New Home Building in Canada Drops 13% in November: CMHC
The Canadian Housing and Mortgage Corporation reported today that seasonally adjusted annual rate of housing starts was 181,000 units in November, down from 208,800 in October. The drop was due to the volatile multiple unit sector decreasing by 23%, while the single family market increased by 3.5%.
Although the drop is significant, it wasn't surprising to many economists who have long been warning the multiple unit sector was "too hot" and due for a correction. "While starts dropped to their lowest level since February of this year, the details of this report are hardly troubling. The market has corrected from a bout of surprising strength earlier in the fall," said Francis Fong of TD Economics.
GVA Housing Market Update for November 2011
The Real Estate Board of Greater Vancouver (REBGV) released their GVA Housing Market update for November.
Among the highlights, 2,360 home sales which is a drop of 6% from November 2010, but up 2% from October 2011. November home listings increased by 3,222 which is up 2% from the 10 year November average, but down 26% from October 2011. Sales to active listings ratio is at 16%, well within the definition of a "balanced market."
World Class City AND Affordable Housing: Impossible?
Affordable Housing was in the news again this week, with several articles in major dailies dissecting the issue. It is a hot topic of late, specifically with the Vancouver mayoral elections and with the creation of the Canadian Rental Housing Charter to tackle the issue.
Vancouver promotes itself as a world class city, but the features that Vancouver has to make such boasts drive demand and subsequently prices up. Pete McMartin's article in the Vancouver Sun summarizes the argument quite effectively: "If you want to live in paradise, it will cost you."
Is affordable housing in Vancouver impossible?
Showing posts with label CMHC. Show all posts
Showing posts with label CMHC. Show all posts
Thursday, 8 December 2011
Tuesday, 29 November 2011
Canada's Housing Market to Stabalize: CMHC
The Canadian Mortgage and Housing Corporation (CMHC) Q4 Housing Market Outlook Report is suggesting that 2012 will see a stabilized and balanced real estate market in Canada. The report focuses on 7 key factors that influence real estate and provides an outlook over the next 12 months. The key factors are:
- Mortgage Rates: Short term and variable mortgage rates are expected to remain at historically low levels. The report assumes they will stay flat until late 2012, which will support housing demand.
- Employment: In the past 12 months, employment has grown by 1.7% (+294,200). Full-time employment rose by 2.5%, while part-time work declined 1.5%. This overall increase and change to full-time positions will support housing demand.
- Income: Growth in income improved in 2010 because of the economic recovery and the resulting improvement in the labour market. Income will continue to grow at a slower pace in 2011 and 2012, which will provide moderate support to housing demand.
- Net Migration: The Canadian economy will continue to attract immigrants from struggling economies (net international migration) which will continue to push net migration up in 2012. This will support housing demand.
- Resale Market:Market conditions in 2011 and 2012 are expected to be in the balanced market territory.
- Vacancy Rates:Vacancy rates will remain relatively stable in 2011 and 2012. Modest rental construction and strong rental demand from immigration will be offset by increased competition from the condo market.
- Natural Population: A low Canadian birthrate (births minus deaths) will lessen the demand for additional housing stock in the medium and long term. This is the only factor currently thought to have a negative affect on housing demand.
With any outlook there are assumptions made based on current market conditions which could impact the accuracy of the report. The US economic recovery is generally seen as the largest risk, as both a faster & slow recovery than expected could skew the results. Other factors are the assumptions made in the projected mortgage rates, GDP, Employment, Income and Migration levels.
All in all the Canadian real estate market appears to be relatively healthy and projected to stay that way for the next 12 months.
Friday, 4 November 2011
The Real Estate Round-Up: November 4, 2011
CMHC: Canadian Housing Market to Stabilize in 2012
Canada's ability to shrug off global uncertainty seems to be continuing, according to the Canadian Mortgage and Housing Corporation (CHHC), who released their fourth quarter housing market outlook this week.
"Despite continued uncertainty in the global economy, Canada's economic fundamentals remain positive, particularly with respect to interest rates, employment and immigration. These factors will continue to support Canada's housing sector in 2012," said Matheiu Laberge, Deputy Chief Economist for CMHC.
This housing market outlook mirrors that of the Conference Board of Canada, which was released last week. You can read about that report here.
Variable of Fixed? It's a no brainer.
With the prime rate being so low, banks simply are not making enough money on discounted variable rates, so the age old debate of 'variable vs fixed' is becoming very one sided.
"For 10 years, I've said don't waste your money on a fixed-rate mortgage," Mr. Majthenyi told The Globe and Mail in a story this week. "Today, I just cannot in good conscience put a borrower into a 3% variable when for the same rate I can put them in a four-year fixed."
General consensus is that when the economy rallies, interest rates will likely rise for an extended period of time due to how low they have been over the last 2 years. The only question is how long until that happens.
5 Real Estate Trends for 2012
The Financial Post released a real estate trends for 2012 article this week, highlighting some key points in the Canadian housing market which will continue to make an impact in the coming year.
