Rolling out the Welcome Mat: Thunder Bay Housing during COVID 19

October 1, 2021 - This article first appeared in The Walleye Magazine, October issue.


Going once, going twice, sold.

For homebuyers that have bought a home during COVID19, competition has been stiff. Typically during crises people will try and avoid purchasing big items such as homes. However, as many have spent more time at home since the start of the pandemic, people want more space, whether it be for work, remote education, or extended family coming to live in the home.

To explain why this has been happening in Thunder Bay, let’s start with supply. Since 1990, the number of residential homes that were built has been steadily declining each year (see Figure 1).

Figure 1: All Dwelling Type Completions for City of Thunder Bay, 1990-2021


Source: Author’s calculations, CMHC Starts and Completions Survey
Note: Data for all intended markets; all dwelling types: single, semi-detached, row, and apartment

In addition to the limited supply, there are several factors on the demand side of the equation that are pushing up prices. The first is construction costs, which can be attributed to disruptions in the materials supply chain, rising material costs, and new safety rules. Second, interest rates are at a “record-low.” When looking at mortgage rates, on December 1, 2019 a discounted[i] 5-year fixed rate was 2.29 per cent, 1.39 percent the next year, and then 1.68 per cent on August 1, 2021. A similar downward pattern was found with a discounted 5-year variable rate too.

As figure 2 shows, there was an increase in average home prices across the five major markets in Northern Ontario. For Thunder Bay, there was an 11.9 per cent increase.

Figure 2: Home Prices across Northern Ontario, Ontario and Canada, 2020-2021


Source: The Canadian Real Estate Association, National Price Map
Note: *Areas displaying MLS Home Price Index benchmark prices; all other areas display average prices.

Based on the data, it is clear more housing needs to be built. Aside from easing up the pressure on supply, housing plays an important role in one’s health and well-being, job security, and human capital development. Given this, one of the ways to encourage more housing in the community is creative thinking. The Canada Mortgage and Housing Corporation runs two programs that are driving this forward: The Housing Supply Challenge, as well as the Affordable Housing Innovation Fund. More locally there is the Community Homelessness Prevention Initiative by the Thunder Bay District Social Services Board. Finally, in terms of affordability, CMHC also runs a first-time home buyer incentive program.

While COVID19 has exacerbated many ongoing issues such as home prices, it can also be an opportunity. RE/MAX reported in the fall of 2020 that 32 per cent of Canadians are not interested in living in large urban areas anymore. Given how efforts on the population growth front will continue to be important in Northern Ontario, continuing to push for more housing is certainly worth thinking about for Thunder Bay.


Rachel Rizzuto is a Research Manager 

Write for us

The content of Northern Policy Institute’s blog is for general information and use. The views expressed in this blog are those of the author and do not necessarily reflect the opinions of Northern Policy Institute, its Board of Directors or its supporters. The authors take full responsibility for the accuracy and completeness of their respective blog posts. Northern Policy Institute will not be liable for any errors or omissions in this information, nor will Northern Policy Institute be liable for any detriment caused from the display or use of this information.  Any links to other websites do not imply endorsement, nor is Northern Policy Institute responsible for the content of the linked websites.

Northern Policy Institute welcomes your feedback and comments. Please keep comments to under 500 words. Any submission that uses profane, derogatory, hateful, or threatening language will not be posted. Please keep your comments on topic and relevant to the subject matter presented in the blog. If you are presenting a rebuttal or counter-argument, please provide your evidence and sources. Northern Policy Institute reserves the right to deny any comments or feedback submitted to that do not adhere to these guidelines.  

0 Reader Comments

All fields are required.