CMHC – Housing Starts to Taper
Fourth quarter results were released by CMHC earlier this week alongside forecasts for 2013. Although housing starts throughout 2012 have been supported by the strength in multiple starts, CMHC anticipates that housing starts will drop off over nine per cent in 2013 as the multiple starts sector begins to cool off. The resale activity across Canada will not change too much over 2013 while resale prices are projected to grow at a rate close to (or slightly below) inflation. Since 2011, year-over-year home prices increased slightly by 0.2 per cent to sit slightly over $365K, and are expected to make future gains in 2013 when the average price will sit around $370,500.
Interest Rates to Remain at Historical Lows
The good news to those who are looking to enter the market is that CMHC expects only a slight increase to rates in 2013; they should remain low by historical standards. Many key economic indicators will have a positive effect on the housing market. Throughout 2013 CMHC expects interest rates to remain stable, employment rates to grow, income to experience moderate growth, and for net migration to continue to improve which will contribute to an increase in rental demand, and therefore a decrease in vacancy rates. All of these factors will support the housing market, whereas new mortgage insurance rules and the low natural population growth in Canada offset these factors and moderate the market.
October Results: Toronto
Toronto Real Estate Board released their monthly resale housing figures and although October sales are lower this year with the largest drop seen in the 416, both average prices and new listing figures are up. Condo apartment sales experienced the biggest decline and made the largest impact on the dampened sales numbers, while semi-detached (416) and detached (905) were the biggest drivers to the increase in average prices.
October Results: Vancouver
The Real Estate Board of Greater Vancouver released their October results as well. October saw a slight decrease in both the number of listings and the average price, while home sales slightly increased as the market remains to be in favour of buyers (low interest rates, increased supply etc.). Sales were down by over 16 per cent year over year, however up over 27 per cent month over month. The biggest decrease in sales and most pronounced price shock was experienced in the detached segment; over the last year the average price of a detached home in Vancouver has dropped nearly $40,000.
RateSupermarket.ca Week in Review
Over the last week the best mortgage rates page did not see much action. The only changes were a 2 bps decrease to the 3 year fixed rate which sits at 2.77 per cent and an increase to the 10 year fixed rate which still sits below 4 per cent at 3.78.