CMHC’s Canada Housing Outlook calls for a stable real estate market
Canada Mortgage and Housing Corporation (CMHC) released their 3rd quarter Canadian housing forecast this morning. With hundreds of billions of dollars riding on insured mortgages, nobody will claim that CMHC doesn’t have a fair bit of skin in the real estate market and is not exactly an unbiased source. Just the same, they have a significant voice with the national media and there’s little doubt this report will be all over the news today.
Nationally…
…Sales of existing homes through the Multiple Listing Service® (MLS®) strengthened steadily through 2009 and remained strong for the first half of 2010. For the remainder of 2010, MLS® sales will decline and will stabilize at more sustainable levels in 2011. Overall, 463,800 sales are expected in 2010, followed by 456,000 in 2011.
The average MLS® price is expected to edge lower in the third quarter of 2010 with modest growth resuming thereafter as balanced market conditions curtail the upward pressure on house prices. For 2010, the average MLS® price will be $338,900 while 2011 will see a slight increase to $342,200.
Provincially…
…The slower pace of price increases, coupled with historically low mortgage rates, improved affordability and stimulated housing demand in the first half of 2010.The strong gains in the first half of the year will be offset by a moderation in existing home sales in the second half as mortgage rates rise and pent-up demand is exhausted. Accordingly, resales in 2010 are expected to dip below last year’s annual level before advancing in 2011 on the strength of an improved labour market and increased demand supported by migration patterns.
Existing home prices in Saskatchewan will rise modestly through the balance of the year and going into 2011, reflecting balanced market conditions. Active listings have moved higher and this will ensure price growth remains modest over the forecast period. Accordingly, the average MLS® price will increase to $239,250 in 2010 and to $246,200 the following year.
So there you have it. Even as bubble talk continues to capture the interest of the national media, CMHC chimes in to predict a stable market through 2011.
Read CMHC’s Housing Market Outlook, Canadian Edition is here.
The Saskatoon version of this report should be out in a few days. I will add a link to this post.
I’m always happy to answer your Saskatoon real estate questions. All of my contact info is here. Please feel free to call or email.
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Norm Fisher
Royal LePage Saskatoon Real Estate
6 comments so far. We'd love to hear your thoughts.
September 1st, 2010 at 9:23 AM
A bubble it will be. Houses have tripled in value over the last ten years, while wages have seen modest increases. Just wait until the interest rate moves up a point or two. Then you will see the house of cards tumble.
September 1st, 2010 at 11:50 AM
Bank of Montreal cut its special five-year fixed rate mortgage by 20 basis points today, bringing it down to 3.59%.
Now we’re cooking with gas.
September 1st, 2010 at 12:04 PM
CMHC has a vested interest in prices not going down, of course they are gonna do their best to pump up the market.
Need fresh new first time homebuyers to keep the Ponzi real estate market going. With mortgage criteria tightened, I cannot see where the demand will come from.
Price drops are coming; realtors do get hungry, have bills, and a lifestyle to maintain! Like the realtor in the Mercedes put up a sign back in May on my neighbours lawn. The house is still for sale and hasn’t had a drop in price. Hmmm something is gonna give! Don’t think the realtor is gonna give up the car for his client to hold out for the price. lol
September 2nd, 2010 at 8:42 AM
Jen,
Life in “Backwardsville” carries on.
Determine which direction makes the most sense and then run the other way.
September 3rd, 2010 at 5:26 AM
Kyle said: “A bubble it will be. Houses have tripled in value over the last ten years, while wages have seen modest increases. Just wait until the interest rate moves up a point or two. Then you will see the house of cards tumble.”
Housing prices rapidly increasing obviously makes it more likely that there is an unsustainable “bubble”. But there are a lot more pieces to the puzzle. What has been the effect of inflation in the last ten years? What has happened with jobs and wages in those ten years? What about interprovincial and international migration? Were homes “properly” priced ten years ago according to fundamentals like wages?
It’s not just as easy as price increase = unsustainable, and even it it was there’s the question of what “unsustainable” means. Are prices going to stay flat for a long time? Drop by 50%? Will they be giving out land titles certificates in bubble gum packages? Do they even still sell bubble gum?
September 3rd, 2010 at 7:54 AM
7-11 carries a wide selection of bubblegum. You are right it is more complicated, but none the less things seem to be getting a little inflated. Just saying……………….
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