The slackness in the resale market coupled with the slowing economy will directly impact the new home market. Single-detached starts will fall to 190 units in 2009 and 180 in 2010, as the market comes more into line with long-term demographic requirements. CMHC expects 210 row, condominium and apartment starts in 2009 and another 160 in 2010.

After rising 4.3 per cent and 5.5 per cent respectively in 2007 and 2008, the New Home Price Index for Sudbury-Thunder Bay will rise in 2009 and 2010 but only modestly given the slowdown in demand.

Developers have plans for condominium development in 2010. Pricing will be very important as this product is primarily targeted at empty nesters who do not typically want to pay more for a condo that what they obtain from the sale of a homeownership unit.

As is well known, the vacancy rate has fallen from a peak of 11.1 per cent in 1999. A tight market partially brought on by a lack of new rental construction and demand pressure has finally resulted in some development of rental housing in Greater Sudbury. Vacancy rates rose slightly in April and will also increase this October before falling again to 1.3 per cent in 2010 as the economy begins improving. Strong enrolment figures at the three Sudbury-based post-secondary institutions will contribute to the tight market conditions. Rents should continue to escalate in 2009 and 2010 given continued strong demand for rental accommodation.

After plateauing in 2006-2007, Sudbury sales fell 13 per cent in 2008 and have fallen a further 26 per cent to the end of September. Sales will certainly continue this downward trend in 2009. Given the buyer’s market conditions, CMHC estimates a 27 per cent drop in existing home transactions when the year is complete. Sales will drop a further six per cent in 2010 as the market moves towards a balanced position.

The sale to new listings ratio, an indicator of the existing home market behaviour, is improving. After growing in the third quarter, Sudbury’s market will keep an upward trend, increasing its temperature. CMHC expects this ratio to end the year approaching 50 per cent, indicating that prices will adjust all the way into next year.

According to local sources, demand is greatest in the price ranges under 200,000 while the upper end of the market (>$400.000) has not been greatly affected. Prices have been falling since mid-year 2008 after rising to unsustainably high levels over the prior four years. The price decrease will continue into 2010 but will be tempered by falling listings. Watch for average prices to fall 5.5 per cent in 2009 and level off in 2010.

Given the adjustment in home prices, there has been improvement in required income to purchase a home. Unfortunately, with the slowing economy, the adjustment to incomes has been stronger. As a result the net impact on affordability will decrease somewhat in 2010 after improving in 2009. Nonetheless, there are buyers in the market searching for lower priced homes.

Greater Sudbury has experienced a strike at Vale Inco, one of the biggest mining companies in the community. Consequently employment will decline 1.2 per cent in 2009 and recover only slightly, 0.5 per cent in 2010. The combination of job loss and labour force growth have caused the unemployment rate to head north, and will approach on average nine per cent this year and next.

After an increase of nearly nine per cent in 2008, average weekly earnings will drop this year declining three per cent and fall a more modest 0.5 per cent in 2010. Removing a relatively high proportion of mining and mining- related incomes from the mix would have had a downward impact on average weekly earnings over the course of this year.

In the short term local economic uncertainty will impact housing demand. However, the current commodity price rebound will form a solid long term foundation for growth in the broader Sudbury economy. Despite the current weakness in the Sudbury economy, some economic development plans are still moving ahead.

Migration has been positive of late, while natural increase is trending down. In-migration will trend downward in 2009 and 2010 prior to recovery in 2011. Mining workers affected by work stoppages may contemplate relocating if the national economy begins to improve, generating opportunities elsewhere.

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.

Employment in the Charlottetown area is forecast to post a slight decline this year before posting a moderate increase in 2010. During the first three quarters of 2009, the decrease in employment in Charlottetown was dispersed among all industries except the public service sector, which posted a small increase. Despite the modest declines in employment in 2009, the capital region remains attractive for job seekers compared to other parts of the province. This fact has lead to the continued trend of urbanization, as Islanders continue to move to the capital region from more rural parts of the province.

