Canada’s housing market to slowly rise by the end of 2013 and into 2014

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The Canada Mortgage and Housing Corporation (CMHC) said that the housing market will pick up momentum in the later part of this year and into 2014.

David George-Cosh said in a blog for The Wall Street Journal that if this prediction sounds familiar, it's because it's similar to the outlook of an agency report in February, but with revisions downward for 2013 and 2014.

What are the current predictions?
The CMHC now forecasts starts of 182,900 units this year, down from the first quarter unit estimate of 190,300. In 2014, housing starts are expected to be at 188,900 units. The CMHC predicts resales will be at 443,400 in 2013 and 468,600 in 2014. Continue reading

Canadian real estate expert: ‘Chill out’

Although the Canadian housing market as a whole is being referred to as "tepid" by some experts, the Alberta region is a shining example of a strong local housing market that other areas would be wise to mimic.

Don Campbell, a Canadian real estate expert and senior analyst/founding partner at the Real Estate Investment Network, told the Edmonton Journal that prospective homebuyers and current homeowners in Canada need to "chill out."

"There is no Canadian housing market," he told the news source. "At no other time in history has the real estate market in Canada been so regional. If you go to Hamilton, that market is strong. But in Waterloo the market is starting to slow down, even though the cities are only half an hour apart. And what's going on in Ottawa has nothing to do with Halifax."

There's no question that new home construction, home values and prices vary from region to region throughout Canada. However, the same low mortgage rates are available to qualified buyers. Speak with a mortgage servicer today to learn more about your financing options in the world of Canadian real estate.

Calgary housing market leading the way

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If the Calgary housing market is any indication, Canada as a whole could be considered as experiencing a housing boom as of late.

New data analysis from TD Economics reveals that Calgary is a "lone shining star" as the city reported 14.3 percent sales growth in 2012. Part of this increase was attributed to the 38.2 percent growth in new housing starts.

In addition, TD Economics data found that Canadian housing sales overall dropped 10.5 percent last year with Vancouver seeing a 26.6 percent decrease, Edmonton a 4.1 percent drop, and Saskatoon and Winnipeg each posting declines of 5.5 percent and 6.9 percent, respectively. 

Until new home construction picks up throughout the rest of the country, sales could continue to suffer. However, affordable Canadian mortgage rates are available for those interested in buying a new home but do not want to break their bank every month with their mortgage payments. Speak to a mortgage adviser today to learn more about your qualifications regarding obtaining financing in Canada for a new home purchase.

Canadian housing becomes more affordable

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Thanks to the continuation of ultra-low mortgage rates, Canadian housing became more affordable during the second half of 2012, according to RBC Economics.

Data shows that during the fourth quarter of 2012, due to low mortgage rates and less buyer demand, home affordability increased for the second consecutive quarter. RBC Economics also projects that this trend will continue throughout 2013.

"Exceptionally low interest rates have been the key factor keeping home affordability from reaching dangerous levels in recent years," RBC chief economist Craig Wright said. "Residential property values are elevated in Canada and, for many households, ownership remains accessible only because of rock-bottom mortgage rates. It could be a different story if interest rates were to move swiftly and significantly higher."

Continue reading

Canadian markets continue to see housing growth

Despite indications of a housing cool down throughout the country, certain markets within Canada are continuing to see a boom in real estate activity.

Housing market sees declines during fall
Data from the Teranet-National Bank National Composite House Price Index shows that while home prices were up by an average of 3.4 percent across the nation on a year-over-year basis during October, prices had actually dropped from the previous month. October also marked the 11th consecutive month of deceleration in year-over-year price increases. The index dropped by 0.2 percent from September to October, marking only the third time in 13 years that October recorded a month-over-month home price decline.

In addition, a new report from the Macdonald-Laurier Institute shows that while economic growth is growing in Canada, the housing market is projected to be replaced by manufacturing and exports.  Continue reading

There’s no crisis for Canadian lenders

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The cooldown in Canada’s real estate market has left many consumers with a sense of dread. After all, analysts and industry professionals haven’t been shy in comparing Canada’s housing boom to that of the United States before that country’s severe economic downturn.

Add to that the actions of Canadian Finance Minister Jim Flaherty, and it’s easy to see why some consumers might feel alarmed. Flaherty has tightened mortgage rules on four separate occasions, each time trying to rein in what he saw as reckless lending. His latest round of restrictions shortened the maximum amortization term for government insured loans from 30 years to 25 years, as well as decreased the amount homeowners could borrow from 85 percent of the value of their homes to 80 percent. Finally, the amount of spending on mortgages, property taxes and heating costs was set at 39 percent of gross household income.  Continue reading

Cooling housing market creates opportunities for buyers

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While speculation regarding the cooldown in Canada’s housing market usually takes a negative spin, a report from the Royal Bank of Canada shows that falling home prices are opening the door to affordable housing for many prospective buyers.

Stricter regulations affect home prices
A report from the Teranet-National Bank shows that Canadian housing prices declined from September to October, marking the third time in 13 years of data that prices declined during this time of year.

Despite data from the bank’s national composite house price index showing that October house prices were up an average of 3.4 percent across the country compared to the same time last year, October also marked the 11th consecutive month of deceleration for year-over-year price increases. October experienced a 0.2 percent drop in average house prices from the previous month. Continue reading

Government denies credit for cooling market

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Whether he likes it or not, Finance Minister Jim Flaherty has become synonymous with Canada’s housing market, and by extension, so has his office. Flaherty has been more than willing to vocalize warnings and predictions, few of them good, in regards to the country’s recent mortgage boom. He also hasn’t been shy about taking legislative action to enact policies he feels will benefit the market. These policies haven’t always made Flaherty the most popular of government officials, especially in the housing industry, but you can’t deny the man is passionate in his convictions.  

Which is why recent talk coming out of the finance office seems so out of character.

Michael Horgan, Canada’s deputy minister of finance, essentially absolved Flaherty and the finance office of any responsibility in the cool-down of the current housing market.

“There’s some evidence that the housing market, particularly in some markets, is cooling and slowing at the moment,” he said in a speech on Monday. “We read a lot of press commentary that’s saying it’s because of the government’s changes to mortgage insurance rules. I think it’s actually too early to make the direct link.” Continue reading

Is the cooling market a blessing in disguise?

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Canada’s housing market is cooling down, which is a good thing, according to Fitch Ratings.

The global rating agency said that the cool-down will help stabilize Canada’s banking system, thereby ensuring prolonged economic growth.

In other words, what’s good for the goose is good for the gander.

“The latest sales numbers provide some initial evidence that risks of near-term overheating in the Canadian housing market may be subsiding,” the agency said. “This could be a positive development for Canadian financial institutions as long as the labour market remains relatively stable.”

And therein lies the rub. Fitch’s forecast is predicated on the labor market remaining stable, but  Capital Economics estimates that 115,000 construction jobs alone will be lost due to the cool-down. Continue reading

4 reasons we’re thankful for the Canadian housing industry this Thanksgiving

As uncertain as the economy and housing market seem to be ever since the words "housing bubble" were first uttered, Canadians are gathering 'round family tables in owned or rented homes and taking time from their busy lives to be thankful for life's fortunes.

In honor of Thanksgiving on October 8, here are four of housing-related things Canadians can be happy about while they enjoy their turkey and all the trimmings:

1. Low interest rates: Despite what experts say about potentially increasing interest rates in the near future and beyond, the rates remain low for the time being. The prevalence of mortgage brokers, financial experts and helpful friends and family make it easier than ever for homebuyers to find record-breaking low interest rates and save money on their next home. Continue reading