Demand for rental apartments in both the Kitchener and Guelph CMAs decreased in October 2009. The average vacancy rate for privately- initiated rental apartments in the Kitchener CMA increased to 3.3 per cent from 1.8 per cent in October 2008. In the Guelph CMA, the vacancy rate rose to 4.1 per cent from 2.3 per cent last October.

A number of factors, both demographic and economic, contributed to the decreased demand for rental accommodations. These factors included renters moving to home ownership, higher unemployment and lower demand from young adults. Although the main reason vacancy rates were up was a decrease in demand, additional rental housing which was not completed in time to be included in the survey but was available for occupancy before the survey also had some impact.

Many first-time buyers made the move to home ownership and vacated their rental units in 2009. Mortgage rates decreased to their lowest level in more than 60 years. With the uncertainty in the economy, home price growth was limited. As a result, mortgage carrying costs became more affordable. First-time homebuyers who had remained on the sidelines in the final quarter of 2008 and the first quarter of 2009, propelled sales of existing homes to strong levels in the second and third quarters of 2009.

Employment in the Kitchener CMA for the first three quarters of 2009 declined by 1.4 per cent, or 3,600 jobs, compared to the same period in 2008. All of the jobs lost were full time. Unemployment increased across all age groups. The unemployment rate for youth jumped to 15 per cent. Those in the 15-24 age group typically rent. Consequently, many youth chose to remain at home or double up with other rental households, resulting in more vacant units.

In the Guelph CMA, employment decreased by 2,600 jobs, or 3.4 per cent. As in the Kitchener CMA, unemployment increased across all age groups. Some rental households doubled up or made alternative living arrangements. As a result, fewer rental units were occupied.

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.

As stock markets around the world have taken a fall with the economic recession, one market that remains strong is Israeli real estate. The Park Hyatt Hotel was host to Israeli real estate firms including Azorim, Gindi Holdings, Dimri Building & Development, Pollock Real Estate and Ashdar Building Company a few weeks ago when they flew into Toronto to deliver a presentation to potential investors.

It was the first time they’d done so directly, according to Ainnat Lifshitz, director of marketing and sales of Bayit4U, the company that coordinated the event. Alongside the real estate developers were bank representatives and lawyers who “give a panoramic view of Israel and cover all aspects of real estate,” she said.

Residential properties in Israel were under the spotlight as they’ve performed well in recent months. According to Lifshitz, demand for homes in Israel was up 14.6 percent in April 2009, compared to the same period in 2008.

http://www.canadasisrael.ca/2009/07/israeli-house-for-sale-in-toronto/

reviewed by Moishe Alexander, CFC canadian funding corp CEO

A record-breaking number of homes were sold in Ottawa last month, up 3.9 per cent from May 2008, and for more money.

The Ottawa Real Estate Board said 1,969 residential properties were sold in May, compared to 1,896 a year ago. The May figure is a 19-per-cent increase from a month ago.

The average sale price of homes sold last month was $312,045, an increase of 5.3 per cent from May 2008.

Ottawa Real Estate Board president Rick Snell said the news is wonderful considering Canada’s turbulent economic climate.

“And it’s great for the Ottawa economy,” he said, “because every time there’s a sale, it generates all kinds of business throughout the Ottawa economy. People move, they buy furniture, they buy appliances, they decorate, they renovate.”

The fact that Ottawans enjoy the benefits of living in a real estate bubble is not news. With stable government employment and a highly educated population enjoying steady incomes for the most part, the city’s May figures don’t surprise the Canada Mortgage and Housing Corporation (CMHC).

“We have a very stable market in Ottawa,” CMHC senior Ottawa market analyst Sandra Pérez Torres said Wednesday. “Year-to-date employment shows positive numbers. We have, until April 2009, a 0.1 per cent increase, so despite the fact that some sectors have decreases from last year — such as in trade, manufacturing, transportation — public administration and services are picking up the slack.”

“Even construction employment has increased significantly from last year.”

Pérez Torres said consumers are also continuing to take advantage of low interest rates.

“There are other, smaller regions in Ontario like Thunder Bay, for example, which is showing positive numbers as well. But in general, when we compare with the bigger picture, Ottawa is one of the best ones, showing a very, very positive outlook.”

The May numbers are in keeping with 2009 Ottawa real estate market projections released in December, in which RE/MAX and CMHC predicted a slight rise in prices and no drastic decline in home sales.

Ottawa is becoming more of a sellers’ market, Pérez Torres added. The trend began in April, and she predicts it will continue over the summer. Traditionally, Snell said, the market peaks in May and June before beginning a gradual decline into the fall.

http://www.ottawacitizen.com/Business/merry+month+Ottawa+home+sellers/1660731/story.html