Positive net-migration is one of the key factors that has contributed to the strong housing market over the past seven years. As of July 2009, the population of Prince Edward Island was estimated at 140,985; an increase of 1,534 persons or 1.1 per cent from 2008. While this increase in population was the result of both a natural increase and positive net migration, the vast majority was the result of the latter. From July 2008 to July 2009, 1,793 international immigrants chose the Island as their new home, which is the highest annual level since recording began in 1971. The main reason for this substantial increase in international migration was the increased effort that the province has allocated to this initiative. The results seen in 2007 and 2008 are expected to be the start of a new upward trend in international migration with preliminary data for 2009 indicating that the year could end up showing an even larger inflow of people. The local housing market is benefitting from this initiative as many of these households are relocating to the capital region, and as such require housing within all tenure types. While the aforementioned data

While the aforementioned data on immigration is positive, it is for the province as a whole. It is important to note that the capital region consistently outperforms the province. For the last census period ending in 2006, the Charlottetown CA, which encompasses the entire urban area around the city, recorded a population growth of 1,391 people or 2.4 per cent. While there was some natural population growth during this period, the majority of the increase was due to in-migration. For the Charlottetown area it had been typical that about 70 per cent of the people moving to the capital region came from elsewhere in the province, while the remainder were from other regions of the country. This ratio had remained fairly constant since the early 1990′s, but since 2006 it has started to change. The reason for this is twofold, with both the movement of people to the west and the recent influx in international immigrants. As earlier referenced, the influx of international immigration is expected to end up being even stronger in 2009 than 2008, due to the popularity of the province’s programs with new immigrants. This will especially benefit the capital region as the majority of the people are settling in the area. This trend should continue to bolster the local housing market over the forecast period, as the population continues to grow.

As a result of the aforementioned market forces, the Charlottetown housing market is expected to exceed the level set in 2008. Although single starts in Charlottetown recorded a decline so far in 2009, multiple starts at the end of the third quarter are on track to have the strongest year since 1988. Single starts are expected to decline 25 per cent in 2009, when compared to 2008. This decline was expected, as many potential homeowners are taking a wait and see approach, before making any large purchases. In addition, single home construction in Charlottetown posted seven years of impressive growth that mirrored the national trend. As such, the decline in 2009 is seen as the market returning to a more sustainable level. In contrast to the decline in singles, multiple starts will end the year close to setting a new record high. The strength in multiple starts is the result of several factors. The increase in multiple unit starts also created a situation where there was a temporary oversupply of rental units that was not fully absorbed until the end of 2007. However, one area where new construction has continued to remain strong is multiple units intended for homeownership. A key reason for the increased activity in this part of the market is the relatively lower cost of semi-detached and row units compared to single-detached homes. Despite the forecasted increase in semi-detached units over the next two years, it is expected that the overall housing market will remain strong during the forecast period. 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.

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.

New Home Construction Not as Robust as Before New home construction in Barrie will come in at a lower tally than last year. Single-detached homes will continue to make up the majority of a smaller new construction pie. Next year, new construction will increase from this year, as the economy begins to improve. From 2010 to 2013 new housing construction will grow at a relatively subdued level. With less demand for new housing, the average price of a newly constructed single- detached home will decrease.

The number of new housing starts is expected to come in significantly lower this year than last year’s total tally. Total starts in Barrie Census Metropolitan Area (from here on referred to as CMA) will come in at 340, less than a quarter of the homes built in 2008. Next year total starts will begin to improve and come in at close to 390 units. Currently, the number of homes under construction and inventories of new unsold homes are both declining. Consequently, improving demand next year will translate into starts fairly quickly.

Even though apartments, and to a lesser degree row homes, are expected to be significant components of all new construction in the CMA, single-detached homes will continue to be the most preferred type of housing built in Barrie. Single- detached starts will make up close to 61 per cent of all new construction this year in the CMA while apartments will make up close to 27 per cent and row homes 12 per cent. Looking forward, the recovery is expected to be slow. With lower new housing demand, as a result of the economic downturn, and the slow recovery, the average price of a new single-detached home is expected to drop from last year and finish this year at $340,000 a drop of five per cent. In 2010, as recovery strengthens the average price of a new single-detached home will be negative but by a much lesser margin than this year. Resale Homes Market Resale Market Relatively Unscathed by Downturn homes market will fare better this year.) The SNLR (Sales-to-New- Listings-Ratio) will remain near the upper bound of balanced market territory. The average price of an existing home will grow modestly this year and at the rate of inflation next year. Housing affordability will deteriorate slightly as modest price growth and increasing mortgage rates raise monthly carrying costs. In spite of the slight deterioration in affordability, the Barrie CMA will remain an attractive housing market when compared to other urban centres.

