The seasonally adjusted annual rate¹ of housing starts was 197,300 units in March 2010, according to Canada Mortgage and Housing Corporation (CMHC).

Seasonally adjusted annual rate estimates of housing start activity were also revised up for January and February². This resulted in month-over-month gains of 7.5 per cent in January (189,000 units), 6 per cent in February (200,400 units), and a slight decrease of 1.5 per cent in March.

“The moderation in March housing starts was due to a decrease in the volatile multiple starts segment. Helping to offset this was an increase in singles starts as well as more activity in rural areas,” said Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre.

The seasonally adjusted annual rate of urban starts decreased by 4.2 per cent to 175,200 units in March. Urban multiple starts decreased by 15.2 per cent to 77,500 units while single urban starts increased by 6.9 per cent to 97,700 units.

March’s seasonally adjusted annual rate of urban starts increased by 13.5 per cent in Quebec and by 7.3 per cent in the Prairie region, but decreased by 16.3 per cent in British Columbia, by 15.5 per cent in Ontario, and by 8 per cent in Atlantic Canada.

Rural starts were estimated at a seasonally adjusted annual rate of 22,100 units in March³.

As Canada’s national housing agency, CMHC draws on more than 60 years of experience to help Canadians access a variety of high 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 vital decisions.

The vacancy rate throughout the St. John’s CMA (census metropolitan area) remained low in 2009. In fact, there was little change in the vacancy rate, which largely reflects the impact of solid economic activity and positive employment growth within the region. Robust residential construction activity, combined with healthy MLS®1 sales and a strong supply of existing homes for sale, translated into continued house price growth, once again making the transition from renting to home ownership challenging for renter households. CMHC’s rental market survey conducted during the first two weeks of October included the enumeration of 3,601 privately initiated apartment units within the St. John’s CMA. The survey identified 31 vacancies within the rental stock, translating into a vacancy rate of 0.9 per cent. This compares to a similar 0.8 per cent vacancy rate recorded in 2008, with the rate below one per cent now for two consecutive years and holding steady at its lowest level since 1980. The vacancy rate was one per cent or lower in every zone within the St. John’s area this year. The biggest change was within Remainder of Metro Area (zone 3), with a rate of 0.3 per cent compared to 0.8 per cent in 2008. St. John’s East (zone 1) posted a vacancy rate of 0.9 per cent versus 1.0 per cent last year. In St. John’s West (zone 2), the vacancy rate was 1.0 per cent compared to 0.7 per cent in 2008. St. John’s City (zones 1-2) posted a vacancy rate of 0.9 per cent versus 0.8 per cent a year earlier. Throughout the St. John’s region, vacancies remained highest in bachelor units at 1.5 per cent and lowest in three bedroom units at 0.4 per cent. The recorded vacancy rate for one and two bedroom apartments was 0.8 per cent for both. Average rents increased across the region for all bedroom types in 2009. The following percentage changes in average rent are based on the fixed sample, which includes structures common to the survey for both years (2008/2009). Bachelor unit average rents increased the most of all bedroom types at 6.2 per cent; one bedroom average rents increased 5.7 per cent; two bedroom unit average rents were up 4.9 per cent; and three bedroom rents increased 5.4 per cent. Overall, the total average rent for all bedroom types combined, advanced 5.5 per cent.

Based on the 2009 survey, bachelor unit average rents were $541; one bedroom average rents were $592; two bedroom units posted average rents of $677; and three bedroom rents came in at $713. Overall, the total average rent for all bedroom types combined was $643. The increase in average rents is a reflection of the upward pressure very low vacancies have exerted on rents since 2008, as well as increasing energy costs and the increased costs associated with operating and maintaining apartment buildings. Once again, current rent levels prevented the construction of multi-unit rental projects in 2009, making the rent/return equation uneconomical for developers and real estate investment trusts (REITs). This has been the situation for more than 20 years within the local rental market. However, local rental market dynamics have been changing, with fewer private owners and increasing corporate ownership. The buoyant St. John’s economy and housing market has seen these corporate entities become increasingly interested in the local rental market. In fact, they have purchased many apartment buildings in recent years. The expectation is that these and other players will engage in new multi-unit apartment building construction activity in the coming years, once average rents reach a point where project development becomes feasible.

