Canadian Housing Market Remains Solid as Economy Continues to Improve | Bedford Hills Homes

While housing starts have slowed since their burst from 2010 to 2012, there is still room for future growth and the Canadian residential market remains solid, according to the Conference Board of Canada Autumn Metropolitan Housing Outlook commissioned by Genworth Canada (the report). The report notes that this stability is due in part to housing supply continuing to be in line with demographic requirements, which will allow average new and resale prices to continue to grow, albeit moderately, in the foreseeable future.

"The housing market has transitioned back to a more sustainable pace and data suggests that it will remain stable," said Brian Hurley, Chairman and CEO of Genworth Canada. "This means a healthy market with reasonable growth, which will enable Canadians to have more confidence in both home ownership and its relative affordability."

The report confirms Canada's continuing economic recovery, with GDP and employment both forecast to grow in all regions across the country over this year and next. While the Conference Board predicts mortgage rates to rise gradually, employment and personal income gains should allow consumers to adapt to the anticipated increases. The report also notes that while new home mortgage approvals grew in 2012, the total number of new and resale mortgage approvals is expected to be lower in 2013 by 2.3 per cent. However, even though new home mortgage approvals are expected to continue to decline in 2014 because of only modest growth in the new home market, resale mortgage approvals are expected to rise again in 2014 by 2.9 per cent. As a result of growth in prices for new and existing homes, the dollar volume of mortgage approvals is also expected to rise through 2014 in both the high-ratio and conventional markets.

"In short, Canadian housing markets should land softly," said Robin Wiebe, senior economist, Centre for Municipal Studies at The Conference Board of Canada. "A crash would require a significant negative surprise like an interest rate spike or employment collapse. Since no such shock is in the cards in Canada, a housing crash like the one in the U.S. is nowhere near a possibility."

Regional Highlights

   -- Atlantic Canada is expected to see a sharp drop in housing construction, 
      but with the exception of a slight decline in existing home prices in 
      2013, new and existing home prices should enjoy consistent growth over 
      the next several years 
 
   -- Quebec housing starts should continue to decline, after reaching a peak 
      in 2010, in order to better match demographic requirements 
 
   -- Ontario housing starts are expected to fall in 2013 for the first time in 
      four years, but are forecast to recover in 2014 before increasing much 
      more significantly through 2015 and 2016 
 
   -- The Prairies are expected to continue to enjoy healthy population growth, 
      which will help sustain housing demand and allow housing starts to stay 
      high 

http://online.wsj.com/article/PR-CO-20131119-903062.html?dsk=y