Both sales and new listings of existing homes will lose some strength from last year.(In comparison to the new homes market though, the existing homes market will fare better this year.) The SNLR (Sales-to-New- Listings-Ratio) will remain near the upper bound of balanced market territory. The average price of an existing home will grow modestly this year and at the rate of inflation next year. Housing affordability will deteriorate slightly as modest price growth and increasing mortgage rates raise monthly carrying costs. In spite othe slight deterioration in affordability, the Barrie CMA will remain an attractive housing market when compared to other urban centres.

Similar to the new home market, the resale home market will also feel the effects of the economic downturn. This year total existing home sales will end the year close to 3,900, a drop from last year of five per cent. In 2010, existing home sales will decrease slightly once again but by a lesser amount than this year as the market will begin showing signs of recovery and stabilization.

Housing starts in the Kitchener and Guelph Census Metropolitan Areas in 2010 will increase from the relatively low level recorded in 2009. In the Kitchener CMA, housing starts will reach 2,170 in 2010, up 12 per cent from the expected 1,930 starts in 2009. Housing starts in the Guelph CMA will increase by 16 per cent to 535 in 2010 from the forecast 460 starts in 2009. Slowly improving employment, more spill-over from the resale home market, low inventories and low mortgage rates will combine to push housing starts above the levels recorded in 2009. Starts of both single-detached and denser forms of housing will be up in 2010. Starts will move higher over the next few years, more in line with population growth and household formation.

Single-detached housing starts in the Kitchener CMA will increase by ten per cent to 1,100 homes, while Guelph CMA detached starts will grow by 10 per cent to 275 units. Although these increases in detached starts seem significant, starts will still be well below levels recorded in the first half of the decade. While the new construction market has been slow to react to the tighter resale market conditions after the first quarter of 2009, the expected spill-over demand from the resale home market will result in stronger 2010 starts. Mortgage rates will remain near historically low levels in 2010, although rising slowly throughout the year, and combined with little price growth for new detached homes, affordability will play a part in increased demand for detached homes. Inventories of new single-detached homes have not increased significantly, as was seen in the early 1990s. As a result, any demand for new detached homes must be met through new construction.

