Monthly Real Estate Update
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Canadian Mortgage and
"April 2013 Housing Starts in Canada"
April 2013 Housing Starts in Canada
OTTAWA, May 8, 2013 — Housing starts in Canada were trending at 182,754 units in April compared to 188,369 in March, according to Canada Mortgage and Housing Corporation (CMHC). The trend is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR)1 of housing starts.
“As expected, the trend in total housing starts continued to moderate in April. As a result, it drew closer to its historical average and is in-line with estimates of household formation. Recent moderation in total housing starts has been led by the multiple starts segment, particularly in Ontario,” said Mathieu Laberge, Deputy Chief Economist at CMHC.
CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of the state of the housing market. In some situations analyzing only SAAR data can be misleading in some markets, as they are largely driven by the multiples segment of the markets which can be quite volatile from one month to the next.
The standalone monthly SAAR was 174,858 units in April, down from 181,146 in March. The SAAR of urban starts decreased by 2.5 per cent in April to 153,528 units, led by a 3.5 per cent decline in multiple urban starts to 93,469 units. Single urban starts remained relatively unchanged from March at 60,059 units in April.
April’s seasonally adjusted annual rates of urban starts decreased in Atlantic Canada (-40.8 per cent), Ontario (-14.9 per cent) and British Columbia (-5.6 per cent). Urban starts increased in Quebec (14.8 per cent) and the Prairies (9.3 per cent).
Rural starts2 were estimated at a seasonally adjusted annual rate of 21,330 units in April.
Preliminary housing starts data is also available in English and French at the following link: Preliminary Housing Starts Tables.
As Canada's national housing agency, CMHC draws on more than 65 years of experience to help Canadians access a variety of high quality, environmentally sustainable and affordable housing solutions. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making informed decisions.
Follow CMHC on Twitter @CMHC_ca.
1 All starts figures in this release, other than actual starts and the trend estimate, are seasonally adjusted annual rates (SAAR) — that is, monthly figures adjusted to remove normal seasonal variation and multiplied by 12 to reflect annual levels. By removing seasonal ups and downs, seasonal adjustment allows for a comparison from one season to the next and from one month to the next. Reporting monthly figures at annual rates indicates the annual level of starts that would be obtained if the monthly pace was maintained for 12 months. This facilitates comparison of the current pace of activity to annual forecasts as well as to historical annual levels.
2 CMHC estimates the level of starts in centres with a population of less than 10,000 for each of the three months of the quarter, at the beginning of each quarter. During the last month of the quarter, CMHC conducts the survey in these centres and revises the estimate.
Information on this release:
Media Relations, CMHC
Preliminary Housing Start Data
Preliminary Housing Start Data
|Trend1, all areas
|SAAR, all areas
|SAAR, rural areas
|SAAR, urban centres2
|Atlantic, urban centres2
|Quebec, urban centres2
|Ontario, urban centres2
|Prairies, urban centres2
|British Columbia, urban centres2
|Actual, all areas
|Actual, rural areas
|Actual, urban centres2
|April — Single-Detached
|April — Multiples
|April — Total
|January to April — Single-Detached
|January to April — Multiples
|January to April — Total
1 The trend is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR).
2 Urban centres with a population of 10,000 and over.
Detailed data available upon request
Royal LePage's Quarterly House Price Survey & Report
Canada’s Housing Market Begins the Year with Slightly Positive Price Trends
Unprecedented combination of low interest rates, flattening house prices and strengthening economy provide support to Canada’s housing market
TORONTO, April 4, 2013 –The Royal LePage House Price Survey released today showed that house prices remained relatively flat in the first quarter of 2013 compared to the first quarter of 2012, recording that the average price of a home in Canada increased between 1.2 per cent and 2.4 per cent. An unprecedented combination of flat or in some regions decreasing house prices, inexpensive mortgages and the confidence brought on by an improving economy has resulted in a unique residential real estate environment.
In the first quarter of 2013, the national average price of a standard two-storey home increased 2.2 per cent, compared to the previous year. Over the same period, the national average price of a detached bungalow increased 2.4 per cent and the average price of a standard condominium increased 1.2 per cent.
“2013 finds the Canadian housing industry in a highly unusual place. The combination of very low mortgage rates and flat home prices, against a background of general economic improvement across the nation, is not something we’ve seen before,” said Phil Soper, president and chief executive of Royal LePage. “Typically one of these variables is moving hard in an opposite direction. While some have spoken loudly about impending market volatility and dramatic downward pressure on home prices, we are simply not seeing evidence of this. The current environment is very supportive for housing. Those waiting for big declines in home prices will likely be disappointed.”
