CMHC Forecasts Return to Stability in 2011

There is news that demographic fundamentals will be a guiding force in 2011 for housing activity, according to the Q1 2011 forecast released by CMHC.

After moving somewhat lower during the end of 2010, CMHC predicts that housing starts will start to stabilize in 2011 and continue through to 2012.

According to the forecast, “Housing starts will be in the range of 157,300 to 192,900 units in 2011, with a point forecast of 177,600 units. In 2012, housing starts will be in the range of 154,600 to 211,200 units, with a point forecast of 183,800 units.”

“Modest economic growth will continue to push employment levels higher this year and next. This, in conjunction with relatively low mortgage rates, will continue to support demand for new homes. Housing starts will remain in line with long term demographic fundamentals over the course of 2011 and 2012,” said Bob Dugan, Chief Economist for CMHC

CMHC predicts that existing home sales will be in the area of 398,500 to 485,500 units for 2011- with a point forecast of 441,500 units with expectation that this will increase through to 2012. The point forecast for 2012 is 462,900 units; they expect MLS sales will move from 406,300 to 519,700.

There is expectation that the market, although achieving some balance in 2011, will remain in the sellers’ market range. Building on MLS price gains that happened at the end of 2010, as a further indication of a return to balance, they feel that MLS price will keep on a growth curve consistent with “economy wide” inflation that will carry through 2011-2012.

Highlights from across the country include a Western bucking of the rest of the national trend, where in B.C, there is expectation that starts will increase by 1.6%. Alberta will hold the status quo.

In Ontario, the improving economy will provide momentum for an upswing in housing starts, but CMHC feels that they will not be realized until 2012.

New Brunswick is expected to be the weakest of the Atlantic Provinces.

Most of the rest of the country is expecting to see a decline in housing starts, but there is promise of return to growth towards 2012.

Economic Growth to Slow, Housing to Stay Balanced

According to a recent report released by the Conference Board of Canada, the Canadian economy is expected to slow slightly in 2011 in most major centres.

The Metropolitan Outlook covers 27 census metropolitan areas. Of these 27, there is expectation for only a handful -  Windsor, Calgary, Oshawa, Regina, Saskatoon, London, Sherbrooke, Winnipeg, and Thunder Bay -  to see higher real gross domestic product (GDP) growth this year.

"Most Canadian cities rebounded well from the recession. This year, however, a weaker domestic economy, winding down of federal and provincial government stimulus measures and uncertain economic conditions in the United States will result in stable or lower growth in a majority of cities," said Mario Lefebvre, Director, Centre for Municipal Studies

In terms of overall economic growth, in the top spot as the fastest growing Metropolitan economy for 2011, is Windsor. On the heels of growth of 3.5 % last year, there is an expectation that the GDP will rise by 3.9% in 2011- thanks in part to an expected cash injection in the construction industry, via the $1.6-billion Windsor-Essex Parkway project which will begin in 2011.

Similarly, Calgary will continue to grow promisingly- buoyed in part by the robust energy sector. There is forecasted growth of by 3.7 % in 2011, and expectations that it will exceed 4.0% in 2012.

In terms of housing, Robin Wiebe, Senior Economist with the Conference Board of Canada says that most of the markets are currently balanced; “Of 28 markets surveyed, 23 of them are balanced. Of the remaining five, two are in buyers market positions (Saskatoon and Trois Rivieries) and the other three are in sellers’ position (Thunder Bay, Sudbury and Oshawa).”

Wiebe holds hope that balance will be maintained in the Canadian housing market through the next year. “The real issue here is, we have not half bad employment numbers and reasonably low interest rates, which are good for the market.  There is also the introduction of mortgage rule changes- which have yet to take effect.  There may be a bit of a rush to market to buy for people who won’t qualify under those changes- before they take effect. This might bring sales forward.”

“There are enough good things present in our economy to avoid tipping too far into buyers’ market territory. There is an expectation, as well, that interest rates will remain low, and so affordability is still present. There is also expectation that employment numbers will continue to stay in a good range.”

Sales Numbers Down, Prices Up: GTA Realtors

According to new numbers released by the GTA Realtors, there is a steep decline in resales from this time last year. The market is currently unable to maintain the record-breaking pace from last February, but there is still robust activity.

There were 3,084 resales during the first two weeks of February 2011- which represents a 13% decrease from the same two weeks, this time last year.

"We are on pace for a strong sales result in February, but transactions will come in lower than the record result reported last February. Sales remain strong because the GTA resale market contains a diversity of housing types catering to a wide array of home ownership needs," said Toronto Real Estate Board (TREB) President Bill Johnston.

While resales transaction numbers are down, prices are up. This year, during the first two weeks of February, the average price for transactions was $451,257; this signals a 5 % increase over the same time frame last year.

"Average selling price growth for existing homes is expected to range between three and five per cent this year. Tighter market conditions over the last four months have pushed price growth to the top end of this range," said Jason Mercer, TREB's Senior Manager of Market Analysis.

Looking at different home types year-over-year  for the first two weeks of February , sales for Detached homes were  down 17%, but prices rose by 7%.; sales for Semi-detached homes fell by 11%, but prices rose by 6%;  townhouse sales fell by 16%, and prices remained steady;  sales numbers for condos fell by 5%, and prices increased by 6%.

