CMHC breathes a sigh of relief

The CMHC is revising it’s forecast for housing starts in the slightly upward direction thanks to the US decision to keep interest rates at rock bottom levels:

The outlook runs contrary to a report in July from TD Economics, which projected that Canada’s housing market was poised to correct over the next two calendar years, with resale activity falling 15.2 per cent and average prices dropping 10.2 per cent.

“A combination of more subdued job and household income growth, rising interest rates, the recent tightening in borrowing rules for insured mortgages and fewer first-time home buyers are expected to be the chief culprits behind the slowdown,” said the report, prepared by deputy chief economist Derek Burleton and economist Sonya Gulati.

Earlier this summer, BMO Capital Markets warned that the Canadian market could suffer a price setback if there is a rapid rise in interest rates due to higher inflation, an increase in unemployment because of a weak U.S. economy or a slowing in foreign investment.

CMHC, however, projects that despite a slowing in the second half, average resale prices will deliver an overall increase in 2011, and continue to rise, albeit at a more modest pace, in 2012.

Laberge said the key reason for CHMC’s positive outlook is the call later in the summer from U.S. Federal Reserve chairman for interest rates to remain at rock-bottom rates into 2013.

As a result, he said, “We expect mortgage rates will be flat this year and to start increasing only later in 2012.”

Read the full article here.

Sort by:   newest | oldest | most voted
Gazza
Guest
Gazza

My wife is nagging to buy a house in Comox, and I'm just not sure how much longer I can hold her off.

Guys, what should I do? What do I say? Is this going to be a slow painful RE death?

paulb.
Guest
paulb.

New Listings 210

Price Changes 107

Sold Listings 103

TI:16512

http://www.laurenandpaul.ca

logic
Guest
logic

where tf is Comox?

Says it all, really.

vreaa
Member
Mayor Robertson – "People come here with money and they want to be part of this. That creates challenges for my kids and the next generation to live here. It's not affordable to live here now." — The mayor is deducing that Vancouver RE prices are high because his "green" policies are perceived as successful. We believe that he is sincere in his logic, but also that he is simply wrong. Housing prices have ballooned to "unaffordable" levels in Vancouver because we are in a very large debt-driven speculative mania, not because we have any particular desirability as an environmentally friendly city. Many of the apparent problems of unaffordable housing will be 'solved' by a simple market crash. Of course there will be all sorts of bad effects for the community from such a crash, but that is now unavoidable.… Read more »
Flip Flop
Guest
Flip Flop

rent in Comox until you decide that you like it and are going to stay there for a long time. That should buy you some time, and helps you pick an area (er street) that you like, after you get to know the lay of the land a little better.

Assuming your wife isn't from Comox, or that play might now work.

jesse
Member
Georgia Strait: B.C.'s real-estate market looks good despite uncertain economic times ahead While the governor of the Bank of Canada talked on Parliament Hill about risks associated with the economic crises in the U.S. and Europe, it was business as usual for Escueta, a realtor of several years. Global equities and financial markets may be wobbly, but according to Escueta, this is keeping interest rates down in Canada. This can only be good for property buyers out to make a move… The volatile global economy isn’t much of a concern to Simon Fraser University’s Andrey Pavlov. According to the associate professor of business, who specializes in real-estate finance, many people are expected to consider parking their money in properties as a safe investment. “There’s no other place to put your money,” Pavlov told the Straight in a phone interview. “All… Read more »
jesse
Member

Daily sales volume update

Average Sales 112

Total Sales 1896

Average Listings 226

Total Listings 3839

Average sell/list 50%

Days in month 22

Days elapsed 17

% days elapsed 77%

Expected sales 2,454

Expected listings 4,968

Previous sales volume

2005 3649

2006 2998

2007 3384

2008 1550

2009 3500

2010 2202

August 2010 after 3/4 total days elapsed:

Average Sales 106

Total Sales 1692

Average Listings 189

Total Listings 3028

Average sell/list 57%

Days in month 21

Days elapsed 16

% days elapsed 76%

Expected sales 2,221

Expected listings 3,974

Anonymous
Guest
Anonymous

@logic: Hopefully it's somewhere where 'everyone' doesn't want to live. Somewhere a family could buy a home to live in where they won't wake up with junkies in their yard. Somewhere with a clean environment, friendly people and a sense of community. Someplace like that would be nice, but please don't tell anyone where it is.

gordholio
Member

6, Jesse: I had a few spare minutes this morning, so I wrote a response to that Georgia Straight piece. My reply was way too aggressive and way too accusatory – but what can I say? It pissed me off – particularly the headline, a real estate salesman's opinion dressed up to look like fact. And let us not forget the infamous line, "There's no other place to put your money." Damn, who pays that Pavlov dude anyway? Utterly shameful.