The local rental market is driven by a number of factors. These factors have remained fairly constant over time and involve both demand and supply influences. Key factors affecting the demand dynamics for rental accommodations over the short term include economic activity, employment, migration trends and the home ownership rate. The supply side of the local rental market is affected by additions to the rental stock via new construction or conversion of existing space into apartments. Apartment supply can also be reduced by conversion activity when existing rental units get converted to condos or hotels. On rare occasions, demolition of apartments for alternate site use or loss due to fire may also diminish the supply of rental units. While CMHC’s rental market survey historically covered structures containing three or more apartment units only, both demand and supply has always been affected by competition from the secondary rental market (newly surveyed since 2007). This market consists of single-detached units; semi-detached, row and duplex units; and other- primarily accessory suites. Statistics for secondary rented units exclude apartments in purpose built rental structures with three rental units or more, condo apartments, units in institutions, and any dwelling whose type could not be identified in the survey. The estimated number of households in secondary rented units within the St. John’s CMA is quite substantial at 12,896, with an average rent of $653 compared to $618 in 2008. Refer to tables 5.1 and 5.2 for additional details regarding secondary rental market survey results.

After two years of sharp declines, and coming off from a decade of annual housing starts largely above demographic needs, new housing construction is set to stabilize in 2009. Amid emerging positive signs in both the economic and financial fronts, total residential construction in the Kingston Census Metropolitan Area (CMA) will rise by 5.2 per cent this year, with 707 new starts.

In addition to the boost to homeownership demand due to low interest rates, the prospects for increased spill-over demand from a recovering resale market will likely result in a faster year-over-year pace of starts during the first half of 2010. As a result, total starts next year will reach 690 units for a slight 2.4 per cent decrease, thus stabilizing construction activity at a pace more in line with household formation.

Coming off from a historically challenging economic environment, the short-term forecast for Kingston’s residential construction industry remains for the most part optimistic. The substantial monetary easing and fiscal stimulus measures in Canada’s Economic Action Plan will improve economic fundamentals. This will renew household’s appetite for big-ticket items in the face of low interest rates.

While spill-over demand from the resale into the new home market typically takes time to fully materialize, Kingston’s new home market looks ripe for a modest recovery. First, new listings for resale have declined substantially from last year, thus lowering supply competition. Second, the level of unabsorbed new home inventories has returned below the long-term average. Finally, the year- to-date pipeline of properties under construction is substantially lower than for the same period last year, which means that there are resources available for future projects.

The CMHC forecast calls for 900 single-detached starts in 2009 followed by 1,000 in 2010. The 2009 production will be the lowest number of single starts since 2005 when there were 751 foundations poured. The decline in single-detached starts in 2009 compared to 2008 is due to a number of factors, including managing a build-up in the supply of new housing units, consumer resistance to price escalation, and heightened competition from resale housing. Reduced in-migration and a moderating economy in 2009 have also played a role in this market adjustment.

At mid-year, single-detached starts were 65 per cent below the historically high 2008 figure for the same period. The slowdown in new construction has allowed the inventory of complete and unabsorbed units to decline and a stronger second half of production is expected. At the end of August, single-detached starts had recorded two consecutive months of year-over-year increases. Though there has been a recent uptick in starts activity, CMHC expects builders will limit production to prevent a rise in inventory.

In terms of total supply, there were more than 800 single-detached units under construction or completed but unoccupied at the end of August. While this is the third highest supply on record for the month of August, total supply has been in decline, on a year-over-year basis, since December 2008.

The bulk of single units in supply are those in various stages of construction. The units under construction have been declining on a year-over-year basis since October 2008. The decline in the units under construction figure is due to slower starts since June 2008. As stated, only recently have starts increased on a year-over-year basis.

The number of single units that are completed and unoccupied now lies at 142 units, up from 115 one year earlier. Though higher than last year at this time, the completed and unoccupied count has seen monthly declines since December 2008 when inventory peaked at 244 units. Competition from the resale market may be having an impact on new single absorption. Industry sources state that investors who purchased new homes in the previous two years are now creating competition for homebuilders by listing their homes on the resale market at competitive prices.

To the end of August, there have been 757 single absorptions in 2009 compared to 819 at this time in 2008. Average absorption now stands at 95 units monthly compared to the 110 units absorbed monthly in 2008.

Provincially, the labour force and employment are expected to rise moderately in 2010, while in Halifax, growth is expected to be more significant. Halifax will continue to see steady growth in the economy and this will translate into improving conditions in the local housing market.

The local economy in Halifax continues to benefit from positive migration patterns. With more people moving to Halifax than moving away, the labour force has been growing. Almost every month of 2009 saw greater numbers of people looking for work in Halifax and by the summer months there were more people looking for work than ever before. Fortunately, most of these job seekers found employment which resulted in a record level of employment in Halifax. Employment was up by three to four per cent in 2009 compared to 2008. Employment may ease off of record highs during certain months in the forecast period, however overall employment is expected to continue to show positive growth in 2010.

