In the last quarter of 2010 MLS listings of resale homes regained traction. In 2011 MLS sales will experience a minor decline before increasing in 2012. The average MLS price edged higher in the fourth quarter of 2010 and is expected to grow modestly moving forward as market conditions will remain balanced. For 2011 average MLS price is forecast to be $348,900 while 2012 will see a further increase to $358,200
In Ontario a recovering economy and improving employment situation will push Ontario starts up, but not until 2012. As is the case for most other provinces, new construction growth is expected to slow in 2011
Mortgage rates
On January 18th, the Bank of Canada announced that it was leaving the Target for the Overnight Rate unchanged at 1.0 per cent. The last increase in the overnight rate occurred on September 8 when the Bank of Canada raised it by 25 basis points. With the overnight rate expected to remain flat in 2011, mortgage rates, particularly short term mortgage rates and variable mortgage rates, are also expected to remain at historically low levels.
According to CMHC’s base case scenario, posted mortgage rates will remain flat in 2011 before increasing moderately in 2012. Rates could, however, increase at a faster pace if the economy ends up recovering more quickly than presently anticipated.
Vacancy rates
Increased competition from the condo market and modest rental construction will be partly offset by strong rental demand due to high immigration. As a result, vacancy rates across Canada’s metropolitan centers will remain relatively stable this year and next.
In Ontario low rental apartment vacancy rates will boost investor demand for apartment units.
