Home Front: Canada's housing markets keep a steady pace
Canada's housing markets are forecast to remain steady for another two years, according to a new report released on Monday.
The national housing agency, Canada Mortgage and Housing Corporation (CMHC), is predicting continued low interest rates and "moderate" increases in the average multiple listing service (MLS) price for 2012.
“With the Canadian economy set to expand at a moderate pace and mortgage rates expected to remain low, activity levels in 2012 in both new home construction and sales of existing homes will stay close to levels seen in 2011,” said Mathieu Laberge, deputy chief economist for CMHC in a press release.
- Existing home sales will be in the range of 406,000 to 504,500 units with a point forecast of 457,300 units.
- Housing starts will be in the range of 164,000 to 212,700 units with a point forecast of 190,000 units. They're expected be in the range of 168,900 to 219,300 units with a point forecast of 193,800 units in 2013.
- The average MLS price is predicted to be between $330,000 and $410,000 in 2012 and between $335,000 and $430,000 in 2013. CMHC’s point forecast for the average MLS price is $368,900 for 2012 and $379,000 for 2013.
What does this mean for Vancouver?
Vancouver's housing market may see prices go up "slightly," but the sales are expected to be the same as last year, Bill Binnie, owner and broker of Royal LePage North Shore, said.
The average price of homes in Vancouver will be 2.3 per cent higher than it was at the end of 2011.
While Binnie said that he "completely agrees" with the sunny national reports, saying it's a "fairly predictable" market, he added:
"There have been a few reports out that were negative in nature. I just read one from some bank economist talking about a bubble in the condo market."
Looking at Binnie's local statistics and surveys, he observed that there aren't many investors. He said that "between the local investor and the foreign investor, (the difference) is never more than 20 per cent."
"We're only seeing maybe half as many Chinese buyers as we did last year thus far, but I think that will grow," he said.
"I think there's some urgency in China to buy this year because of a [government central committee] change happening there, so that will be a steady influence in the Vancouver market all year, as it was last year. I don't see much change."
"Locally, we are seeing starter homes, which are now condos and townhouses, carry on steadily."
Royal LePage North Shore House Price Survey and Market Survey Forecast for the fourth quarter showed year-over-year price gains for all housing types surveyed in Vancouver:
- Detached bungalows rose 14.1 per cent year-over-year to $1,017,500, largest year-over-year price increase
- Prices for standard two-storey homes rose 10.9 per cent year-over-year to $1,117,250
- Standard condominiums saw an increase of 10.7 per cent year-over-year to $536,500
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