Kelowna, BC - Credit theeye, Flickr

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

Moishe Alexander’s Review

Economic and demographic: changes on the horizon

Quebec City, Quebec - Credit Zingaro, Flickr

Moishe Alexander says in 2007 and 2008, the Québec census metropolitan area (CMA) has stood out with a pace of economic growth above the rates recorded in other cities across Quebec. This performance is related to the investments in infrastructure and the city’s 400th anniversary activities. However, the regional economy will moderate; in fact, this has already started to be felt. This year, the tourism industry is benefiting from the record number of visitors to the multiple events held for the 400th anniversary of the city of Québec. The popularity of these activities is reflected in the tourism indicators: for July 2008, the number of people who contacted the Quebec tourist information centre rose by 37 per cent over the same month in 2007, and the accommodation indicators also show an increase (+13.2 per cent). In 2009, tourism will be less significant, which will reduce the economic spin-offs for the area. In 2008, the major investments in infrastructure helped generate growth in the job market. The nonresidential construction sector benefited from these favourable conditions with a strong increase in the number of jobs and hours worked in the area overall. During the first nine months of the year, 8,100 jobs were created in this sector. Several projects were completed, including the modernization of the Jean-Lesage Airport, the creation of the Espace 400e area, the construction of the Lévis Convention Centre and the Sheraton Hotel, the redevelopment of the Promenade Samuel-De Champlain and various sites of the Québec Port, the construction of several office buildings and the completion of road and municipal infrastructure projects. While activity will slow down in 2009, this sector will still benefit from investments in road, institutional and commercial infrastructure, such as the modernization of the sports facilities at the Université Laval (PEPS) and the repairs to the Charles-de-Koninck university pavilion, the pursuit of the modernization work at Robe Giffard Hospital, and the continuation of several commercial real estate projects. Residential construction also significantly contributed to job creation, as sustained activity continued in 2008. However, a setback is anticipated in this sector for 2009, on account of a downturn in the housing markets. The overall service sector is showing signs of stagnation in 2008, as the number of jobs fell by 0.1 per cent for the first nine months of the year. In fact, employment is down in wholesale and retail trade (-11.6 per cent), as well as health care (-8 per cent) and business services (-24 per cent), but on the rise in accommodation and food services (+6 per cent), professional, scientific and technical services (+28 per cent), finance, insurance and real estate (+10.5 per cent) and transport and communications (+16.2 per cent). The other service industries show relatively stable results. The gains in professional, scientific and technical services can be explained by the good economic performance in the area, the different infrastructure projects that stimulated job creation in the field of engineering and the regional strategies to develop industries and research centres related to applied technology and life sciences. Over the coming years, this sector will continue to be supported by the economic development efforts and strategies adopted by different stakeholders in the area. The finance, insurance and real estate sector also benefited from a favourable economic environment in 2008. In 2009, this sector will remain strategic for the area, given the presence of the 11 insurance company head offices. Public and parapublic services account for nearly one in three jobs in the area. The plan to reduce the size of the Quebec government will support a decrease in employment in the public service, but health and education needs, in line with political priorities, will bring about an increase in jobs for these services over the next few years. On the decline since 2007, the manufacturing sector is facing uncertain conditions and will be affected by the anticipated slowdown. In 2008, job creation in the CMA will be somewhat more modest than in 2007, with a gain between 1.2 per cent and 1.6 per cent, compared to 2.4 per cent in 2007. In 2009, job creation will continue, at a rate between 0.6 per cent and 1 per cent. The unemployment rate, which stands below the provincial average, should remain at around 5 per cent in 2008 and then rise slightly in 2009, as a result of more moderate employment growth. On the demographic front, the results are expected to show a small decrease, as the more modest growth in the job market should drive down net migration from 4,500 people in 2007 to 4,000 in 2008 and then to 3,800 in 2009. It is likely that the anticipated slowdown in the construction sector will cause an increase in emigration to areas where major projects are planned or petroleum development is under way. Household formation, for its part, will slow down among young people over the coming years but pick up in the group aged from 65 to 74 years. The number of people aged 75 years or older should also grow less rapidly. These demographic changes in the CMA will have impacts on the housing market and, more specifically, on demand and tenure. In fact, demand will be less significant in the single-detached home segment but will rise for condominiums, as they represent an interesting alternative for households wanting to lighten the burden of maintaining a house.

Mortgage rates

Moishe Alexander says mortgage rates are expected to be relatively stable throughout the last quarter of this year, remaining within 25-50 basis points of their current levels. Posted mortgage rates will decrease slightly in the first half of 2009 as the cost of credit to financial institutions eases. Rising bond yields, however, will nudge mortgage rates marginally higher in the latter half 2009. For the last quarter of 2008 and in 2009, the one-year posted mortgage rate will be in the 6.00-6.75 per cent range, while three- and five-year posted mortgage rates are forecast to be in the 6.50-7.25 per cent range.

Resale market to ease

Moishe Alexnader says sales recorded through the Service inter-agencies / Multiple Listing Service (S.I.A. / MLS)® reached a peak in 2007, with just over 8,100 transactions, for an increase of 6 per cent over 2006. The transactions volume will again be high in 2008, but the market will stabilize, with a small gain of 1 per cent. In 2008, new listings have risen, but the steady demand is still giving sellers more of an edge during negotiations. The growth in prices remains above inflation, as the average price has now reached $194,950, up by 10 per cent over 2007. The solid economic performance, the healthy job market and favourable mortgage lending conditions have contributed to maintaining a strong demand. The price level remains higher in the centre of the CMA, as the average price for single-detached houses in this sector is about $60,000 greater than the averages noted on the South Shore and North Shore (third quarter of 2008). In 2009, the increase in the number of households aged from 65 to 74 years will support a new rise in listings, since some of these households will turn to the condominium market. In addition, the decline in the formation of young households over the coming years will ease pressures on demand for starter homes. The economic slowdown will also drive down demand, but the price level will favour the existing home market, as prices are lower on this market than on the new home market. The price increases will therefore still be above inflation but will be less significant (+5 per cent) than in 2008, as the average price will reach $204,700 in 2009. It is expected that sellers will lose some of their bargaining power. Certain market segments will still remain tight, though, such as the semi-detached home segment, where prices are more affordable. For the first six months of 2008, the average selling price of semi-detached houses attained $166,500, or $43,000 less than the selling price of single-detached homes. The average time to sell is in fact shorter for semi-detached homes (53 days) than for single-detached houses (72 days), and this trend will continue. The condominium segment is not as tight, although sellers still have a slight edge. In fact, in the second quarter of 2008, the seller-to-buyer ratio was 5.6 to 1, versus 6.3 to 1 for the same period in 2007. In 2008, the new home market is following the same trend, as condominium starts are up significantly (+62 per cent). For 2009, it is expected that condominiums will again be in demand: first, their affordability is a definite asset in a context of sustained price hikes and, second, the greater number of households aged from 65 to 74 years will fuel demand for homes of this type.

