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HOUSING MARKET OUTLOOK Winnipeg

Comments: 0November 5th, 2009 by admin

Posted by Moishe Alexander

New home construction in the Winnipeg CMA will move upward in 2010 following a slower year for builders in 2009. Local builders are on pace to start 1,925 homes in 2009, a decline of 36 per cent from 2008, before production will move up 25 per cent to 2,400 units in 2010.

To the end of September 2009, total starts are 33 per cent below the same period in 2008, with 1,504 foundations poured compared to 2,247 during the first nine months of 2008. This reduction has been a response to elevated inventories in both the single-detached and multi-family markets as well as a lower level of demand created by the economic uncertainty that existed over the first half of the year.

Given demographic patterns in the Winnipeg CMA, both 2009 and 2010 will see the rate of household formation in the city surpass housing starts. Lower starts to adjust for heightened inventories are necessary to bring levels in line with long term averages and the new home market into balance again.

The single-detached sector will finish 2009 with 1,425 starts, down more than 26 per cent from 2008. Activity will rebound in 2010 when 1,600 starts will be recorded, 12 per cent more than 2009. Price growth will remain positive, but modest, with the New House Price Index rising 2.5 per cent in 2009 and 3.0 per cent in 2010.

While the number of single-detached units under construction has recently moved slightly below the ten-year average at 691 units, the number of complete and unabsorbed units remains high by historical standards at 199 units. That compares to a ten-year average of 169 units. Nonetheless, the decline in starts earlier in the year has allowed for the absorption of many complete and unabsorbed units, which reached their peak of 301 units in November of last year. Despite the recent decline in inventory, builders have been hesitant to start new spec units given current market conditions.

The challenges faced by builders in 2009 are underscored by the 1,053 single starts recorded through September, a decline of 28 per cent from the same period in 2008.

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Posted in CMHC, Canada, Housing Market, affordable housing

Posted by Moishe Alexander

Comments: 0November 5th, 2009 by admin

Posted by Moishe Alexander

CMHC forecasts total housing starts of 850 units in 2009 and 950 units in 2010. Expect 550 new single-detached homes to break ground in Regina this year, 44 per cent off the 22-year high of 979 units in 2008. Single-detached starts will rise to 600 units in 2010, a nine per cent lift from 2009.

Higher new home inventories and competition from the resale market have prompted builders to scale back construction this year. Demand for new homes is slower due to double- digit price growth in the past two years. Economic uncertainty has also played a role in reducing demand this year. With new home supply past its peak and inventory stabilizing by 2010, builders will drive production up by over nine per cent from 2009 levels. Stable prices, persistently low mortgage rates, and economic growth will also encourage the purchase of new homes.

Seeking to contain inventories, Regina builders started only 337 single-detached homes to the end of August, down 49 per cent from 2008 at this time. As a result, the level of single-detached units under construction declined 23 per cent compared to August 2008. Despite slower starts, the 677 singles under construction this August represent the second highest volume of single units underway for that month since 1984.

As demand has cooled and completions have picked-up, 44 completed single-detached homes remained unsold this August, 42 per cent more than one year prior and the highest August inventory of unsold units in eight years.

Given an average absorption rate of 70 singles per month, it will take the market about 10 months to deplete the 721 single-detached homes in supply this August. One year earlier, the 908 single-detached homes that were in supply could sustain the market for about 15 months, as it was absorbing an average of 60 single-detached units per month. Although market conditions are improving and moving toward balanced conditions, the market is still favouring buyers. Share of starts in

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Posted in CMHC, Canada, Ontario, moishe alexander

Vancouver Highlights

Comments: 0November 3rd, 2009 by admin

Posted by Moishe Alexander

Home sales will continue at a brisk pace through the remainder of this year and into 2010. More sales combined with fewer active listings will push the average MLS® home price higher in 2010.

Home starts will pick up over the next 15 months, but remain below levels recorded in recent years. The upturn in the resale market will contribute to an increase in home starts as builders see demand returning to the market. New and resale home inventories are being absorbed, providing an incentive to start new residential projects.

Steady population growth through migration, an improving job market and low mortgage rates will provide support for homeownership demand through 2010.

Housing market conditions in Greater Vancouver1 will favour home sellers into the first half of next year. The recovery of home sales that began during the spring and summer months will continue into 2010. Home sales ramped up during the past few months due to lower home prices and low mortgage rates. These two factorscombined with increasing real wages, have meant improved affordability for home buyers. While home prices are rising, continued low mortgage rates into mid 2010 will keep home buyers active. Home sales in the first few months of 2010 may be below average, as transportation route changes associated with the Olympic Games hamper mobility.

The number of active resale listings will be near the five-year average level next year. After peaking in fall 2008, active listings have trended lower. While the flow of new listings entering the market has been increasing, high sales levels have kept the total stock of active listings dwindling in recent months. The recent upturn in home prices may draw more sellers to the marketincreasing the supply of homes for sale. Look for more balanced market conditions to prevail in the second half of 2010.
Home prices in most Vancouver

municipalities will continue to trend up in 2010, but at a modest pace of two to four per cent. Home prices hit their lowest point in March of 2009, having fallen 17 per cent from their peak level. In just six months, thaverage price in Greater Vancouver saapproximately two per cent below thpeak value. However, the recovery in home prices has been uneven across the region. While prices in the City of Vancouver have already surpassed the previous peak, prices in other centres remain well below peak levels(see figure 2). These centres with prices still below peak, will see prices trending up over the next 15 months, as buyers take advantage of lower prices and favourable mortgage interest rates.

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Posted in CMHC, Canada

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