Canada Mortgage and Housing Corp. sees home starts stabilizing in 2011 and 2012

OTTAWA, February 17, 2011 — After trending lower in the second half of 2010, housing starts are forecast to stabilize at levels consistent with demographic fundamentals in 2011 and 2012, according to Canada Mortgage and Housing Corporation’s (CMHC) first quarter Housing Market Outlook, Canada Edition.

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.

Existing home sales will be in the range of 398,500 to 485,500 units in 2011, with a point forecast of 441,500 units. In 2012, MLS® sales will move up and are expected to be in the range of 406,300 to 519,700 units, with a point forecast of 462,900 units.

Mr. Dugan also noted that the existing home market will remain in the balanced to sellers’ market range in 2011 and 2012. As a result, growth in the average MLS® price is expected to remain in line with economy-wide inflation in 2011 and 2012.

As Canada's national housing agency, CMHC draws on 65 years of experience to help Canadians access a variety of quality, environmentally sustainable and affordable homes. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making informed decisions.

Resale housing market shows further improvement in January

OTTAWA – February 15th, 2011 – National resale housing activity climbed further in January 2011, according to statistics released by The Canadian Real Estate Association (CREA).

Seasonally adjusted national home sales activity rose 4.5 per cent in January 2011 compared to the previous month, reaching the highest level since April 2010. Led by Vancouver and Toronto, seasonally adjusted sales activity posted monthly gains in more than half of all local Canadian markets in January. 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.”

Actual (not seasonally adjusted) national sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards came in 6.6 per cent below levels in January 2010. This was the smallest year-over-year decline since May 2010.

Actual (not seasonally adjusted) new listings on Canadian MLS® Systems normally post their biggest month-over-month increase in January. January 2011 was no exception, marking the first time since 2007 that new listings more than doubled in January compared to the previous month. As a result, seasonally adjusted new listings rose 3.9 per cent from December levels, the largest monthly gain since March 2010.

Sales activity has been on the rise and prices have been stable since last autumn, so CREA had been expecting potential sellers who shied away from the market last summer to begin listing their properties in early 2011. Because sales activity and new supply rose in tandem in January, the national resale housing market remained balanced. The national sales-to-new listings ratio, a measure of market balance, stood at 55.7 per cent in January 2011, which is little changed from the previous two months. Just over half of local markets in Canada were in balanced market territory in January.

The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and is another measure of the balance between housing supply and demand. The seasonally adjusted number of months of inventory stood at 5.5 months at the end of January on a national basis. This is the lowest level since last March.

About two-thirds of local markets recorded year-over-year gains in average price in January 2011. The national average price for homes sold in January 2011 was $343,675. While this is little changed compared to the previous three months, it represents an increase of 4.5 per cent compared to January 2010.

Much of the year-over-year gain in January 2011 resulted from a jump in the number of multi-million dollar home sales in a couple of areas in Greater Vancouver, the effects of which were amplified at the local, provincial, and national levels by the fact that actual monthly volumes for sales activity are low in January compared to other months.

Government Insured Mortgage Regulation changes

The Harper Government Takes Prudent Action to Support the Long-Term Stability of Canada’s Housing Market

Jim Flaherty, Minister of Finance, and  Christian Paradis, Minister of Natural Resources, announced prudent adjustments to the rules for government-backed insured mortgages to support the long-term stability of Canada’s housing market and support hard-working Canadian families saving through home ownership.

“Canada’s well-regulated housing sector has been an important strength that allowed us to avoid the mistakes of other countries and helped protect us from the worst of the recent global recession,” said Minister Flaherty.
“The prudent measures announced today build on that advantage by encouraging hard-working Canadian families to save by investing in their homes and future.”

“The economy continues to be our Government’s top priority,” continued Minister Paradis. “Our Government will continue to take the necessary actions to ensure stability and economic certainty in Canada’s housing market.”

The new measures:

• Reduce the maximum amortization period to 30 years from 35 years for new government-backed insured mortgages with loan-to-value ratios of more than 80 per cent. This will significantly reduce the total interest payments Canadian families make on their mortgages, allow Canadian families to build up equity in their homes more quickly, and help Canadians pay off their mortgages before they retire.
• Lower the maximum amount Canadians can borrow in refinancing their mortgages to 85 per cent from 90 per cent of the value of their homes. This will promote saving through home ownership and limit the repackaging of consumer debt into mortgages guaranteed by taxpayers.
• Withdraw government insurance backing on lines of credit secured by homes, such as home equity lines of credit, or HELOCs. This will ensure that risks associated with consumer debt products used to borrow funds unrelated to house purchases are managed by the financial institutions and not borne by taxpayers.