VIP for new condo at 42 Charles St. (Yonge & Bloor).

Early March (Date to be announced) at The Sales Centre

One day only special VVV-VIP Event – not available to the public

About The Condo – More details to be updated soon

42 Charles St. East (Yonge and Bloor), walk to Subway

Starting from the mid $200,000 this is a once in a life time opportunity to invest in Toronto’s most sought after Yonge and Bloor neighborhood.

The former YMCA building at 42 Charles Street East (across the street from Chaz) purchased by Cresford (of NXT, NXT2, Casa, BSN and Merton-Yonge-Condos fame).  The new tower will stand 64-storeys (dwarfing Casa which stands 46 storeys). 

Cresford Developments has been focusing on Charles St recently, with its CASA development at 33 Charles St West and Bloor Street Neighborhood development at 38 Charles St. This site should be another great success as East Charles St. in general has also been popular with both developers and end users in the past few years, with 77 Charles West by Aspen Ridge Homes and Chaz on Charles by Edenshaw Homes on 45 Charles St. East. all doing very well.

Charles Street is on fire and those lucky clients that were able to purchase a unit from our CHAZ VIP event back in July have already seen an increase of around 19.22% in only 8 months!!!!

About The Condo –

·       42 Charles St. East

·       The former YMCA building at 42 Charles Street East (across the street from Chaz) purchased by Cresford (of NXT, NXT2, Casa, BSN and Merton-Yonge-Condos fame).  The new tower will stand 64-storeys (dwarfing Casa which stands 46 storeys). 

·       Cresford Developments has been focusing on Charles St recently, with its CASA development at 33 Charles St West and Bloor Street Neighborhood development at 38 Charles St . This site should be another great success as East Charles St. in general has also been popular with both developers and end users in the past few years, with 77 Charles West by Aspen Ridge Homes and Chaz on Charles by Edenshaw Homes on 45 Charles St. East. all doing very well.

According to Urbanation, number cruncher to the development industry, 16 000 new condo units are expected to come to Toronto this year (5 500 will be in the downtown core)

The Yonge and Bloor area is set to becomce a $900/sq foot neighbourhood in the next few years.  With th the launch of many luxury condos in the area, it can only go up from here.

Toronto real estate prices will continue to rise in value and this area is still number one for young hip professional and investors alike.

Downtown Toronto remains one of the safest – if not the safest – place to live in the city.

Charles Street is located on the border of Yorkville and Church & Wellesley.

Just a short walk from everything.  Star studded art galleries, bars, restaurants, clubs and shopping in Yorkville

The neighbourhood has seen some major new condominium developments in the last feww years, boaoasting developments such as: X, X2 (Great Gulf Homes), 77 Charles Street (Aspen Ridge), Chaz on Charles (Enendshaw), Casa (Cresford). 

This is sure to be an investment opportunity of a lifetime.  This 64 story Triple AAA Condo has spectacular views of the city and is just steps from the Yonge and Bloor Subway lines.

2011 Off To A Positive Start In Resale Market

Building on the momentum from the end of 2010, 2011 started off strongly in the Canadian property resale market, according to the newest report released by CREA.

This spike in numbers does not come as any major surprise, given the introduction of the new mortgage lending restrictions. Buyers, it seems, are hurrying to beat the deadline for when these measures will be fully enacted- in spring 2011.

Reaching levels not seen since last spring, across the country, seasonally adjusted home sales activity went up by 4.5 % in January 2011 over December’s numbers.  Vancouver and Toronto topped the list for seasonally adjusted sales activity.

Additionally, monthly gains were realized in more than half of all local Canadian markets in January. According to the report,”National sales activity has improved steadily since last summer, and now stands almost 25 per cent above the low point reached in July 2010.”

“We anticipated the recent announcement of tighter mortgage regulations, which will come into effect this March, would pull forward sales activity into the first quarter of 2011, particularly in some of Canada’s more expensive housing markets,” said Gregory Klump, CREA’s Chief Economist. “The sharp rise in sales activity in Toronto following the announcement provides early evidence confirming this,” said Klump.

It will take some time before the longer term impact of the latest mortgage regulations on the housing market can be known,” said Georges Pahud, CREA’s President. “For that reason, further action shouldn’t be taken until the impact can be measured. In the meantime, if last year can be used as any guide, sales activity may heat up further as we get closer to the date on which tighter mortgage regulations come into effect, especially in some of Canada’s pricier markets. That said, local housing market trends often diverge from national trends, so buyers and sellers should consult their local REALTOR® to understand how the market is shaping up where they live.”

Balance is the word best associated with the current sales environment. In January, the housing market began to see signs of improved stability- balanced out by matched numbers of sales activity numbers and levels of inventory.

At the lowest levels seen since last March, the seasonally adjusted number of months of inventory remained stable at 5.5 months at the end of January, nationally- which is another indicator of balance.

In terms of average prices, upwards of two-thirds of local markets reported gains  from this time last year. The national average price for homes sold in January 2011 was $343,675. This price is similar to those seen in the three months prior, but signals a rise of  4.5 % compared to January 2010.