The Canadian economy stabilized during the first quarter of 2013 and the country surpassed expectations with the addition of 51,000 jobs1 during the month of February. Domestic economic strength is buttressed by an improving U.S. economy and the expectations of a growth in resource consumption driven by China. At the same time, despite the improving economy, the Bank of Canada has been clear about its intention to keep interest rates low for the near- and mid-term.
1Source: Statistics Canada, Labour Force Survey, February 2013. < http://www.statcan.gc.ca/daily-quotidien/130308/dq130308a-eng.htm >.
“There is some degree of uncertainty regarding the of length time these factors will remain in place,” said Soper. “Of the three variables we identified, economic strength is the most likely to persist based upon the upswing in employment, our well-educated workforce, a solid financial sector and the influence of our natural resource sector. Given recent and repeated signals from the Bank of Canada, we can expect interest rates to remain low for some time to come. The continued stability of house prices is much harder to gauge.”
“Timing house prices to trends in a given neighbourhood is very difficult,” said Soper. “And it is important to remember that Canada is a collection of regional markets. Case in point, we see renewed strength in the Alberta and Saskatchewan markets in early 2013, based on the health of the energy sector. Across the mountains in Vancouver, affordability concerns dampened demand significantly. The resultant correction in home prices there may attract a new round of buyers before year end.”
Regional Market Summaries
In the first quarter of 2013, Halifax continued to experience consistent growth, with significant prices increases across housing types surveyed. Detached bungalows made the highest leap, increasing 7.8 per cent year-over-year to $294,667. St. John’s witnessed some of the highest average price gains in Canada, with two-storey homes rising 10.6 per cent. This was due in large part to an upswing in activity by move-up and executive buyers purchasing higher priced homes.
Montreal home prices remained relatively flat in the first quarter 2013. Standard two-storey homes saw the largest increase of 1.4 per cent to an average price of $392,929, while standard condominiums experienced the smallest rise of 0.4 per cent to $240,044.
Ottawa’s real estate market remained relatively flat, with house price gains ranging from 0.8 to 1.9 per cent. While standard condominiums saw the largest price gains, unit inventory for this housing category shot up 41 per cent compared to last year.
Toronto posted moderate growth in the first quarter, with average price gains of 1.8 to 4.0 per cent for housing types surveyed. The quarter saw a slight decrease in volume, even among first-time home buyers, who are traditionally the most active group. At the same time, multiple offer situations and bidding wars were still taking place in some areas of the city.
The 2013 real estate market was off to a strong start in Winnipeg. Detached bungalows posted the largest increase of 6.9 per cent to $302,896. Multiple offer and bidding war situations remain prevalent, with 35 per cent of listings selling above asking price.
With inventory yet to catch up to an influx of first-time buyers moving to the city, Regina continued to see strong price increases. Standard two-storey homes saw the highest increase, rising 12.7 per cent year-over-year to an average price of $337,000.
Low inventory also put upward pressure on prices in Calgary, with increases of 5.1 to 6.8 per cent for housing types surveyed. Although they experienced the smallest price increase, standard condominiums were the most active housing category in the first quarter of 2013. In contrast, Edmonton prices remained relatively flat with price changes ranging from a decrease of 0.2 per cent to an increase of 1.7 per cent across surveyed housing types.
Vancouver posted year-over-year decreases of 5.1 to 5.6 per cent across housing types. The market witnessed an overall reduction in activity from both buyers and sellers, which continued to drive prices down.
Royal LePage’s quarterly House Price Survey shows the annual change of prices for key housing segments in select national markets. Click here to download the chart
About the Royal LePage House Price Survey
The Royal LePage House Price Survey is the largest, most comprehensive study of its kind in Canada, with information on seven types of housing in over 250 neighbourhoods from coast to coast. This release references an abbreviated version of the survey which highlights house price trends for the three most common types of housing in Canada in 90 communities across the country. A complete database of past and present surveys is available on the Royal LePage website at www.royallepage.ca. Current figures will be updated following the complete tabulation of the data for the first quarter of 2013. A printable version of the first quarter 2013 survey will be available online on May 3, 2013.
Housing values in the Royal LePage House Price Survey are Royal LePage opinions of fair market value in each location, based on local data and market knowledge provided by Royal LePage residential real estate experts.