Moishe Alexander’s Review

Resale market: sales volumes to stay high in 2008 and 2009

Trois Rivieres, Quebec - Credit Stingler, Flickr

After a year of stability, resale market activity in the Trois-Rivières CMA will slow down somewhat in 2009. Still favourable financing conditions, a dynamic job market in 2007, strong net migration and slightly more properties for sale on the market helped maintain the number of transactions (830 sales, compared to 825 a year earlier). For 2009, a small decrease in sales is anticipated, with 790 transactions. While migration and rising inventories of properties for sale will continue to boost sales, the job market, which has been idling since the beginning of 2008, combined with higher home prices, will put a damper on resale market activity in the Trois Rivières CMA next year. Inventories of properties for sale on the market, which have been on the rise since the low point reached in 2004, will continue their upward course in 2008 and 2009. In the absence of an equivalent increase in demand, this rise in supply will cause the market to ease further, pushing up the seller-to-buyer ratio. Since attaining its lowest level in 2004 (4.0 to 1), the seller-to-buyer ratio has been rising gradually year after year. At the end of 2007, the market even left the overheating zone, characterized by a ratio below 5 sellers per buyer. However, even though this ratio will continue to ris progressively from now until the end of 2009, the market will still remain below the balanced range*, reflecting a market where sellers will still have the edge. Consequently, significant price hikes will again be recorded. In 2008, the average price of singlefamily homes will reach $143,000, up by 6 per cent over 2007. The increase will be slightly smaller in 2009 (as the seller-to-buyer ratio will rise), and single-family homes will be selling for an average price of $148,500 (a hike of 4 per cent over 2008).

Residential construction: continued high rental housing starts volumes

Residential construction has been very active in the Trois-Rivières CMA for the last four years, with starts volumes reaching very high levels. This vigorous activity has been attributable to the many rental housing starts, which have virtually jumped since 2004, in response to the low vacancy rates observed on the rental market. In fact, rental housing starts have accounted for close to half of the annual starts totals, for four years now. From 1996 to 2000, when the vacancy rate hovered around 8 per cent in the CMA, only 540 rental housing units were started. From 2002 to 2007, this figure climbed to 1,925 units, effectively doubling the share of rental housing starts, which rose from 23 per cent to 42 per cent within the space of a few years. The results for 2008 will be similar to the levels recorded in previous years, and the total starts volume wil remain high, once again supported by rental housing construction. In fact, a total of 1,150 starts should be enumerated in the Trois-Rivières area. For 2009, a small decrease is anticipated, as construction should get under way on 1,000 new dwellings. Rental housing starts are expected to fall slightly, as the vacancy rate will go back up in the CMA. Single-detached home starts will decrease somewhat in 2008, and foundations should be laid for 400 houses on the CMA territory (compared to 430 in 2007). Still favourable financing conditions and an active job market in 2007 will keep single-detached housing starts at a relatively high level. In 2009, 350 such houses should be started. The wider choice of properties for sale on the existing home market, along with slowing household formation, will dampen demand for new houses. Condominium construction in the Trois-Rivières CMA has been very limited and inconsistent over the past 20 years. Given the difficulties with the absorption of condominiums, developers have preferred to turn their efforts to the construction of other types of housing. The wind should change in 2009, however, when some 60 condominium units should get under way as part of the first phase of the Trois-Rivières-sur-Saint-Laurent development project.

Mortgage rates to remain low

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 percent range.

Employment: slowdown in sight

The Trois-Rivières census metropolitan area (CMA) job market will moderate slightly in 2008 and 2009. Following a relatively vigorous year in 2007, with more than 3,400 jobs created, the pace will slow down. A climate of weakness and uncertainty continues to loom over manufacturing companies in the area, which have had to contend with several difficulties in recent years. In addition to the rapidly rising value other  Canadian dollar against the U.S. currency and increased competition from emerging countries, there are now fears on the part of exporters in the area related to the U.S. economy context, which could dampen the job outlook. However, although a few shutdowns have already been announced since the beginning of the year, other announcements, such as the canola seed and soybean crushing plant in Bécancour, suggest that, for the moment, certain manufacturing sectors might get through this period of turmoil relatively unscathed. The construction sector (residential and non-residential), for its part, will remain strong. A high volume of housing starts is anticipated, as several public infrastructure projects will be pursued in the area this year and next. In 2008 and 2009, employment growth in the Trois-Rivières CMA will hover between 0.1 per cent and 0.3 per cent (compared to 5 percent in 2007).

Rental market: slight easing on the horizon

The Trois-Rivières CMA rental market has tightened significantly since the beginning of the decade. Strong migration to the area put upward pressure on demand for rental housing, which, combined with the low rental housing construction volumes recorded during the 1990s, caused the market to tighten considerably. From 7 per cent in 2000, the vacancy rate consequently fell to 1.5 per cent just three years later. Since then, this rate has stayed below the 2-per-cent mark, even with the arrival of many new rental housing units on the market. Demand therefore still remains vigorous, mainly on account of the strong migration. In 2008 and 2009, the vacancy rate will rise again gradually, reaching 1.8 per cent and 2.2 per cent, respectively. While migration will keep demand at a relatively high level, the rental housing supply, which has been progressively replenished in recent years, will cause the market to ease somewhat.

Migration: still strong

The Trois-Rivières CMA has attracted a significant number of migrants in recent years, which has greatly stimulated the residential real estate market. In fact, the years 2005 and 2006 particularly stood out in this regard, with annual net migration levels above 800 people, which had not been seen in over 15 years in the area. This strong migration will continue in 2008 and 2009, when the numbers of newcomers to the Trois-Rivières area should stay at levels similar to those of previous years. From now until the end of 2009, migration will therefore be the main driving force behind the Trois- Rivières CMA residential real estate market.

You can find the entire report in PDF format through the following link:
http://www.cmhc-schl.gc.ca/odpub/esub/64299/64299_2008_B02.pdf