Employment is being bolstered by the construction industry and the public sector. Large construction projects and large military contracts have contributed to strength in these industries. The largest employment sector in Halifax is the services sector which has seen slow but steady growth of approximately three per cent so far in 2009. The opening of some new or trendy retail stores has contributed to the growth in this sector. Areas experiencing weakness are the finance, trade and primary goods sectors which are struggling due to global economic issues and reduced demand for exports. Wages are also expected to continue to move upwards. As of August 2009, seasonally adjusted average weekly earnings have risen by over six per cent compared to the 2008 average. Average earnings now exceed $39,000 per year compared to just under $37,000 in 2008.

Record employment levels and wages  will be supportive of housing activity in Halifax for the remainder of 2009 and 2010. Continued in-migration and near historic low interest rates will also contribute to increased housing demand in the Halifax Regional Municipality (HRM). In the near-term, some lingering effects of the weakened economy will keep demand subdued. In the medium- term, however, expect to see demand and activity begin to increase again in 2010.

The Bank of Canada cut the Target for the Overnight Rate in the early months of 2009. The rate was 1.50 per cent at the start of 2009 and has since fallen to 0.25 per cent. The Bank has committed to keeping this rate at 0.25 per cent through the middle of 2010 unless inflationary pressures warrant an increase.

Mortgage rates have fallen over the course of 2009, but are now expected to remain relatively stable for the rest of the year. Posted mortgage rates will gradually increase through 2010, but will do so at a slow pace. For 2010, the one-year posted mortgage rate will be in the 3.50-4.25 per cent range, while three and five-year posted mortgage rates are forecast to be in the 4.50-6.00 per cent range

“The Government of Canada is helping make affordable housing available in Saskatchewan and across Canada for those who need it most,” said Maurice Vellacott, Member of Parliament for Saskatoon – Wanuskewin, on behalf of the Honourable Diane Finley, Minister of Human Resources and Skills Development Canada and Minister Responsible for Canada Mortgage and Housing Corporation (CMHC). “Through this investment we are stimulating the local economy and creating jobs. We are also making an important difference in the lives of individuals and families in Saskatoon who are working towards building a stronger and better future for themselves.”

“As our population ages, there is a growing need for quality, affordable housing that will allow seniors to continue to live in their communities with dignity and independence,” said MLA Joceline Schriemer, MLA for Saskatoon – Sutherland, on behalf of the Honourable Donna Harpauer, Minister of Social Services and Minister Responsible for Saskatchewan Housing Corporation. “Projects such as Bethany Manor help meet that need, as well as contribute to healthy communities and healthy neighbourhoods.”

“Bethany Manor means so much to the seniors in Saskatoon,” said Mayor Donald Atchison. “It provides affordable housing to a very important target population as identified in the Saskatoon Community Plan on Homelessness and Housing. We are all partners in keeping our seniors safe, secure, and active in our community.”

Located at 210 Pinehouse Drive in the Lawson Heights area of Saskatoon, Bethany Manor consists of 56 one- and two-bedroom life-lease and affordable rental housing units for low and moderate-income seniors in a supportive setting. The project was undertaken by Saskatoon Mennonite Care Services Inc., a community-based non-profit corporation established in Saskatoon in 1981.

The building’s innovative geothermal heating and cooling system, worth approximately $1.1 million is expected to save approximately $100,000 a year in utility and operational costs. The environmental impact in terms of greenhouse gas will mean a reduction of almost 3 million kilograms of carbon dioxide annually.

The total cost of the project is approximately $7.7 million. Of that amount, $2.8 million in funding was provided to assist in the construction by the federal, provincial and municipal governments: $1.4 million from Canada Mortgage and Housing Corporation; $1.1 million from Saskatchewan Housing Corporation, and $280,000 from the City of Saskatoon. The funding balance consists of land, equity, in-kind contributions, equity from occupants and mortgage financing.

In 2008, the Government of Canada committed more than $1.9 billion over five years to improve and build new affordable housing and to help the homeless. Canada’s Economic Action Plan builds on this with an additional one-time investment of more than $2 billion over two years in new and existing social housing, plus up to $2 billion in loans to municipalities for housing-related infrastructure.

“Economic uncertainty and lower levels of employment tempered new housing construction in the first half of this year”, said Bob Dugan, Chief Economist for CMHC. “In the second half of 2009 and in 2010, we expect housing markets across Canada to strengthen.”

Improving activity on the resale market and lower inventory levels in both the new and existing home markets are expected to prompt builders to increase residential construction.

Existing home sales, as measured by the Multiple Listing Service (MLS®)¹, have rebounded strongly since January and will reach 420,700 units in 2009 and remain close to that level at 419,400 units in 2010. The average MLS® price is expected to moderate to $301,400 in 2009 and to increase to $306,300 in 2010.

As Canada’s national housing agency, CMHC draws on more than 60 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 vital decisions.

