The seasonally adjusted annual rate of housing starts reached 158,500 units in November. This is an increase from 157,400 units started in October, according to Canada Mortgage and Housing Corporation (CMHC).

“The improvement in housing starts continued in November,” said Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre. “Despite a small decline in November’s multiple home construction, overall starts numbers were up due to a solid increase in singles starts.” The November total is the highest of the year.

The seasonally adjusted annual rate of urban starts increased by 0.7 per cent to 141,100 units in November. Urban multiple starts decreased slightly from 72,500 units in October to 71,300 units in November. Single urban starts increased by 3.4 per cent to 69,800 units in November.

November’s seasonally adjusted annual rate of urban starts increased by 10 per cent in Quebec, by 8.2 per cent in the Prairies and by 6.2 per cent in British Columbia. The rate of urban starts decreased by 8.3 per cent in Ontario and by 9.8 per cent in Atlantic Canada.

Rural starts were estimated at a seasonally adjusted annual rate of 17,400 units in November.

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 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.

Net migration is forecast to be negative in 2009 in the Windsor CMA. More people have moved away from the area each year since 2004 than have relocated to Windsor. This is expected to continue in 2010 with a net loss of nearly 1,400 people. The first impact can be seen in the rental market as renters are more mobile than owners.

In the rental market the average apartment vacancy rate in Windsor was 14.8 per cent in October 2008 and is expected to remain high in 2009. Contributing to the high vacancy rate are several factors such as higher unemployment among youth, out-migration in search of employment, and competition from homeownership. The average two bedroom apartment rent is forecast to remain flat in October 2009, as landlords refrain from raising rents in an effort to retain existing tenants.

The Windsor-Essex area is marketing the region abroad to boomers and retirees as an exceptional place to live. Visitors and residents extol the many recreational opportunities, affordable housing and temperate climate of the area in the hopes of attracting new residents.

Employment is a key factor supporting housing demand. Windsor’s employment levels have not dropped as sharply as anticipated. The area may be able to get through 2009 with less than a five per cent decline in jobs. However, combined with losses over the past couple of years the workforce has shrunk by almost eight per cent since 2006. Continuing economic weakness in the U.S. and the appreciating value of Canadian dollar are ongoing challenges for the manufacturing and tourism sectors. In turn this has had a detrimental affect on local consumer spending.

The economy has been slow to diversify, however some inroads are appearing. Interest in alternative green energy such as wind and solar are providing new manufacturin opportunities.Non-residential construction employment will grow in 2010 due to investment in major capital projects in the area.

Total housing starts in New Brunswick are expected to see a
moderate rebound to 3,525 units in 2010 following a decline to 3,400 units in 2009, according to
Canada Mortgage and Housing Corporation’s (CMHC) Housing Market Outlook released today.
“Following an expected reduction in MLS® sales and residential construction throughout 2009, a
moderate increase in activity is expected next year in New Brunswick,” said Claude Gautreau,
CMHC’s senior market analyst for New Brunswick. Although housing activity has diminished in
2009, economic fundamentals in the province remain strong, highlighted by historically high
employment levels. These conditions are expected to persist over the forecast period.
In New Brunswick’s three large urban areas – Saint John, Moncton and Fredericton – residential
starts will trail last year’s pace to the end of the year, followed by a moderate rebound in 2010.
The existing home market is expected to follow the same general trend with stronger price
growth next year and increased sales.
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.

In-migration and low mortgage rates will lend
strength to the housing market this year and next. Residential construction is expected
to rebound in 2010 following declines in 2009, according to Canada Mortgage and
Housing Corporation’s (CMHC’s) Housing Market Outlook released today.
“Single starts in Charlottetown are expected to record an increase in 2010, while
multiple starts will slow slightly from the near record level of activity in 2009,” said Jason
Beaton, market analyst with CMHC in Prince Edward Island. Positive in-migration and
low interest rates will be supportive of housing demand in both 2009 and 2010. As a
result housing starts are expected to remain strong into 2010. Single-detached
construction will reach 275 units in 2010, while multiples construction will slow to 240
units.
Existing home sales are expected to decline this year before rebounding slightly in 2010.
Expect to see 550 units sell in 2009 and 575 units in 2010. The average price of an
existing home is expected to climb to $186,000 by the end of next year.
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.

Resilient consumer spending, large capital projects
and improved employment will continue to support the St. John’s region housing market
throughout the remainder of 2009 and in 2010, according to Canada Mortgage and
Housing Corporation’s (CMHC’S) Housing Market Outlook – St. John’s report released
today.
Housing starts are expected to end 2009 at 1,675 units, with 1,800 starts forecast for
2010. The resale or MLS®1 market will post 3,450 sales by the end of this year and reach
the 3,575 level in 2010. The average MLS® house price is expected to end 2009 at
$215,500 compared to $187,571 in 2008 and increase to $225,500 in 2010.
“Despite the recent global economic uncertainty, strong fundamentals will continue to
support demand for housing throughout the remainder of 2009 and in 2010,” said Chris
Janes, senior market analyst with CMHC in Newfoundland and Labrador. “Overall, the
positive outlook for the St. John’s area housing market will be reinforced by favourable
trends in demographic and economic fundamentals, as well as on-going economic
momentum fuelled by a lengthy list of major capital projects,” added Janes.
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.

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.

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reviewed by Moishe Alexander, CFC CEO