Housing starts to fall in 2009

Moishe Alexander says after reaching a peak in 2004, housing starts fell in 2005 and 2006. In 2007, a small increase was observed on account of the rise in the supply of retirement housing. In 2008, starts of this type will set a new record, with the construction of close to 950 units. Likewise, the supply of new condominiums will also grow significantly (+62 per cent). These two gains will drive up the overall housing supply, bringing total starts to 5,430 units (+3 per cent) this year. In 2008, the decrease in singledetached home starts will reach 10 per cent, as rising prices and municipal intensification efforts are rather favouring semi-detached houses. In fact, this phenomenon has now been observed for several years in the CMA. In 2009, the economic slowdown, along with the formation of fewer young households and a growing supply of existing homes, will weaken demand for new singledetached houses. These factors, combined with the higher prices on the new home market, will cause starts to fall by 15 per cent in 2009. With the lower demand, prices will rise less significantly (+5 per cent). Semi-detached houses (multiplefamily housing segment), however, will remain popular among consumers, on account of their relative affordability, so starts should remain at the same level as in 2008. Starts of multiple-family (semidetached, row, condominium and rental) housing will be on the rise in 2008 but will decline markedly in 2009. This situation will be due to the decrease in demand for rental housing for seniors. In fact, not only did starts of this type set records in 2007 and 2008, but fewer people will be turning 75 years old in the near future, which will curb demand for retirement housing. This is evidenced by sharply rising inventories and a major increase in the short-term supply in August 2008. In addition, the vacancy rate is expected to climb in 2009. Condominium starts will be numerous in 2008 and again in 2009. Dwellings of this type are popular thanks to their affordable prices and to the changes in the demographic profile in the CMA. The formation of more households aged from 65 to 74 years and the appeal of this housing type, even among first-time home buyers, will keep demand strong, and condominium starts will reach close to 1,100 units in 2009. This result represents a decrease of 10 per cent from the level recorded in 2008 but corresponds to the average for the last five years. The traditional rental market is running out steam in 2008, and only small projects with 20 units or less are being added to the existing housing stock. High construction costs are limiting the development of the rental market, which remains the most affordable housing market segment. In 2009, starts should remain below the average for the last five years. Demand in this segment is coming mainly from newcomers to the area, as household formation among people aged less than 35 years will be slightly negative in 2008 and 2009.

Rental market: no easing in the short term

Moishe Alexander says the last time the traditional rental housing market was relatively softer dates back to 1998, when the vacancy rate stood at 3.3 per cent. At the beginning of the current decade, the rates reached levels of 0.3 per cent and 0.5 per cent. Since then, the market has eased somewhat, but the vacancy rates remain very low. This situation will persist in 2008 and 2009, as rental-housing construction is idling and remains well below the volumes observed over the last five years. The vacancy rate will stay at 1.2 per cent in 2008 and 2009, given that net migration will remain at high levels (4,000 and 3,800 people, respectively) and that fewer renter households will be accessing homeownership as a result of the economic slowdown. The average rent for two-bedroom apartments will rise by 2 per cent in 2008 and by 1.5 per cent in 2009, on account of changes in energy costs.

You can find the entire report in PDF format through the following link:
http://www.cmhc-schl.gc.ca/odpub/esub/64279/64279_2008_B02.pdf

Edmonton, Alberta - Credits PinkMoose, Flickr

The Edmonton Alberta Housing Market in new home sales is taking a huge downturn from the record levels 2008 by 56%. However, the housing market in Edmonton 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 Edmonton Alberta market.

