading to higher home prices in those markets.


 

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 percent of Nanaimo residents rent the dwelling they live in, while 74 percent own their home.  

The rental vacancy rate for Nanaimo region has been declining steadily since spring of 2013 (8.3 percent) per graph above.  In the Fall of 2015 the vacancy rate was 2.0 percent, while one year earlier the vacancy rate was 4.4 percent.  

Seniors' Housing

The overall vacancy rate for independent living units in senior's residence homes in Nanaimo was 2.8 percent in 2016 compared to 7.5 percent in 2015.  BC's vacancy rate was 6.3 per cent in 2016 and 9.1 per in 2015.   Demand for senior's housing was mainly supported by an increase in the seniors' population, and in some areas, a strong resale market which made it easier for seniors to sell their homes and move into independent living facilities.  While rent increased by 3.1 per cent in the province, Nanaimo's average rent remained virtually the same.  It is anticipated with rising demand and increasing operating costs rent will start to increase.  In the Nanaimo region vacancy rates declined across 1-bedroom and 2-bedroom types, with 2-bedroom recording the largest decline at 8.4 per cent.  Bachelor type living spaces reported a slight rise in the vacancy rate.  

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 $2,935 per month in 2016, up from $ 2,868 in 2015. In Nanaimo the rent remained virtually the same $2,477 in 2016 compared to $2,478 in 2015.   Seniors' housing vacancy rate for Nanaimo region has been dropping significantly over the past five year's i.e.  18.2 percent in 2012 compared to 2.8 percent in 2016.

Tourism Indicators/Passenger Volumes

(Source: Nanaimo Airport)
 
82,284 passengers moved through the Nanaimo Airport in the second quarter of 2016.   This is an increase of 5 percent from the second quarter of 2015. Year to date passenger traffic through the Vancouver International Airport was up 8.1 percent in June   2016 compared to June 2015. Year-to-date passenger traffic through the Nanaimo airport in June was 15.05 percent higher in 2016 compared to one year ago. 
 
(Source: BC Ferries Corporation)
 
The amount of vehicle traffic between Departure Bay and Horshoe Bay increased by 4.53 percent (14,321 vehicles) in the second quarter of 2016, compared to second quarter of 2015.  Passenger volumes increased by .86 percent (7,298 passengers) on this route.  

Vehicle traffic between Tsawwassen and Duke Point increased by 6.54 percent (11,446 vehicles) in the second quarter of 2016, compared to second quarter in 2015.  Passenger volumes increased by 4.33 percent on this route (16,172 passengers).  Overall both routes are surpassing 2015 year to date numbers for vehicle and passenger counts.

 
(Source: Chemistry Consulting Group, Vancouver Island Conference Centre, Tourism Nanaimo)
 
Average occupancy reported by the accommodation sector was 13.7 percent higher in June 2016 compared to June 2015.  Average daily room rates increased by $8.69 year-over-year during the month of June.  Revenue available per room increased by $23.94 in June of 2016.  
Year-to-date overall occupancy at the end of June was up by 7.91 percent in 2016 compared to 2015. Nanaimo's room rate average increased by $4.45 in 2016, while overall revenue available per room increased by $11.99 due to both higher occupancy and higher room rates.

The number of visitors coming into Tourism Information centers to obtain information on the region increased by 12.88 percent in the second quarter of 2016 over second quarter 2015.  Year to date visitor volumes for 2016 are 24.79 percent above those of 2015.  The Vancouver Island Conference Centre reported 3,750 delegate days in June 2016 compared to 4,046 in June 2015.  Year-to -date delegate volumes for 2016 are 7.85 percent below those in 2015.