Canada's ability to shrug off global uncertainty seems to be continuing, according to the Canadian Mortgage and Housing Corporation (CHHC), who released their fourth quarter housing market outlook this week.
"Despite continued uncertainty in the global economy, Canada's economic fundamentals remain positive, particularly with respect to interest rates, employment and immigration. These factors will continue to support Canada's housing sector in 2012," said Matheiu Laberge, Deputy Chief Economist for CMHC.
This housing market outlook mirrors that of the Conference Board of Canada, which was released last week. You can read about that report here.
Variable of Fixed? It's a no brainer.
With the prime rate being so low, banks simply are not making enough money on discounted variable rates, so the age old debate of 'variable vs fixed' is becoming very one sided.
"For 10 years, I've said don't waste your money on a fixed-rate mortgage," Mr. Majthenyi told The Globe and Mail in a story this week. "Today, I just cannot in good conscience put a borrower into a 3% variable when for the same rate I can put them in a four-year fixed."
General consensus is that when the economy rallies, interest rates will likely rise for an extended period of time due to how low they have been over the last 2 years. The only question is how long until that happens.
5 Real Estate Trends for 2012
The Financial Post released a real estate trends for 2012 article this week, highlighting some key points in the Canadian housing market which will continue to make an impact in the coming year.
- Steady but not 'stellar' investment prospects
- Continued strength in commercial markets
- Toronto and Vancouver are still the top markets to watch for investment and development
- The multifamily residential sector remains a safe bet
- Renters will continue to favour condos over apartments
Monday, 22 August 2011
Is Routine New Home Maintenance Necessary to Maximize Warranty?
A new home is full of shiny new products and in most cases, backed with a safety net in the form of a new home warranty. With a new car, routine maintenance is an integral part to getting the most out of the warranty. Is this the same with a new home? Each province has unique laws and separate governing bodies for new home construction, so we must examine each individually to answer the question, “Is routine new home maintenance necessary to maximize warranty?” First up, British Columbia.
British Columbia’s Homeowner Protection Office (HPO) is a crown corporation that oversees the licensing of residential builders and execution of the Homeowner Protection Act (HPA). The HPA’s purpose is to protect consumers and raise the bar of professionalism in the residential construction industry.
The HPA states that a warranty provider may exclude specific items from home warranty insurance if damage is caused by negligent or improper maintenance or operation (Section 11). This would certainly answer the question of whether routine new home maintenance is necessary but it also opens the door to a more complicated one; “How does a homeowner know what the proper operation and maintenance is for each specific product in their home?”
To answer this question, we consulted three sources; Traveler’s Guarantee and National Home Warranty, BC’s two largest new home warranty providers, and the Canada Mortgage and Housing Corporation (CMHC).
Both warranty companies provide a homeowner maintenance manual with general tips on maintenance, but both are generic in nature. Each frequently instructs the reader to consult with manufacturer’s literature. The CMHC Homeowner’s Manual, which is endorsed by the Canadian Home Builders’ Association (CHBA), is far more comprehensive at over 170 pages, but still references consulting specific product documents for in-depth operation and maintenance information. By the HPA’s definition of required operation & maintenance, none of these documents alone would give a homeowner enough information to keep their warranty in tact.
The bottom line is a new home requires work. Understanding the products & components of a home and how your new home warranty interrelates will allow homeowners to get the most out of their new home. Manufacturer product documents such as Operation Manuals & Maintenance Guides, combined with a maintenance schedule is necessary for anyone to meet all of their obligations as a homeowner.
British Columbia’s Homeowner Protection Office (HPO) is a crown corporation that oversees the licensing of residential builders and execution of the Homeowner Protection Act (HPA). The HPA’s purpose is to protect consumers and raise the bar of professionalism in the residential construction industry.
The HPA states that a warranty provider may exclude specific items from home warranty insurance if damage is caused by negligent or improper maintenance or operation (Section 11). This would certainly answer the question of whether routine new home maintenance is necessary but it also opens the door to a more complicated one; “How does a homeowner know what the proper operation and maintenance is for each specific product in their home?”
To answer this question, we consulted three sources; Traveler’s Guarantee and National Home Warranty, BC’s two largest new home warranty providers, and the Canada Mortgage and Housing Corporation (CMHC).
Both warranty companies provide a homeowner maintenance manual with general tips on maintenance, but both are generic in nature. Each frequently instructs the reader to consult with manufacturer’s literature. The CMHC Homeowner’s Manual, which is endorsed by the Canadian Home Builders’ Association (CHBA), is far more comprehensive at over 170 pages, but still references consulting specific product documents for in-depth operation and maintenance information. By the HPA’s definition of required operation & maintenance, none of these documents alone would give a homeowner enough information to keep their warranty in tact.
The bottom line is a new home requires work. Understanding the products & components of a home and how your new home warranty interrelates will allow homeowners to get the most out of their new home. Manufacturer product documents such as Operation Manuals & Maintenance Guides, combined with a maintenance schedule is necessary for anyone to meet all of their obligations as a homeowner.
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