News that General Motors has suspended all vehicle production Friday at its Oshawa assembly plant due to the strike by the United Auto Workers union in the United States has real estate experts in Durham Region watching what, if any impact, it will have on the housing market.
Approximately 1,850 unionized workers have been temporarily laid off with pay due to the halt in production.
On Tuesday the company stopped truck production and sent about 1,200 hourly workers home due to a lack of parts as more than 30 GM operations in the U.S. are shut because of the strike by some 49,000 UAW workers.
So far, despite all the uncertainty swirling around the automotive industry in a region long regarded as the vehicle capital of Canada, everything continues to trend upward for housing sales.
John Owen, a broker with Re/Max Impact Realty and the author of Oshawa Realty Blog, says that “it is fair to surmise that GM's impact on the local real estate market has been at least somewhat inconsequential. Much of that doesn't have to do with GM, but more with what else is driving the local market.”
Owen has reported that sales volume in Durham Region increased 23.5 per cent from last year with 1046 units sold versus 843 last August (TREB +25.7 per cent). It was also up, bucking seasonal trends, from July by 0.5 per cent. (TREB -10.3 per cent).
He also points out that the time a property takes to sell - called DOM or days on market - was 26 in August, showing a very good pace to sales, especially for late summer. This figure tends to increase after the spring market before dropping again in the fall.
Another indicator of demand is sale price compared to list price. It was 98 per cent in Durham in August, again showing high levels of buyer demand.
“These factors combined are a good barometer for sellers, as it shows that not only is current inventory moving at a good pace, but it is also selling at a price that is very close to asking,” Owen wrote earlier in September.
A recent report published by Durham Region showed that development in Durham had a “banner” 2018, with a strong rise in the total value of building permits and a hike in the number of permits for new residential units. Across the region in 2018 the value of building permits increased by five per cent from $1.96 billion in 2017 to $2.06 billion; the value of building permits increased by five per cent from $1.96 billion in 2017 to $2.06 billion in 2018; and the value of residential building permits also increased by 7.3 per cent from $1.3 billion to $1.48 billion.
Owen notes that average prices in Durham are far lower than districts to the west or north of Toronto. Add in the mortgage stress tests and limits on CMHC financing, and Durham Region, he says, has become a hot spot for families and new immigrants wanting more than a condominium with a reasonable commute distance to downtown Toronto.
“Add to that the continued and planned expansions to GO train service, expansions to major highways including the 407, 412 and 418, and you have lots of reasons for people to be taking a hard look at Durham for their next move,” says Owen.
Employment at the GM plant has steadily declined over the years, as various vehicle models shifted production to other GM facilities and numerous plant facilities were decommissioned. In November of 2018, GM announced that it would halt production in Oshawa by the end of 2019. At the time, there were approximately 2,500 people employed by the plant, plus hundreds more at supporting companies.
In the interim, there have been announcements by the company on programs to help affected employees transition to other roles within the GM Canada umbrella. These include other plants and dealerships. They also worked with various levels of government to help those who wished to transition to different careers with education and training programs. Others had options for early retirement.
On Friday GM also halted production on its flex line that produces the Chevrolet Impala and employs about 650 workers.
READ: The GTA’s Golden Girls
A GM Canada statement says work continues at stamping operations in Oshawa, a parts plant in St. Catharines and its CAMI assembly plant in Ingersoll, which makes sport utility vehicles.
United Auto Workers members at GM’s U.S. operations walked off the job for the first time in over a decade on Monday over issues including wages, health care, and job security.
With files from Canadian Press, Oshawa Express, Oshawa Realty Blog