Last week CMHC issued its latest Housing Market Outlook and we
are presenting a summary for you.
Canadian Housing Market Expected to Moderate Through the Second
Half of 2012
Balanced market conditions are expected in most local markets
across Canada over the course of 2012 and 2013.
Growth in the average MLS® price is expected to slow, broadly in line
with inflation,
over the forecast horizon.
The forecast calls for an average price of $372,700 in 2012 (earlier
only $368,900 was forecasted) and
$383,600 in 2013 ($379,000 in previous report).
On an annual basis, sales of existing homes through the Multiple
Listings Service® (MLS®) are expected to move upwards in 2012 and rise slightly
in 2013.
MORTGAGE RATES
Short-term mortgage rates and variable mortgage rates are
expected to remain near historically low levels, which will help support
housing demand. The outlook’s base case
also assumes that mortgage rates will remain flat through most of 2012 and
start increasing moderately in late 2012 or early 2013.
EMPLOYMENT AND INCOME
In the 12 months to March 2012, employment grew by 1.1 per cent (+197,200),
while the unemployment rate stood at 7.2 per cent. Over this period, full-time
employment rose 1.3 per cent (+181,300), while part-time was up 0.5 per cent
(15,900). Employment is forecast to grow
1.3 per cent in 2012 and 2.0 per cent in 2013.
These positive employment factors will continue to support Canada’s
housing sector.
MIGRATION
Relative to those of other countries, Canada’s economy is
expected to continue to perform well.
Canada is thus expected to attract more immigrants (net international
migration), which will push net migration up.
This will have a positive impact on housing demand in the medium to long
term.
VACANCY RATES
Moving forward, it is expected that there will continue to be
modest purposebuilt rental construction and strong rental demand due to
high immigration. This, however, will be
partly offset by an expanding rented condo market. As a result, vacancy rates across Canada’s
metropolitan centres will remain relatively stable this year and next.
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