Archive for category CMHC reports
Will house buyers embrace the internet?
Posted by admin in Affordable mortgages, CMHC reports, Canada, Fraud awareness on March 16th, 2010
Buying or selling a home is among the most stressful experiences in anyone’s life, but it appears that estate agents are not at the heart of the problem.
The Office of Fair Trading (OFT) has given a clean bill of health to the industry, pointing out that satisfaction levels are up.
However, the watchdog has shed light on the increasing influence of the internet on the way we buy and sell homes.
Now it wants to free up businesses that match private buyers and sellers in order to encourage more competition.
What is the future for internet sales?
At present, online services are dominated by the traditional estate agents rather than so-called “introducers”.
These introducers provide a website where buyers and sellers can find a property they like but are then left to conduct negotiations between themselves.
In the US, these currently have 15% of the market compared with only 2% in the UK.
The OFT wants to free them of the burden and cost of some of the regulations that come because each introducer is currently regarded by law as an estate agent.
They could be free from price negotiations and responsibility for ensuring that the property is described properly in an advert.
However, private buyers and sellers should be aware of the greater risks involved. For example, adverts could mislead a potential buyer about the state of a property, or the neighbourhood it is in, because those running the website would not have a legal responsibility to check that the claims are true.
Housing Starts Fall
Posted by admin in CMHC reports, Canada, Ontario on January 20th, 2010
New U.S. housing starts unexpectedly fell in December, pulled down by a drop in construction activity for single-family dwellings, a government report showed on Wednesday.
The Commerce Department said housing starts fell 4% to a seasonally adjusted annual rate of 557,000 units. Analysts polled by Reuters had expected housing starts to rise to 580,000 units. November’s housing starts were revised upwards to 580,000 units from the previously reported 574,000 units. The drop in housing starts was likely the result of unusually cold weather last month.
Groundbreaking activity dropped a record 38.8% to an all-time low of 553,000 units for the whole of 2009.
Starts for single-family homes fell 6.9% last month to an annual rate of 456,000 units after rising 4.0% in November. Groundbreaking for the volatile multifamily segment rose 12.2% to a 101,000 unit annual pace, after surging 69.8% in November.
Housing is on the mend after a three-year slump and new home construction contributed to economic growth in the third quarter of 2009 for the first time since 2005.
However data such as pending home sales and homebuilder sentiment have hinted at potential weakness in a sector whose collapse triggered the most brutal U.S. recession since the Great Depression of the 1930s.
New building permits, which give a sense of future home construction, rose 10.9% to 653,000 units last month, the highest since October 2008. That compared to analysts’ forecasts for 590,000 units. For the whole of 2009, permits dropped 36.9%, the department said.
The inventory of total houses under construction dropped 3.8% to a record low of 511,000 units last month, while the total number of permits authorized but not yet started rose 8.4% to 95,800 units.
CMHC sees home building decline in ‘09, slow rebound after
Posted by admin in CMHC reports, Canada on May 19th, 2009
OTTAWA — The days of Canadians clamouring for new houses won’t return even after the economy resumes growth, according to the latest long-term forecast from the federal housing agency.
Canada Mortgage and Housing Corp. says housing starts are expected to decline to 141,900 this year – down from 211,056 last year, and a distinct contrast to several years seeing more than 200,000 new homes spring up.
Next year, building activity will rebound somewhat, with 150,300 new homes predicted to be going up.
“The outlook for the housing market is uncertain for the near term due, in large part, to continuing economic volatility,” CMHC says.
But even when the economy turns positive again, housing starts will climb back only slowly, to reach 176,800 units by 2013.
“We do not expect housing starts to return to the 200,000-plus-unit pace of recent years,” the long-term outlook states. “Rather, housing starts will remain in a range that is consistent with demographic fundamentals over the 2010 to 2013 levels.”
That’s not bad news, however. The frantic building of the past few years won’t return because the downturn Canada’s housing market is experiencing right now won’t be so long and deep as to build up significant demand, CMHC explained. So when the economy improves, home builders won’t have to jump into overdrive to meet the demand of hungry buyers.
Home prices and volume sales of existing homes are likely to follow similar trends, CMHC says.
The national average price for a home is projected to fall 6.8 per cent this year to $283,100 before stabilizing next year, CMHC predicted.
It sees the number of houses resold through the Multiple Listing Service declining to 357,800 units this year, from 433,990 in 2008, but increasing slightly next year to 386,100 units.
The CMHC forecasts are actually the midpoint of a wide range of expectations from the Crown corporation, reflecting the huge uncertainty about the direction of the Canadian economy, mortgage rates, employment and income.
CMHC’s expectations for average home prices and the volume sales of existing homes are somewhat more pessimistic than projections made by the Canadian Real Estate Association last week.
CREA sees a 5.2-per-cent decline in the average home price in 2009. The association expects the number of homes sold to total 370,500 this year and 397,000 next year.
The CMHC projections are generally in line with forecasts from the private sector. While some economists see a deeper downturn in the housing market this year, most agree with CMHC that the market will stabilize by next year, and only gradually move back to housing activity that is consistent with long-term demographics.
Canada’s growing population demands about 170,000 new homes a year. Given deterioration of old homes, the Canadian economy can sustain about 180,000 housing starts a year over the long term, said Pascal Gauthier, economist at Toronto-Dominion Bank.
He sees a much steeper drop in average home prices this year than CMHC because TD’s outlook on the Canadian economy is gloomier than most. Like CMHC, however, he sees a slow recovery, but not a return to the days of more than 200,000 housing starts a year.
Housing market dynamics vary considerably by region.
Part of the reason for the feverish pace of home building in recent years was rampant demand in booming Western Canada, CMHC notes. Now, the West faces deeper declines in home construction than the rest of the country – although Ontario is also facing steep drops.
Across the country, housing starts are expected to decline 32.8 per cent this year, with a 53-per-cent drop in Alberta, a 42.5-per-cent slide in British Columbia and a 50.2-per-cent decline in Saskatchewan. Ontario’s home construction activity is expected to be 31.6-per-cent lower this year than in 2008.
Next year, all provinces should see at least some increase in building activity, CMHC predicted, and nationally, home construction activity will pick up by a moderate 5.9 per cent.
For single detached homes, Saskatchewan and Ontario will see the biggest declines this year, while British Columbia and Alberta are expected to lead the rebound next year.
As for home prices, they will likely be stable in Atlantic Canada this year, but in decline everywhere else, especially in British Columbia and Alberta – where prices had risen the most in previous years. Brought to you by Sandy Hutchens.