[Sources (Various) - Dominion Lending Centres]Housing starts have started to recover and are expected to continue to improve in the second half of 2009. Starts are expected to reach 141,900 for the year and will increase to 164,900 for 2010, according to CMHC’s fourth quarter Housing Market Outlook, Canada Edition report.
“We expect housing markets across Canada to strengthen leading into and over the course of 2010 as economic conditions improve,” said Bob Dugan, Chief Economist for CMHC. “Demand for existing homes has rebounded since the beginning of the year. In addition, lower inventory levels characterize both the new and existing home markets. As a result, stronger housing demand will be reflected in higher levels of housing starts in 2010.”
The strong pace of MLS sales seen in the second and third quarters of this year reflects, in part, activity that was delayed in the previous two quarters and is not likely to be sustained. The level of sales is expected to move back closer in line with anticipated economic conditions. As a result, existing home sales, as measured by the MLS, will reach 441,300 units in 2009 and increase to 445,150 units in 2010. The average MLS price is expected to be $312,950 in 2009 and $324,500 in 2010.
Luxury homes sales continue to accelerate as economic recovery takes hold in major markets in Ontario and Atlantic Canada, according to a report released yesterday by RE/MAX.
The RE/MAX Upper End Report found that momentum is building in St John’s, Saint John, Halifax-Dartmouth, Ottawa, Kingston, Greater Toronto, Hamilton-Burlington and London as purchasers realize that the best buying period in recent history is about to come to a close. Sales are already on par or ahead of last year’s levels in 50% of cities surveyed, while the remaining markets are set to reach 2008 figures by year-end.
“Twelve months of healthy home buying activity have clearly been crammed into five short months,” says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. “It’s hard to believe that the transition in the market began in May. We’ve seen steady upward momentum since that time, with solid year-over-year gains posted each and every month.”
Pent-up demand and greater affordability have been the catalyst. Increased selection in all markets – except Greater Toronto – as well as record low interest rates have also helped fuel move-up activity from Ontario to Newfoundland.
Canadians in the housing market will pay less in realty commissions and fees if the federal Competition Bureau has its way.
In a landmark investigation, the bureau has concluded the Canadian Real Estate Association (CREA) has anti-competitive rules and must change its ways, according to documents obtained by the Toronto Star.
Details of a settlement have yet to be decided, but the bureau’s findings are expected to have a profound impact on the real estate industry – by permitting more innovative discount brokers into the market while allowing sellers to list their properties less expensively on the Multiple Listing Service.
“The Bureau is concerned that CREA’s rules have restricted consumer choice and limited the scope of alternative business models,” says an internal memo by CREA President Dale Ripplinger. “Unfortunately, the Bureau seems to believe that CREA’s rules... create restrictions and barriers.”
The bureau launched its investigation in 2007. Consumers have complained in the past about high realty fees and the need for more affordable services. The vendor of an average-priced $400,000 home in Toronto can pay a commission of as much as 5% or $20,000.
Australia’s central bank raised its key interest rate by a quarter percentage point for the second month in a row yesterday, declaring the global downturn over and warning that inflation was set to rise.
The decision to hike rates was widely expected by analysts and moves Australia further away from most economies, which have yet to respond to signs that the financial crisis has eased by raising lending rates.
The Reserve Bank of Australia board decided at its monthly meeting to raise the cash rate by 25 basis points to 3.5%. A month earlier, Australia became the first major economy to raise interest rates since the outbreak of the crisis when the bank hiked its key rate by a quarter point from a 50-year low.
Governor Glenn Stevens said in a statement explaining the decision that inflation “will probably not fall as far as earlier thought” and “will probably rise somewhat over the coming year.” – Globe and Mail
Kudos to the Ontario Government, which announced Monday that starting in September 2011, students from grade 4 to grade 12 will be learning about money management through an “integrated” approach to boosting financial literacy.
This announcement by Ontario Education Minister Kathleen Wynne said a working group co-chaired by Parliamentary Assistant Leeanna Pendergast will provide a report to the Ministry’s Curriculum Council by next summer.
One of the goals is to advise how to “seamlessly integrate” a list of financial literacy concepts and skills into the existing curriculum. Currently, personal finance is partially addressed in the existing grade 9 to grade 12 curriculum through courses in business studies, mathematics, guidance and career education, social sciences and the humanities. The ministry will work with the Investor Education Fund to develop resources for teachers.
Wynne’s goal is to “develop a made-in-Ontario solution that aims to be a leading example – globally – of how financial education can be integrated into schools.” Pendergast said students will require critical financial skills needed to “navigate an increasingly complex global financial and economic system.”
To read the full Financial Post article, click here.
Karen Kinsley, President and CEO of CMHC, recently voiced her “disappointment” at the Financial Post for suggesting that the mortgage insurer was “reckless” while at the same time comparing it to Freddie Mac and Fannie Mae in the US.
In a letter to the Post published on October 31st, Kinsley points to some key differences between the Canadian and American economies, such as a “lack of subprime issues, strong economic fundamentals,” and low interest rates in Canada.
She then goes on to note that while CMHC is entitled to insure up to $600 billion in mortgages, it only insures $480 billion now, it maintains capital reserves for future losses that are twice the minimum requirement set by the Office of the Superintendant of Financial Institutions (OFSI), and it is “subject to stringent government oversight” that includes regular reporting to Parliament.