SINGLE-DETACHED CONSTRUCTION TO IMPROVE IN 2009

The Canada Mortgage Housing Corporation reported that housing starts will dip 66% in 2009. This reduction in housing starts will also cause for new housing starts to drop from 3000 units to approximately 2600 units in 2009 in the Edmonton Alberta market.

With the demand that was previously high, the average time to build a detached home has increased over the past 7 years in Edmonton, from 6 months to just over 13 months. The average price for a new detached home in Edmonton Alberta has increased from $418,954.00 to $498,961.00, in 2009, which is an increase of 19% over the same period last year.

MULTIPLE DWELLING STARTS EASE IN 2009 OVER INVENTORY CONCERNS

The Edmonton Alberta real estate market after four years of double-digit price growth, like other housing markets in Canada, experienced extreme growth in 2007. However, there was a 23% decline in housing sales in the latter part of 2008. However, it is predicted in 2009 by Canada Mortgage and Housing Corporation that the sales will stabilize but still there will be a 32% reduction in sales, as compared to 2006 and 2007.

ECONOMY SOLID REGIONAL ECONOMIC FUNDEMENTALS

The economic and employment outlook for growth in the Edmonton Alberta area is predicted to reduce in 2009, and is projected to reduce more substantially then any other province as a whole by the Canada Mortgage and Housing Corporation, in their fourth quarter report in 2008.

However, the capital region, located in the central part of the province, and all other surrounding neighborhoods will generate substantial economic and employment growth throughout all of 2009. In fact, Canada Mortgage and Housing Corporation predicts that area employment in Edmonton Alberta will grow by 2.4% in 2009, with new jobs being added in the high-tech, trade, healthcare, personal and other service related industry sectors.

Edmonton Alberta is one of the few regions that is still 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 Edmonton Alberta.

You can find the entire report in PDF format through the following link:
http://www.cmhc-schl.gc.ca/odpub/esub/64343/64343_2008_B02.pdf

Calgary Alberta - credit Kevin Saff / Flickr

The Calgary Alberta Housing Market in new home sales is taking a huge downturn from the record levels 2008 by 45%. However, the housing market in Calgary 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 Calgary Alberta market.

SINGLE-DETACHED CONSTRUCTION TO IMPROVE IN 2009

The Canada Mortgage Housing Corporation reported that housing starts will dip 22% in 2009. This reduction in housing starts will also cause the lot prices for new housing starts to drop from 777 units to approximately 4500 units in 2009 in the Calgary Alberta market.

With the demand that was previously high, the average time to build a detached home has increased over the past 8 years in Calgary, from 7 months to just over 11 months. The average price for a new detached home in Calgary Alberta has fallen from $575,000.00 to $564,000.00 in 2009, which is a reduction of 4.8%.

RESALE MARKET PRICES TO ADJUST TO CHANGING SUPPLY AND DEMAND CONDITIONS FOR RESALE HOMES AS THE MARKET IS STABILIZING

The Calgary Alberta real estate market after four years of double-digit price growth, like other housing markets in Canada, experience extreme growth in 2007. However, there was a 45% decline in housing sales in the latter part of 2008. However, it is predicted in 2009 by Canada Mortgage and Housing Corporation that the sales will stabilize but still there will be a 22% reduction in sales, as compared to 2006 and 2007.

ECONOMY SOLID REGIONAL ECONOMIC FUNDEMENTALS

The economic and employment outlook for growth in the Calgary Alberta area is predicted to reduce in 2009, and is projected to reduce more substantially then any other province as a whole by the Canada Mortgage and Housing Corporation, in their fourth quarter report in 2008.

However, the capital region, located in the central part of the province, and all other surrounding neighborhoods will generate substantial economic and employment growth throughout all of 2009. In fact, Canada Mortgage and Housing Corporation predicts that area employment in Calgary Alberta will grow by 1.2% in 2009, with new jobs being added in the high-tech, trade, healthcare, personal and other service related industry sectors.

Calgary Alberta is one of the few regions that is still 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 Calgary Alberta.

You can find the entire report in PDF format through the following link:
http://www.cmhc-schl.gc.ca/odpub/esub/64339/64339_2008_B02.pdf