CMHC ‘cautiously optimistic’ about housing market – Robyn Adamache
Rather than write headline grabbing articles, the Canada Mortgage and Housing’s 18th annual Housing Outlook Conference in Vancouver this week aimed to objectively take a look at the market, interpreting not only past market conditions, but also taking a look into the coming years with a series of KPI’s that any smart analyst should be paying attention to.
The sentiment of the Canadian Mortgage and Housing Corporation (CMHC)’s market outlook was ‘cautiously optimisted’. Robyn Adamache, suggested this was due to three very important market indicators that point to stability in the economy: improving immigration numbers, improving employment numbers, and a continuation of low mortgage rates.
CMHC are predicting a small rate hike in the latter half of 2013, but until then, they predict we will see rates unchanged. The uptake of rates will be as a result of higher employment and economic growth in 2013.
In 2012 Vancouver has added over 35,000 jobs, growth this year is set to continue at 2.9%, and 2.2% in 2013. Most of the growth has been due to full time jobs, which helps out the economy.
2010 saw immigration numbers reach 42,826. During 2011, this tailed off to only 26,000 new immigrants, however, those numbers are picking up again, and during 2012 we are set to see 34,000 new immigrants, and that number will rise in 2013 to an expected 40,000.
17% of new immigrants become home owners within 6 months, and more than half take the plunge within 4 years – according to immigration Canada.
Adamache points to inflationary pressures from the US along with an uncertain global economy as drivers of our current real estate market slowdown. She foresees a buyers market until mid 2013 when housing supply will be normalized from the 9 month supply we have on the books right now.
Sales to new listings ratio has started to move to a more balanced market (this maybe due to sellers taking their homes off the market, as they now realize that they can’t sell for the prices they want).
Also important to note is the press’ fascination with averages. Whilst in some cases, averages can be a great way to interpret numbers, with regards to real estate, it is a less than desirable tool. For example, if we look at the West side of Vancouver, prices have actually increased if you remove the super high end homes that have been skewing the averages.
Even though we are seeing much less market activity sellers are not keen, just yet, to drop their prices considerably, with some, as we have said, choosing to remove their properties from the market, rather than reduce the price.
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