Monday, October 29, 2007

Positive CMHC Housing Market Outlook for 2007/2008

CMHC released their Housing Market Outlook for Q3 2007. The housing market forecast for the balance of 2007 and 2008 remains positive.

This article will highlight some of their findings (a "Coles Notes" version!):

Ontario - Overview

  • New home construction activity will moderate but remain near historical averages in 2007 & 2008;
  • Growth in Ontario's economy will range between 2 & 2.5% annually this year & next;
  • Ontario's economic growth will lag behind the Canadian average, but the growth gap between Ontario & the west will gradually narrow.

Ontario - Resale & Prices

  • Existing home sales through MLS will set a new record this year. Slightly higher carrying costs in 2008 will pull sales only modestly lower.
  • A more balanced resale market, resulting from higher listings, points to slower growth in house prices;
  • Average MLS price in Ontario will rise by 5.3% this year & 3.4% in 2008.

Mortgage Rates

  • Moderate inflation and a strong Canadian dollar vis-à-vis the U.S. dollar, will help keep Canadian bond yields and mortgage rates flat over remainder of this year.
  • Posted mortgage rates for 5 year terms are forecasted to be in the 6.5% - 7.5% ranges (for remainder of this year & 2008).

Ontario - Multiple Starts

  • Healthy pool of first time buyers looking for less expensive homes combined with provincial gov't efforts to promote higher density construction, suggest condo apartments will remain in demand;
  • Multiple starts will remain relatively stable - increasing slightly from 2007 to 2008.

Ontario - Single Starts

  • Demand for higher priced detached homes will cool despite a rapidly growing population of 'mid 40s' which prefer low density homes;
  • Single starts will cool from 2007 - 2008.

The Canadian Economy

  • The Canadian economy grew at a faster pace than expected in first quarter of 2007;
  • Consumer spending made a significant contribution to economic growth;
  • Key challenge for the Cdn economy has been the deterioration in net exports due to high value of CDN $ & the slow growth rate in US economy;
  • Consumer spending should stay vibrant thanks to high employment, income gains & relatively low interest rates.
The full report is available at http://www.cmhc-schl.gc.ca/odpub/esub/61500/61500_2007_Q03.pdf

Search the MLS or read more about Interest Rates, Power of Sale Properties, Price Trends and more at my website. Homes for Sale

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


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