Our Government’s ongoing monitoring and sound underlying supervisory regime, along with the traditionally cautious approach taken by Canadian financial institutions to mortgage lending, have allowed Canada to maintain strong and secure housing and mortgage markets.

The adjustments to the mortgage insurance guarantee framework will come into force on March 18, 2011.
The withdrawal of government insurance backing on lines of credit secured by homes will come into force on April 18, 2011.

Home Maintenance in Winter - Prevent Disasters in Time

No seasonal home maintenance is as important as the winter one. Uninsulated pipes, leaking faucets and snow accumulation on the roof can lead to costly and unnecessary disasters. Find out how to eliminate issues before they appear!

Roof - Ice dams along the eave and in the gutter can lead to soaked walls and other unpleasant problems. They get formed by either by inadequate insulation letting warm air melt the accumulated mass of snow on the roof or intense sunlight followed by freezing nights. You can prevent this by proper insulation and physical cleanup, as well as installing slippery metal on the roof.

Chimney - Inspect the mortar between the bricks, as frozen water accumulated in cracks can turn it into powder. The result is an unstable chimney.

Furnace - There's no other season when a fully functional furnace plays such an important role. Make sure the oil levels, motor belts, filters and the exhaust flue is in great shape.

Outdoor safety - Purchase reserves of rock sand to ensure safe movement on your driveway and pathwalks.

Seal Air Leaks - Purchase wheatherstrips and use caulk to seal all the air leaks leading to loss of valuable heat.

Clean your Windows - Expose and clean all windows that are on the side which gets the most sunlight. It makes the furnace work less hard.

Tighten Everything - People spend most of time during winter indoors, which provides an ideal setting for smaller repairs. Check for anything that's not tight - be it doorknobs, appliance handles, floorboards or baseboard trims.

Insulation - To prevent additional heat loss and broken pipes, you want to wrap them around with insulating material. Pay extra attention to exposed places.

Check your Air Filters - Clogged filters make air circulation difficult if not impossible at all. This is especially relevant during the winter season.

Gutters and Downspouts - Consider purchasing a gutter screen, which prevents debris from falling in.

Test GFCI outlets - These types of outlets are a must have in all wet areas (bathrooms, kitchen) in your home, providing shock protection. These need to be tripped and reset once a month. If they don't, have the outlet changed by a qualified electrician.

In all cases, professional advice is recommended. 

Canada Mortgage and Housing Corp. sees home starts stabilizing in 2011 and 2012

OTTAWA, February 17, 2011 — After trending lower in the second half of 2010, housing starts are forecast to stabilize at levels consistent with demographic fundamentals in 2011 and 2012, according to Canada Mortgage and Housing Corporation’s (CMHC) first quarter Housing Market Outlook, Canada Edition.

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.

Existing home sales will be in the range of 398,500 to 485,500 units in 2011, with a point forecast of 441,500 units. In 2012, MLS® sales will move up and are expected to be in the range of 406,300 to 519,700 units, with a point forecast of 462,900 units.

Mr. Dugan also noted that the existing home market will remain in the balanced to sellers’ market range in 2011 and 2012. As a result, growth in the average MLS® price is expected to remain in line with economy-wide inflation in 2011 and 2012.

As Canada's national housing agency, CMHC draws on 65 years of experience to help Canadians access a variety of quality, environmentally sustainable and affordable homes. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making informed decisions.

Resale housing market shows further improvement in January

OTTAWA – February 15th, 2011 – National resale housing activity climbed further in January 2011, according to statistics released by The Canadian Real Estate Association (CREA).

Seasonally adjusted national home sales activity rose 4.5 per cent in January 2011 compared to the previous month, reaching the highest level since April 2010. Led by Vancouver and Toronto, seasonally adjusted sales activity posted monthly gains in more than half of all local Canadian markets in January. 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.”

Actual (not seasonally adjusted) national sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards came in 6.6 per cent below levels in January 2010. This was the smallest year-over-year decline since May 2010.

Actual (not seasonally adjusted) new listings on Canadian MLS® Systems normally post their biggest month-over-month increase in January. January 2011 was no exception, marking the first time since 2007 that new listings more than doubled in January compared to the previous month. As a result, seasonally adjusted new listings rose 3.9 per cent from December levels, the largest monthly gain since March 2010.

Sales activity has been on the rise and prices have been stable since last autumn, so CREA had been expecting potential sellers who shied away from the market last summer to begin listing their properties in early 2011. Because sales activity and new supply rose in tandem in January, the national resale housing market remained balanced. The national sales-to-new listings ratio, a measure of market balance, stood at 55.7 per cent in January 2011, which is little changed from the previous two months. Just over half of local markets in Canada were in balanced market territory in January.

