Housing Market Outlook

Here is the housing market outlook given by C a n a d a M o r t g a g e a n d H o u s i n g C o r p o r a t i o n for the last 6 months of this year as well as into 2013.


„„Lower mortgage rates supported Ontario existing home sales early in 2012.„Existing home sales should moderate during remainder of the year as recent price gains dampen consumer demand.

„„Thanks to early year strength, Ontario sales will post modest growth in 2012 before stabilizing in 2013. Owing to economic uncertainty, Ontario sales will range between 184,700 to 224,500 transactions this year and next.

„„Repeat buying activity will dominate in 2012 but an improving economy and stronger population growth among younger households will support first time buying activity by 2013.

Resale Prices

„„Ontario resale prices grew at an above inflationary rate early in 2012.

„„While the balance between demand and supply remained steady, price growth was a result of increasing detached home sales in more expensive markets.

„„A balanced market and fewer home sales at higher price ranges suggests Ontario price growth will slow versus its long term average but grow closer to the general rate of inflation by 2013.

Housing Starts

„„High density projects are selling quicker and breaking ground faster suggesting some moderation in activity later in 2012 and into 2013.

„„After growing to over 67,821 unit starts, starts will show further growth and reach 73,700 starts in 2012 before cooling in 2013.

„„Owing to economic uncertainty, starts will range between 58,400 to 80,100 units this year and 2013.

Economic Forecasts

„„After leading Canada`s economy during the early part of the recovery, Ontario`s economy will lag growth in rest of Canada in 2012. High commodity prices and gradually improving US economy supports strength in traditional goods producing sectors. „„Northern and selected south western Ontario economies will benefit most from improving goods sector performance. Restrained growth in banking and public administration sectors suggests moderate growth in Toronto and Ottawa economies. Ontario`s population growth will be driven by immigration. Ontario immigration levels will move higher and closer to historical norms „„Migratory inflows from other provinces will moderate as Ontario’s economic and job prospects fall short of the Canadian average in the near term.

Mortgage Rate Outlook

„„CMHC uses publically available information and the consensus among major Canadian forecasters as a basis for its interest rate forecast. Although there is significant uncertainty, consensus forecasts suggest that interest rates are not expected to rise until at least later in 2012, but will remain low by historical standards, thus supporting the Canadian housing market.

„According to CMHC’s base case scenario, posted mortgage rates will increase near the end of 2012. For 2012, the one-year posted mortgage rate is expected to be in the 3.1 to 3.6 per cent range, while the five-year posted mortgage rate is forecast to be within 5.0 to 5.4 per cent. For 2013, the one-year posted mortgage rate is expected to rise with interest rates and be in the 3.5 to 4.1 per cent range, while the five-year posted mortgage rate is forecast to be within 5.1 to 5.6 percent.

What this means to you as a seller is that you likely have another “kick at the can” coming this Fall but into 2013 is uncertain. As a buyer, you can expect to see more listings coming onto the market and a slight cooling off, yet it is very likely to remain a sellers market throughout the summer and rest of this year.

If you would like to discuss this, please feel free to contact me directly at (416) 879-7323 or mx.mr@sympatico.ca.

Have a great week!



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