Moishe Alexander and Canadian Funding Corporation Review CMHC Reports

January 13, 2009 — Moishe Alexander’s review on how the current world economy and Canadian economic turndown is affecting the Kelowna BC housing market

The Kelowna British Columbia Housing Market in new home sales is taking a downturn from the record levels 2008. However, the housing market in Kelowna will start to recover in the latter part of 2009. The Canada Mortgage and Housing report that was released in the fourth quarter of 2008, shows a graph of the housing starts both ups and down in the Kelowna British Columbia market.

HOUSING STARTS DROP IN 2009

The Canada Mortgage Housing Corporation reported that housing starts will dip to 1,850 home in 2009. This reduction in housing starts will also cause the lot prices for new housing to drop from $235,000.00 to approximately $180,000.00 per lot commencing from the latter part 2009, which some premiums for Lake Valley lots with any sort of view for the Better Lake region.

With the demand that was previously high, the average time to build a detached home has increased over the past 8 years in Kelowna, from 4 months to just over 9 months. The average price for a new detached home in Kelowna B.C will reach $695,000.00, which is a 10% increase over 2008.

EXISTING HOME SALES STABILIZE IN 2009

The Kelowna British Columbia housing market, like other housing markets in Canada, experience extreme growth in 2007. However, there was a 1/3 decline in housing sales in the latter part of 2008. However, it is predicted in 2009 by Canada Housing Corporation that the sales will stabilize in 2009 and actually start increasing in the latter part of 2009.

ECONOMIC AND EMPLOYMENT GROWTH MODERATE IN 2009

The economic and employment outlook for growth in the Kelowna British Columbia area is predicted to be moderate in 2009, by the Canada Mortgage Housing Corporation, in their fourth quarter report in 2008.

However, the incorporation of Westbank, and all other neighborhoods located on the west side on Lake Okanagan will generate substantial economic and employment growth throughout all of 2009. In fact, Canada Mortgage and Housing Corporation predicts that area employment in Kelowna B.C will grow by 3.5% in 2009, with new jobs being added in the high-tech, trade, healthcare, personal and other service related industry sectors.

Kelowna British Columbia is one of the few regions that is experiencing a shortage of workers, and is attempting to implement policies to encourage migration.

MORTGAGE RATES

Canada Mortgage and Housing Corporation predict that interest rates will decline by a further 25-50 basis points from their current levels in 2009. However, due to the cost of borrowing to the Canadian banks from the markets, the mortgage interest rate will marginally increase in the latter half of 2009, but not significantly enough to negatively affect the housing market in Kelowna.

You can find the entire report in PDF format through the following link:
http://www.cmhc-schl.gc.ca/odpub/esub/64359/64359_2008_B02.pdf

Tags: Alexander, B.C, British Columbia, Canada, canadian funding corp, canadian funding corporation, CMHC, Corporation, employment, growth, home, housing, kelowna, Lake Okanagan, Lake Valley, lot, Market, Moishe, moishe alexander, Mortgage, Outlook, part, quarter, Report, review
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