The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and is another measure of the balance between housing supply and demand. The seasonally adjusted number of months of inventory stood at 5.5 months at the end of January on a national basis. This is the lowest level since last March.

About two-thirds of local markets recorded year-over-year gains in average price in January 2011. The national average price for homes sold in January 2011 was $343,675. While this is little changed compared to the previous three months, it represents an increase of 4.5 per cent compared to January 2010.

Much of the year-over-year gain in January 2011 resulted from a jump in the number of multi-million dollar home sales in a couple of areas in Greater Vancouver, the effects of which were amplified at the local, provincial, and national levels by the fact that actual monthly volumes for sales activity are low in January compared to other months.

Government Insured Mortgage Regulation changes

The Harper Government Takes Prudent Action to Support the Long-Term Stability of Canada’s Housing Market

Jim Flaherty, Minister of Finance, and  Christian Paradis, Minister of Natural Resources, announced prudent adjustments to the rules for government-backed insured mortgages to support the long-term stability of Canada’s housing market and support hard-working Canadian families saving through home ownership.

“Canada’s well-regulated housing sector has been an important strength that allowed us to avoid the mistakes of other countries and helped protect us from the worst of the recent global recession,” said Minister Flaherty.
“The prudent measures announced today build on that advantage by encouraging hard-working Canadian families to save by investing in their homes and future.”

“The economy continues to be our Government’s top priority,” continued Minister Paradis. “Our Government will continue to take the necessary actions to ensure stability and economic certainty in Canada’s housing market.”

The new measures:

• Reduce the maximum amortization period to 30 years from 35 years for new government-backed insured mortgages with loan-to-value ratios of more than 80 per cent. This will significantly reduce the total interest payments Canadian families make on their mortgages, allow Canadian families to build up equity in their homes more quickly, and help Canadians pay off their mortgages before they retire.
• Lower the maximum amount Canadians can borrow in refinancing their mortgages to 85 per cent from 90 per cent of the value of their homes. This will promote saving through home ownership and limit the repackaging of consumer debt into mortgages guaranteed by taxpayers.
• Withdraw government insurance backing on lines of credit secured by homes, such as home equity lines of credit, or HELOCs. This will ensure that risks associated with consumer debt products used to borrow funds unrelated to house purchases are managed by the financial institutions and not borne by taxpayers.

Our Government’s ongoing monitoring and sound underlying supervisory regime, along with the traditionally cautious approach taken by Canadian financial institutions to mortgage lending, have allowed Canada to maintain strong and secure housing and mortgage markets.

The adjustments to the mortgage insurance guarantee framework will come into force on March 18, 2011.
The withdrawal of government insurance backing on lines of credit secured by homes will come into force on April 18, 2011.

Home Maintenance in Winter - Prevent Disasters in Time

No seasonal home maintenance is as important as the winter one. Uninsulated pipes, leaking faucets and snow accumulation on the roof can lead to costly and unnecessary disasters. Find out how to eliminate issues before they appear!

Roof - Ice dams along the eave and in the gutter can lead to soaked walls and other unpleasant problems. They get formed by either by inadequate insulation letting warm air melt the accumulated mass of snow on the roof or intense sunlight followed by freezing nights. You can prevent this by proper insulation and physical cleanup, as well as installing slippery metal on the roof.

Chimney - Inspect the mortar between the bricks, as frozen water accumulated in cracks can turn it into powder. The result is an unstable chimney.

Furnace - There's no other season when a fully functional furnace plays such an important role. Make sure the oil levels, motor belts, filters and the exhaust flue is in great shape.

Outdoor safety - Purchase reserves of rock sand to ensure safe movement on your driveway and pathwalks.

Seal Air Leaks - Purchase wheatherstrips and use caulk to seal all the air leaks leading to loss of valuable heat.

Clean your Windows - Expose and clean all windows that are on the side which gets the most sunlight. It makes the furnace work less hard.

Tighten Everything - People spend most of time during winter indoors, which provides an ideal setting for smaller repairs. Check for anything that's not tight - be it doorknobs, appliance handles, floorboards or baseboard trims.

Insulation - To prevent additional heat loss and broken pipes, you want to wrap them around with insulating material. Pay extra attention to exposed places.

Check your Air Filters - Clogged filters make air circulation difficult if not impossible at all. This is especially relevant during the winter season.

Gutters and Downspouts - Consider purchasing a gutter screen, which prevents debris from falling in.

Test GFCI outlets - These types of outlets are a must have in all wet areas (bathrooms, kitchen) in your home, providing shock protection. These need to be tripped and reset once a month. If they don't, have the outlet changed by a qualified electrician.

In all cases, professional advice is recommended.