Nanaimo Quarterly Economic Update
Q3 2016

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

Building Permits

Source: City of Nanaimo 

The City of Nanaimo issued 298 building permits valued at $71.6 million in the third quarter of 2016. The value of permits issued increased by 37.3 percent in third quarter 2016 compared to third quarter 2015. In comparison to second quarter 2016 building permit values increased by 61.2 percent.
79.9 percent of the building permit values in Q3 2016 were for residential construction. 10.5 percent of total building permit value was for commercial projects, followed by 8.4 percent for public, 0.7 percent for Industrial and 0.6 percent for miscellaneous. In Q3 2015, residential projects accounted for 82.4 percent of total building permit values followed by 15.1 percent for commercial units, 1.6 percent for Public, and less than 1 percent for both Industrial and miscellaneous.


Business Licenses

Source: City of Nanaimo

In the third quarter of 2016, 171 new businesses obtained a City of Nanaimo business license. This is a 2.3 percent decrease from the same quarter in 2015.  It is a 21.6 percent decrease from the second quarter in 2016.


(Source: Statistics Canada Labour force survey)

There were 46,600 persons employed in Nanaimo in September of 2016, this is 5,300 more than in September 2015.   The main reason for this is the labour force participation rate, which increased to 56.9 percent in September 2016 compared with 51.3 percent one year prior.  As a result, there were 7,100 more people in the labour force in September 2016 and 5,300 of them found employment. Nanaimo's unemployment rate in September was 7.6 percent, Vancouver Island unemployment rate was 5.4 percent, BC 5.8 percent and Canada 7.1 percent. Nanaimo's unemployment rate was higher than the Vancouver Island, BC and Canada averages.
Historically, Nanaimo's participation rate has been lower than both BC and Canada.  September 2016 was no different when Nanaimo reported participation rate of 56.9 percent compared with Canada at 66.3 and BC at 64.9 percent. Typically areas with an older demographic tend to have lower participation rates.
BC's 3 month moving average unemployment rate in September declined by 0.5 percentage points compared with one year prior.    In September, employment in both the public (-115,200) and private sectors (-7,800) decreased. On the other hand, the number of self-employed individuals increased by 22,400.  BC's unemployment rate was the lowest in Canada during the month of September.

Residential Real Estate

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

In September 2016, the average resale price of a single family home increased by 12 percent ($434,886) compared to September 2015 ($388,618). Homes listed decreased by 3 percent while units sold increased by 22 percent. Lots listed for sale decreased by 3 percent below September 2015 levels and sales increased by 15 percent.  Prices for lots increased 12 percent in the period between September 2015 and September 2016.  The number of Condo (apt) units listed for sale decreased by 5 percent, while sales increased by 48 percent, and the average price increased by 7 percent.  Patio style condo listings increased by 11 percent while units sold increased by 16 percent and prices increased by 3 percent. Condo (townhouse) listings increased by 21 percent, and sales increased by 39 percent while average price increased by 2 percent.

Every category of residential real estate posted increases in sale volumes. Average prices over the twelve month period increased in all categories, with the largest increase seen in Single Family Homes (12%) and Lots (9%). Listings dropped for Condo (apt), single family home and Lots for sale, but increased for lots and Condo (patio) and Condo (townhouse) 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 spring 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 seniors' 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 years i.e.  18.2 percent in 2012 compared to 2.8 percent in 2016.

Tourism Indicators/Passenger Volumes

(Source: Nanaimo Airport)
97,908 passengers moved through the Nanaimo Airport in the third quarter of 2016.   This is an increase of 4 percent from the third quarter of 2015. Year to date passenger traffic through the Vancouver International Airport was up 12.2 percent in September 2016 compared to September 2015. Year-to-date passenger traffic through the Nanaimo airport in September was 10.71 percent higher in 2016 compared to one year ago.
(Source: BC Ferries Corporation)
The amount of vehicle traffic between Departure Bay and Horseshoe Bay increased by 3.97 percent (16,484 vehicles) in the third quarter of 2016, compared to third quarter of 2015.  Passenger volumes increased by 2.74 percent (7,298 passengers) on this route. 
Vehicle traffic between Tsawwassen and Duke Point increased by 6.86 percent (15,255 vehicles) in the third quarter of 2016, compared to third quarter in 2015.  Passenger volumes increased by 6.77 percent on this route (37,321 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 11.71 percent higher in September 2016 compared to September 2015.  Average daily room rates increased by $8.13 year-over-year during the month of September.  Revenue available per room increased by $20.81 in September of 2016. 

Year-to-date overall occupancy at the end of September was up by 8.03 percent in 2016 compared to 2015.  Nanaimo's room rate average increased by $6.41 in 2016, while overall revenue available per room increased by $14.32 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 31.78 percent in the third quarter of 2016 over third quarter 2015.  Year to date visitor volumes for 2016 are 28.87 percent above those of 2015.  The Vancouver Island Conference Centre reported 4,314 delegate days in September 2016 compared to 363 in September 2015.  Year-to -date delegate volumes for 2016 are 21.35 percent above those in 2015.