Nanaimo Quarterly Economic Update
Q4 2015

A look at the Nanaimo economic conditions,
October to December 2015. Author: Amrit Manhas, Economic Development Officer

Employment

(Source: Statistics Canada Labour force survey)

In December 2015, the unemployment rate for Nanaimo was 7.1%, considerably higher than one year ago, when it was 4.0%.  BC reported an unemployment rate of 6.0%, Canada 6.5% and Vancouver Island 6.4% for December 2015.  Unemployment rates for Vancouver Island, BC and Canada all increased in December 2015 compared to one year ago. Nanaimo's unemployment rate follows similar trends to BC's, however, there tends to be greater variability.  This variability is likely due to the small sample size.   In the first two quarters of 2015 an unemployed rate was not reported for Nanaimo because the sample size did not meet the labour force survey confidence threshold.  Nanaimo's annual average unemployed rate for 2014 was 5.8% and for 2015 it was 4.7%, this is likely a more accurate reflection of the real unemployment rate than the three month moving average.  
 
Nanaimo's participation rate was 51.6% compared to one year ago when it was reported at 61.3%.  Historically, Nanaimo's participation rate has been lower than both BC and Canada. 
 
In BC, full-time jobs (-6,200) and part-time jobs (-1,600) decreased in December. The increase in the labour force combined with a decrease in employment caused the unemployment rate to rise to its highest level since December 2013.    The unemployment rate in BC tied for 3rd place in Canada with Ontario (6.7%).  BC posted the highest employment growth rate (+2.3%) among the provinces for 2015 with 51,600 more jobs than one year ago.  The labourforce grew by 87,000 during the same time frame, increasing the unemployment rate from 5.5% in December 2014 by 1.2% despite the strong employment growth.

Residential Real Estate

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

In December 2015, the average resale price of a single family home increased by 6% ($391,313) compared to December 2014 ($370,760). Homes listed increased by 3% while units sold increased by 16%. Lots listed for sale were 36% below December 2014 levels and sales declined by -13%.  Prices for lots decreased by 3% in the twelve month period between December 2015 and December 2014.  The number of Condo (apt) units listed for sale decreased by 15%, while sales increased by 27%, and the average price increased by 3%.  Patio style condo listings increased by 10% and units sold increased by 9%. Condo (townhouse) listings decreased by 2%, and sales increased by 18% 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 single family and condo style apartments but all other categories reported small declines. Listings dropped for Lots, Condo (apt) and Condo (town) type of accommodation but increased for single family homes, and Condo (patio) 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 335 housing starts in Nanaimo in the second quarter of 2015, which is an increase of 113% from the same quarter in 2014. In the second quarter of 2015, 105 single-family homes were built, which is exactly the same as second quarter 2014.  Semi, Row and Apt type housing starts saw a huge increase in the same quarter comparisons.  Apt and other type of build increased by as much as 365% from second quarter 2014.
 
In 2014, 318 single family dwellings were built and 347 were multi-family dwellings. CMHC's latest housing forecast for Nanaimo predicts,  in 2015 single family housing construction to increase by 41.5% (132 units) and multiple dwellings to increase by 0.9% (3 Units).  Overall new housing construction in 2015 is estimated to increase by 20.3% over 2014 levels.  The forecast for 2016 is 425 single family homes and 325 for multiple units for a total of 750.  This will be a decrease of 6.3% over 2015 levels. 
 
Housing starts in BC's urban centres are also trending up compared to one year ago.    Robust new residential construction reflects demand for housing stemming from population growth and an active resale market.  As well inventories of completed and unabsorbed new housing have been trending lower as demand for new homes exceeds completions.  Mortgage interest rates remain low and relatively stable.  While labour market conditions have improved slightly, the underlying shift from part-time to full-time jobs provides a more solid foundation for housing demand.  Stronger gains in net interprovincial migration are also contributing to housing demand.    This represents the fifth consecutive quarterly net gain from other provinces, majority from Alberta and Ontario.


 

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.

Building Permits

Source: City of Nanaimo

The City of Nanaimo issued 245 building permits valued at $63.41 million in the fourth quarter of 2015. The value of permits issued increased by 66.4% in the fourth quarter 2015 compared to fourth quarter 2014. In comparison to third quarter 2015 building permit values in the fourth quarter increased by 21.5%.
 
56.5% of the building permit values in Q4 2015 were for residential construction.  41% of total value was for commercial projects, followed by 2.6% for Industrial and less than 1% for miscellaneous. In Q4 2014, residential projects accounted for 93.5% of total building permit values followed by 6.2% for commercial units and less than 1% for Public and miscellaneous combined.
 

 

Business Licenses

Source: City of Nanaimo

In the fourth quarter of 2015, 164 new businesses obtained a City of Nanaimo business license. This is a 6.5% increase from the same quarter in 2014.  It is a 6% decrease from the third quarter in 2015.
 

Tourism Indicators/Passenger Volumes

(Source: Nanaimo Airport)
 
79,819 passengers moved through the Nanaimo Airport in the fourth quarter of 2015.   This is an increase of 12% from the fourth quarter of 2014. Overall traffic through the Vancouver International Airport was up 5.2% in November 2015 compared to November 2014. Year-to-date passenger traffic through the Nanaimo airport in December was 15.4% higher in 2015 compared to one year ago.
 
Note: December 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 5.71% (14,833 vehicles) in the fourth quarter of 2015, compared to the fourth quarter 2014.  Passenger volumes also increased by 4.15% (29,727 passengers) on this route. 
 
Vehicle traffic between Tsawwassen and Duke Point increased by 5.11% (7,254 vehicles) in the fourth quarter of 2015, compared to fourth quarter in 2014.  Passenger volumes increased by 3.69% on this route (11,279 passengers).  Overall in 2015 BC Ferries passenger volumes increased by 3.42% and vehicle volumes increased by 4.45 over 2014 levles.  

 
(Source: Chemistry Consulting Group, Vancouver Island Conference Centre, Tourism Nanaimo)
 
Average occupancy reported by the accommodation sector was 4.4% higher in December 2015 compared to December 2014.  Average daily room rates increased by $4.15 year-over-year during the month of December.  Revenue available per room increased by $6.61 in December of 2015. 

Year to date overall occupancy at the end of December was up by 2.14% in 2015 compared to 2014.  Nanaimo's room rate average increased by $7.25 in 2015, while overall revenue available per room increased by $6.90 due to higher occupancy and higher room rates.

The number of visitors coming into Tourism Information centers' to obtain information on the region increased by 47.1% in the fourth quarter of 2015 over fourth quarter 2014.  Overall visitor volumes for 2015 are 15.17% above those of 2014.  The Vancouver Island Conference Centre reported 426 delegate days in December 2015 compared to none in December 2014.  Year to date delegate volumes are 18.06% higher in 2015 compared to 2014.