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TORONTO, Nov. 19, 2013 /CNW/ – 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.”
Metropolitan Resale Price Highlights
Resale prices have been stronger than previously anticipated in Canada this year, with the national average price expected to increase 3.1 per cent in 2013 up from the anticipated 0.9 per cent rise in the previous Housing Outlook released in the spring. Prices for existing homes are expected to rise each of the next three years in all nine cities covered in the report. The most notable change is the end to Vancouver’s market correction. According to the Conference Board of Canada, Vancouver sales of existing homes rose sharply at the end of the second quarter of 2013 and exceeded their year-earlier volume for the first time since the third quarter of 2011. Vancouver will remain the most expensive city, with the average resale house price forecast to reach $769,468 by 2015, an increase of more than 4.4 per cent from 2013. Once again, Calgary is expected to see the largest increase in housing prices in percentage terms between 2013 and 2015, with Edmonton and Winnipeg close behind. The rest of the metropolitan areas will experience more moderate growth, in line with the national average.
Average Resale Housing Price by City: Forecast
|City||2013 f||2014 f||2015 f|
|Italics indicate percentage change from previous year.Sources: The Conference Board of Canada; Canadian Real Estate Association; Québec Federation of Real Estate Boards.|
The Metropolitan Housing Outlook, which is produced twice a year, is commissioned by Genworth Canada from the Conference Board of Canada. The report reviews a wide range of housing statistics and offers in-depth analysis of the trends in the housing market for Canada, the Provinces and nine metropolitan areas: Québec City, Montréal, Ottawa, Toronto, Winnipeg, Calgary, Edmonton, Vancouver and Victoria. A copy of the report is available at http://www.genworth.ca/en/pdfs/Metropolitan_Housing_Outlook_Autumn13_EN.pdf.
About Genworth Canada
Genworth MI Canada Inc. (TSX: MIC) through its subsidiary, Genworth Financial Mortgage Insurance Company Canada (Genworth Canada), is the largest private residential mortgage insurer in Canada. The Company provides mortgage default insurance to Canadian residential mortgage lenders, making homeownership more accessible to first-time homebuyers. Genworth Canada differentiates itself through customer service excellence, innovative processing technology, and a robust risk management framework. For almost two decades, Genworth Canada has supported the housing market by providing thought leadership and a focus on the safety and soundness of the mortgage finance system. As at September 30, 2013, Genworth Canada, had $5.6 billion total assets and $3.0 billion shareholders’ equity. Find out more at www.genworth.ca.