* The forecasts included in the Housing Market Outlook are based on information available as of July 23, 2009. Where applicable, forecast ranges are also presented in order to reflect economic uncertainty.

¹ The term MLS® stands for Multiple Listing Service and is a registered trademark of the Canadian Real Estate Association (CREA). Data are for 10 provinces.

Information on this release:

Charles Sauriol
CMHC Media Relations
613-748-2799

National Housing Outlook

Key Housing Market Indicators

Provincial Housing Outlook

Total Housing Starts

According to Calvin Lindberg, President of CREA, “We are caught in a cycle where consumer confidence has been eroded because of job losses, and consumer confidence is an essential ingredient for housing sales activity.” However, it must be recognized that life goes on, and people will always need to upsize, downsize and move homes for any number of reasons. Because of the current market climate, sellers must acknowledge that it’s more important than ever to emphasize and maximize the positive features in their sales presentation.

Mr. Lindberg makes a practical observation about today’s real estate market by noting that: The essential selling ingredients in today’s market are realistic pricing, marketing and preparation. The se crucial points are where an experienced real estate sales representative makes all the difference.

As your real estate representative, I have my finger on the pulse of both countrywide housing trends and local real estate activity. I invite you to call me for help with all your real estate needs.

http://www.free-press-release.com/news/200907/1246980126.html

reviewed by Moishe Alexander, CFC CEO

OTTAWA – June 15th, 2009 – National resale housing market activity returned to pre-recession levels in May 2009. The rebound in activity is being led by an increase in transactions in some of the most expensive markets in the country, which is skewing the national average price upward.

According to statistics released by The Canadian Real Estate Association (CREA), actual (not seasonally adjusted) home sales via the Multiple Listing Service® (MLS®) of Canadian real estate boards totaled 49,521 units in May 2009. This is less than one per cent below activity in the same month one year ago. Year-over-year declines have been shrinking since the beginning of the year.

The seasonal increase in activity continues to be stronger than normal. As a result, seasonally adjusted home sales rose eight per cent to 37,649 units in May compared to April. This marks the fourth consecutive monthly increase in seasonally adjusted activity. Seasonally adjusted activity in May was 43 per cent above where it stood in January 2009.

Seasonally adjusted sales were up on a monthly basis in about 70 per cent of local markets. Monthly activity gains in Toronto (nine per cent), Calgary (25 per cent), Montreal (10 per cent), Vancouver (eight per cent), and Edmonton (12 per cent) contributed most to the overall increase in monthly activity.

The national MLS® residential average sale price in May 2009 reached the highest monthly level on record. At $319,757, it was up fourth tenths of a percentage point from the previous record set in May 2008. Over the past four months, the national MLS® residential average price has recovered 16.4 per cent from the low in January. The average price for MLS® home sales climbed to new heights nationally, and in Saskatchewan, Ontario, Quebec, New Brunswick, and Nova Scotia. New records were posted in only 15 per cent of local markets in May, none of which are among the most active or expensive. The strong rebound in sales activity, not price, in Canada’s most expensive markets is driving up average prices nationally and in some provinces, just as a sharp decline in activity in these markets pushed average prices lower in late 2008.

The supply of homes coming onto the MLS® market continued to decelerate in May. Seasonally adjusted MLS® residential new listings edged lower by eight tenths of a percentage point to 65,070 units, the lowest level since December 2005. Seasonally adjusted new residential listings in May were 19 per cent below the peak reached one year ago.

With the number of sales rising strongly and new listings trending downward, the balance between supply and demand is firming up in British Columbia, Alberta, Saskatchewan, Ontario, and Quebec. This resulted in national sales activity as a percentage of new listings reaching the highest point since December 2007. Residential dollar volume for MLS® sales climbed 10 per cent from the previous month to reach $11.4 billion in May. This is more than 50 per cent above the low of $7.5 billion reported last January.

“Sales activity is now closer to the pre-recession peak than it is to the recent low point reached last January,” says Regina Broker Dale Ripplinger, President of The Canadian Real Estate Association. “Strengthening consumer confidence, low interest rates, and improved affordability are drawing buyers to the housing market across Canada,” he added.

“Fueled by a string of monthly increases in activity, the number of transactions in May reached the highest point since July 2008,” said CREA Chief Economist Gregory Klump. “Inventory levels are still high in many markets, but fewer new listings and rising sales activity suggests that the selection of homes available for sale may shrink as the year progresses. The supply of homes up for sale needs to be drawn down further before average price increases become more widespread among local markets.”

PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month. The Canadian Real Estate Association has previously released these separately.

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighborhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.

MLS® is a co-operative marketing system used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 96,000 REALTORS® working through more than 100 real estate Boards and Associations. Further information can be found at www.crea.ca

“Good news for the market in ON”, – Moishe Alexander, CFC CEO