Every day our personal decision to rent for at least the next two years looks better and better.

gordholio
Member

1, Gazza: Can you give us the specific reasons your wife feels the need to buy?

The One
Guest
The One

Debunking the supposed drivers of Vancouver's crazy real estate market

http://www.theeconomicanalyst.com/content/debunki

gordholio
Member

11, Jesse: No, I haven't seen a hard copy of the Georgia Straight for a very long time. All real estate, all the time, huh?

N
Guest
N

@gordholio:

Actually, if it were true that there is no other place to put money, or even if it is true that there is a perception that there is no other place to put money, that in itself would be an argument against putting money in real estate for the long term. Asset bubbles often happen when people park money there (look at the history of the price of gold).

But of course, it is also obviously false, otherwise people in the States would also be forced to put their money in real estate and prices there would be rising instead of falling.

It is really frightening that this man has a job.

jesse
Member

@N: "Asset bubbles often happen when people park money there"

Indeed. Last I checked, when someone buys a house, they literally give someone else their money. It's not really "parked". Just sayin'…

Inventory
Guest
Inventory

M L S Sales from the last 4 days in Richmond

113 New Listings

39 Price changes

26 Solds

Patiently Waiting
Member
Patiently Waiting

@Inventory: Scam did his dirty worked. He crashed Richmond for us.

registered
Member
registered

"…. Simon Fraser University’s Andrey Pavlov. According to the associate professor of business….

Well, not really. Andy actually "specializes in real estate finance at the Wharton School of the University of Pennsylvania, where he is visiting associate professor of real estate, and at the Simon Fraser University, Vancouver, BC where he is associate professor of finance." Only a fool expects journalistic accuracy from the Straight.

Andy falsely gives the impression of having a clue here – http://papers.ssrn.com/sol3/papers.cfm?abstract_i– yet fails to extend that grasp far enough to capture the CMHC's role. At least until very recently, many Canadian lenders offered cash back mortgages. That's not zero-almost zero down? Why Andy, why?

space889
Guest
space889

@jesse: Uhm…you mean at the back of the papers where people seems not to know any articles of clothing beside underwear, bra, and pantyhose? 🙂

space889
Guest
space889

@jesse: Yes I have! So many pretty barely dressed ladies to go ga-ga at. 🙂

gordholio
Member

18, fixie guy: Great research, man.

I note, BTW, that the Straight has not yet published my comment. Admittedly, it was…ahem…large.

If I dont see it published by tonite, I'm going to post it here

just so y'all can get a laugh. Unedited gorholio mega-rant. And then I'm going to re-address it direct to the Georgia Straight head honcho so they have to go to the trouble of tossing it out yet again. That'll teach the bastards! 🙂

Van MD
Guest
Van MD

[BCREA predicts metro Vancouver price in 2012 to drop 3.5%]

"B.C.'s home sales, property values to slow as job growth ebbs: BCREA"

AUGUST 25, 2011 1:02 PM

"Following a decade where unit sales broke all records, consumer demand for the next few years will be relatively moderate," Muir said in releasing the report.

A positive note, however, is that weaker global economic growth and uncertainty in world financial markets are signals that interest rates, including mortgage rates, will remain low and "help underpin housing demand."

Muir expects Metro Vancouver's average price to slip 3.5 per cent in 2012 to $742,000. However, that will be a decline off 2011, which Muir predicts will end with the average price having shot up 14 per cent to $769,000.

http://www.vancouversun.com/business/home+sales+p

jesse
Member

@Van MD: So let's do the math here:

(1+0.14)*(1-0.035) => 5% CAGR

I wonder if they are using the long-term growth trend to justify prices going forward, as if the last 8 years were an anomaly.

Predicting a drop in prices is brave, though.

pipewrench
Member
pipewrench

@jesse:

brave, true….but

wait for the fluff in the next 5 pieces to disregard the report as overblown and extremist. You cannot bite the fingers of the advertiser after all.

edit:

thanks,

fixie guy and Van MD , great read. 🙂

Inventory
Guest
Inventory

Richmond M L S total sales this week (including today)

New Listings 124

Price Changes 51

Sold Listings 32

**there were only 2 houses sold in the past 2 (wed & thurs) days.

paulb
Member

New Listings 162

Price Changes 89

Sold Listings 100

TI:16522

Check out my site: http://www.laurenandpaul.ca I have added to the stats section. I now take a closer look at Van West, Van East and the North Shore. Still a work in progress..

wpDiscuz