Royal LePage Q1 2013 House Price Survey – Data Chart
About Royal LePage
Serving Canadians since 1913, Royal LePage is the country’s leading provider of services to real estate brokerages, with a network of 14,000 real estate professionals in over 600 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage Shelter Foundation, dedicated to supporting women’s and children’s shelters and educational programs aimed at ending domestic violence. Royal LePage is a Brookfield Real Estate Services Inc. company, a TSX-listed corporation trading under the symbol TSX:BRE.
For more information, visit www.royallepage.ca.
For further information, please contact:
Kaiser Lachance Communications
Director, Global Communications & Public Relations
Royal LePage Real Estate Services
Canadian Mortgage and
"CMHC Releases its Tenth Annual Review of
the State of Housing in Canada "
OTTAWA, December 18, 2012 — As a result of prudent mortgage lending practices, the number of mortgages in arrears in Canada were trending down in 2011 and the first half of 2012, according to the Canadian Housing Observer, released today by Canada Mortgage and Housing Corporation (CMHC).
“The Canadian Housing Observer is an indispensable source of information about housing’s role in the economy, and better information helps contribute to the stability and efficiency of Canada’s housing system,” said Karen Kinsley, President of CMHC. “This marks the 10-year anniversary of this publication, relied on by many in the private, non-profit and government sectors for its analysis and insight into the dynamics of Canadian housing,” added Kinsley.
The 2012 Observer examines important housing highlights including:
- The rate of Canadian residential mortgages that were three months or more in arrears declined from 0.41% in 2011 to 0.36% in the first half of 2012;
- The net worth of Canadian households increased in 2011, with inflation-adjusted per capita net worth about $7,000 higher than prior to the recession;
- Moncton has the highest rate of household growth of major urban centres (also known as Census Metropolitan Areas or CMAs), from 2006 to 2011, followed by Kelowna, St. John’s, Calgary and Edmonton; more detail is available in the attached chart outlining the growth in the number of households in selected municipalities;
- With the number of households headed by seniors expected to rise through 2036, flexible housing can help meet their needs for comfort, security, independence, well-being and aging-in-place;
- Renovation spending in Canada grew 3% in 2011 to $43.8 billion;
- The inventories of completed and unoccupied housing units per 10,000 population are near the historical average, suggesting overall inventories are in line with population growth;
- The recently introduced Canadian Covered Bond Legal Framework will support financial stability by facilitating diversified funding for lenders and strengthening the robustness of the Canadian covered bonds market;
- The average resale price of a home in Canada in 2011 was $363,116, with Vancouver having the highest average resale price at $779,730, while Trois-Rivières had the lowest average resale price at $156,919;
- Housing starts in Canada rose 2.1 % in 2011 and were above the long-term average at 194,000 units;
Available both in print and online, the Observer gives readers access to a broad range of statistical information on housing conditions. Online users can access a broad range of statistical information on housing conditions from national, regional and local perspectives.
New for 2012: interactive local data tables now include over 160 municipalities. Using the interactive tables and charts, various housing indicators (e.g. housing starts, rents and rental vacancy rates, household type and tenure, and core housing need) can be viewed quickly online.
The new data tables allow users to select the range of data for selected communities that is of interest to them. The online publication and data are available at www.cmhc.ca/observer.
As Canada's national housing agency, CMHC draws on more than 65 years of experience to help Canadians access a variety of quality, environmentally sustainable and affordable housing solutions. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making informed decisions.
For more information, call 1-800-668-2642.
Follow CMHC on Twitter @CMHC_ca
Senior Media Relations Officer, CMHC
Canadian Housing Observer
Household Growth Summary Canada, Provinces, Territories and Census Metropolitan Areas, 2006 – 2011
|Prince Edward Island
|Newfoundland and Labrador
|Census Metropolitan Areas
|Ottawa – Gatineau
|Kitchener – Cambridge – Waterloo
|Abbotsford – Mission
|Greater Sudbury / Grand Sudbury
|St. Catharines – Niagara
Data for 2006 are based on 2011 Census Metropolitan Area boundaries. Between 2006 and 2011, CMA boundaries changed in Saguenay, Québec, Sherbrooke, Trois-Rivières, Montréal, Ottawa – Gatineau, and Guelph.
Data are census-based estimates of dwellings occupied by usual residents, which were released by Statistics Canada on February 8, 2012.
Source: CMHC, adapted from Statistics Canada (Census of Canada)
The Ottawa Business Journal
"No urban boundary expansion in the works: city"
November 1, 2012
The City of Ottawa isn't planning to expand the space available for suburban development anytime soon and will instead devote its time to examining the land where office space can be built, according to the head of the city's planning committee.
Council isn’t going to be looking at changing the urban boundary, said councillor Peter Hume, who chairs the committee that oversees what sorts of buildings go where. The boundary is the area in the centre of Ottawa that the municipality has designated for new residential development.
”Quite frankly it’s a distraction from some of the real important work we need to do in order to make our city prosperous,” said Mr. Hume.
The priority will be placed on looking at which spaces in the city are zoned for employment. This includes business parks such as the Kanata Research Park close to March Road and industrial lands south of Innes Road and close to Highway 417.
Councillors and staff will be looking at both the areas that have already been designated for employment and other areas that haven’t been but should, said Mr. Hume. This means some lands will be added to that category, while others will be taken away.
He said it’s all part of the city’s efforts to make sure more people are living and working in roughly the same area.
Having a high number of people travelling into the downtown core from suburbs such as Kanata is expensive for the city, which has to maintain roads. There’s also an economic cost stemming from a decline in quality of life, since people are spending more time stuck in traffic in their cars.
Councillors are currently in the midst of reviewing Ottawa’s official plan, a document that says which types of development can go where in the city. It has to be looked at every five years.
The city added 1,103 hectares following its last review in 2009. Councillors initially approved an expansion of 222 hectares but that multiplied this year when the body that oversees city planning decisions in the province, the Ontario Municipal Board, ruled that it had to designate more so it would be in line with provincial rules.
The Ottawa Citizen
"Many Unaware of New Mortgage Rules
in Effect Today: Poll"
The Canadian Press
July 9, 2012
TORONTO — New mortgage rules go into effect Monday in Canada but a recent survey suggests many people are unfamiliar with the changes.
Starting today, lenders can only issue home equity loans up to a maximum of 80 per cent of a property’s value — down from 85 per cent.
The maximum amortization period also drops to 25 years from 30 years — giving borrowers less time to repay the debt in full.
A poll conducted by Pollara for Bank of Montreal found only about half of those surveyed were familiar with the changes brought in by the federal government.
And only 45 per cent of those surveyed June 29 to July 4 were aware that the maximum amortization period has been shortened by five years.
Finance Minister Jim Flaherty announced the new rules on June 21.
The Globe and Mail
"Toronto Condo Market Loses Steam as Investors Bolt"
By Michael Babad
Toronto condo market losing ground
The stock of unsold condos in Toronto is growing as the market for new units loses some steam.
Urbanation, which tracks the Toronto market, reported today that the number of unsold new units hit a record at the end of the second quarter, at more than 18,100 units or about 20 per cent.
At the same time, sales of new units sank to their lowest since about mid-2010, down more than 20 per cent from the first quarter and a whopping 50 per cent from a year earlier, although last year's numbers were particularly strong. And over the course of the first six months of the year, sales are at their second-highest level ever.
Notably, the so-called absorption rate declined to the lowest since late 2008, the depths of the financial crisis.
That's because investors are dropping out, said Derek Holt and Dov Zigler of Bank of Nova Scotia.
"The not-for-occupancy investor that has been driving 45 per cent to 60 per cent of Toronto condo sales in recent years disappeared as the monthly net cash flow to financing and paying condo fees and then renting it out remains negative while rental rates and prices flatten out," they said.
"This hard data confirms the anecdotes of pulled project openings and construction delays this year," the economists added in a research note.
"The macro implication of key relevance here is that this will put downward pressure upon housing starts over [the second half of the year] as builders respond to the inventory overhang and given the big role that multiples in cities like Toronto and Vancouver have played in driving the headline construction figures."
Urbanation also noted the record 52,695 condo units under construction at the end of the last quarter, 88 per cent of them sold.
The Ottawa Citizen
"Average Ottawa Housing Value Up
24 Per Cent Over Four Years "
By David Reevely
OTTAWA — The average value of an Ottawa home has gone up 24 per cent over the past four years, says the province’s property-assessment corporation.
That sets a new baseline for property taxes for the four years to come. In short, if you own a home whose value has increased exactly 24 per cent, your taxes won’t change. If your home’s value has risen more than 24 per cent, your property taxes will go up. If your home’s value has risen less than 24 per cent, your property taxes will go down. Either way, the change will be made one step at a time over the next four years.
That change will happen automatically and separately from property-tax increases voted by city council in each year’s budget. The goal is to make sure the city’s take from property taxes stays the same while the burden is shifted so people whose properties are worth the most pay the most.
A memo from deputy city treasurer Ken Hughes, the city’s chief tax collector, to city councillors Wednesday morning spells that out in numerous ways.
“It is the relationship to the Ottawa average increase of 24 per cent that is important for each property,” he wrote. “Property owners who have an increase in assessment over the four years of 24 per cent will see an increase in their municipal taxes equal to any budgetary increase that may be approved by City Council.” Greater value increases than that mean higher taxes, lower value increases mean lower taxes, even if a property’s value has still increased.
The system works against the city government’s goal of getting more people living downtown. The report from the Municipal Property Assessment Corp. (MPAC) says that property-value increases are concentrated there — downtown neighbourhoods tend not to be not just more expensive than suburban ones, but the gap is growing, the report says. Downtown amenities and congestion in traffic crossing the Greenbelt make the city’s more distant suburbs relatively less desirable, the report says.
Meanwhile, “boutique” neighbourhoods, such as the Glebe, have experienced above average increases in prices. As well, Westboro and other areas close to downtown Ottawa have experienced above average increases in price. Infill properties, on which people can build custom homes, are also in demand.”
The property-tax system is based on the idea that the value of a person’s property is a decent proxy for his or her wealth, though it’s a poor proxy for his or consumption of city services. The city considers denser neighbourhoods cheaper to serve with everything from sewer pipes to libraries to police, but residents of denser neighbourhoods tend to pay higher taxes. And often, people who’ve lived in their homes for decades while the city has grown around them pay high taxes even though most of their worth is tied up in those houses and the only way to get at it is to sell.
Updating the assessments every four years instead of every year — the way MPAC used to do it — is a small move toward reform. It’s meant to smooth out the effects of property-value changes, so at least they’ll be predictable.
Individual homeowners should expect mailings from the corporation about their particular properties in the fall, it says.
The Globe And Mail
"I didn't understand the Home Buyer's Plan. What now?" By John Heinzl
I contributed $25,000 to my registered retirement savings plan for the sole purpose of withdrawing the funds under the Home Buyers’ Plan to buy a condo. Later I learned there is a 90-day waiting period for withdrawals. Does that mean I will not be able to use the money for my down payment? Is there any way I can access these RRSP funds?
The Home Buyers Plan is a great tool for first-time home buyers. It allows you to withdraw up to $25,000 tax-free from your RRSP to buy or build a qualifying home, and to repay the money to your RRSP over a period of up to 15 years. However, your predicament underscores why it’s important to read the fine print before you make any important financial decision.
The Canada Revenue Agency is very clear on the rules. “Your RRSP contributions must remain in the RRSP for at least 90 days before you can withdraw them under the HBP, or they may not be deductible for any year,” the CRA’s website says.
For example, if you made your RRSP contribution on Sept. 1, you would have to wait until Nov. 29 to withdraw the money, or you would not qualify for an RRSP deduction for the funds. (This is assuming you did not have any other money in the RRSP before you made the $25,000 contribution.)
There may be ways around the problem, however, says Camillo Lento, a chartered accountant and lecturer in accounting at Lakehead University.
For example, you could try to delay your closing date and withdrawal until after the 90-day period has passed. The CRA would then allow you to deduct the $25,000 from your income, potentially creating a tax refund.
You need to be aware of another rule, however. Before applying to withdraw funds under the HBP you must have a written agreement to buy or build a home, with the condition that your final withdrawal under the HBP can be no later than 30 days after the closing date. Any withdrawals after the 30-day period would be included in your income and subject to tax.
Keeping these rules in mind, Mr. Lento suggests another option: You could plan to close your home purchase, say, 62 days after you made the RRSP contribution, using a line of credit to make the down payment. You could then withdraw the $25,000 under the HBP 29 or 30 days later and pay off the line of credit. That way, you would meet both the 90-day and 30-day conditions and qualify for a refund.
“If he hasn’t purchased the house yet, he can probably make it work,” Mr. Lento says.
If you’ve already bought the house and it’s not an option to delay the closing, you can still access the $25,000 for your down payment by bypassing the HBP and just making a regular withdrawal from your RRSP, he says. In that case, you would be subject to withholding tax on the funds, but you would qualify for a deduction and tax refund. Ultimately, it would be a wash, because the $25,000 RRSP contribution and $25,000 withdrawal would cancel each other out.
Before you make a decision, I recommend you consult the CRA or a tax professional.