Information Watch - August 2011 | August, 2011 |
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Canadian Housing Market to Remain Steady in 2011 Housing starts are forecast to remain steady in 2011 and 2012, according to Canada Mortgage and Housing Corporation’s (CMHC) third quarter Housing Market Outlook, Canada Edition.1 “Housing starts have been strong in the last few months, but are forecast to moderate closer in line with demographic fundamentals,” said Mathieu Laberge, Deputy Chief Economist for CMHC. “Despite recent financial uncertainty, factors such as employment, immigration and mortgage rates remain supportive of the Canadian housing sector.” Housing starts will be in the range of 166,300 to 197,200 units in 2011, with a point forecast of 183,200 units. In 2012, housing starts will be in the range of 161,700 to 207,200 units, with a point forecast of 183,900 units. Existing home sales will be in the range of 425,000 to 472,500 units in 2011, with a point forecast of 446,700 units, essentially the same level as in 2010. In 2012, MLS®2 sales are expected to move up modestly in the range of 407,500 to 510,000 units, with a point forecast of 458,000 units. The average MLS® price increased in the first half of 2011 partly as a result of more higher-end homes sold during that period. For the remainder of 2011, the average MLS® price is expected to moderate. Nevertheless, the annual average MLS® price will experience an overall increase in 2011 compared to last year. As the existing home market moves to more balanced markets, growth in the average MLS® price in 2012 is expected to be more modest. 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. 1 The forecasts included in the Housing Market Outlook reflect information available as of August 12, 2011. Where applicable, forecast ranges are also presented in order to reflect financial and economic uncertainty. 2 Multiple Listing Service® (MLS®) is a registered trademark owned by the Canadian Real Estate Association. Real estate buyers to focus on low interest, ignore market turmoil Canada's real estate market is now expected to grow this year rather than decline, as buyers take advantage of continued low interest rates that are intended to offset recent economic turmoil, economists said recently. The comments came after the Canadian Real Estate Association revised its 2011 national forecast for home resales, citing stronger than expected sales and higher prices in the second quarter. An earlier CREA forecast that called for a one per cent dip in sales this year from 2011. But the association said Tuesday sales should grow this year — albeit less than one per cent above 2010. CIBC deputy chief economist Benjamin Tal said recent stock market uncertainty due to the European debt crisis and the United States credit downgrade is actually helping boost sales in Canada's real-estate market. Bad economic news abroad tends to keep Canadian interest rates low, he said. Since the European and American debt issues came to a head in recent weeks, economists have been predicting the Bank of Canada will leave its key rate untouched at one per cent until at least next year. That's a change of opinion since last winter, when economists widely expected Canada's central bank would begin hiking its rates sometime in 2011 as the economy strengthened — putting upward pressure on the price of borrowing. With the global economy now looking weaker than expected, and the U.S. Federal Reserve promising last week that it will keep its key short-term rate at an all-time low for another two years, the Bank of Canada is now expected to put off raising its short-term lending rates. "The uncertainty globally is really benefiting mortgage holders because it's really postponing the increase in interest rates in Canada," Tal said, explaining that when the stock market turns volatile, real estate becomes an attractive investment because of its security. "Many people can use this opportunity to look into extremely low mortgage rates, so again the misery of other people elsewhere is helping Canadian home buyers." Sonya Gulati, an economist at TD Economics said the bank is anticipating that sales will be a bit more subdued in the next two months, but buyers, especially first timers and immigrants won't likely be deterred in the longer term as interest rates stay low. "People may be waiting to see whether or not they want to purchase homes, see if things turn for the better. It really has been a roller coaster for the last little while so we anticipate a little bit more subdued activity in August and September," she said. "(The stock market) will be a factor in their decision making process, but at the end of the day one of the key things for people is the interest rate and mortgage rates are still very low and they may actually want to enter the market for that reason despite the uncertainty out there." Meanwhile, CREA's chief economist Gregory Klump said it is too early to judge whether buyers are moving towards or shying away from real estate due to volatile stock markets. But he said historically, real estate does well during times of uncertainty. "During periods of financial market upheaval the Canadian real estate market has remained far more stable," he said, adding that even though some investors put off buying high end homes during the financial crisis of 2008 and 2009, those buyers returned to real estate soon after recovery began. "The last time we had financial market instability, the housing market wasn't immune, but it was certainly less volatile and certainly Canadians recognize that and feel comfortable investing in their home." Overall, CREA said Tuesday that 450,800 housing units are expected to be sold across Canada under its Multiple Listing Service in 2011, and the average selling price will be slightly higher. In May, it had estimated 441,100 units would be sold through the MLS. About 90 per cent of home resales in Canada are listed on MLS. Both Gulati and Tal said they expect the market to cool off in 2012 once interest rates rise again. Gulati said home prices could fall as much as 10 per cent, while Tal said they could fall between five and 10. Gulati described this as a "correction" while Tal said it was an "adjustment," but "nothing to write home about." Meanwhile, the association said it was revising its sales expectations for 2012 downward to 447,000 units, roughly on par with the 10-year average. On a regional basis, British Columbia's 2011 sales forecast has been revised slightly higher as home sales in the province appear to have bottomed out soon than predicted, while stronger than expected activity in Ontario is expected to offset slightly softer than anticipated demand in Quebec, Manitoba and Newfoundland and Labrador. CREA said it now expects the national average home price will rise 7.2 per cent in 2011, to $363,500. The previous estimate in May was $352,500. The upward revision reflects increases in the second quarter in Vancouver and acceleration in other parts of the country, particularly Toronto. Vancouver has experienced a surge in multimillion-dollar home sales this year. CREA said the two markets have a high number of sales and average price, so they play a big part in influencing the national average. Additional new listings should also result in a more balanced resale housing market in most provinces, with the national average price forecast to stabilize in 2012. Canadian home sales stable in July According to statistics1 released today by The Canadian Real Estate Association (CREA), national resale housing activity was stable on a month-to-month basis in July following an uptick in June. Highlights: • Sales activity was stable from June to July, but posted a big year-over-year gain due to weakened demand in July 2010.
• Year-to-date sales continue to run in line with the ten-year average.
• The number of newly listed homes inched up by less than one per cent from June to July.
• The national housing market remains firmly entrenched in balanced territory.
• The national average price posted the largest year-over-year gain since April 2010, but was below where it stood in June.
• Upward skewing of the national average price is diminishing due to fewer expensive sales and a declining share of national activity in Vancouver and Toronto. National home sales activity held steady in July 2011 compared to the previous month, with just over half of local markets posting month-over-month gains.
Major markets that saw gains compared to June include Edmonton, Montreal, as well as Newfoundland and Labrador. Activity also held steady in Toronto, while Vancouver recorded a small decline. “The continued stability in national sales activity shows that homebuyers remain confident about the soundness of investing in a home,” said Gary Morse, CREA’s President. “Mortgage interest rates are low and keeping home affordability within reach, making it an excellent time for buyers to take advantage of very favourable financing. Prices and affordability evolve differently among local markets, so buyers and sellers should consult their local REALTOR® to better understand how the outlook for housing supply, demand, and prices is shaping up in their housing market.” Actual (not seasonally adjusted) sales activity came in 12.3 per cent above national levels reported one year earlier. This increase reflects weakened activity in July 2010, when levels for the month reached their lowest point since 2002. A total of 284,537 homes have traded hands via Canadian MLS® Systems so far this year. This stands just 1.6 per cent below levels in the first seven months of last year, and continues to run in line with the ten-year average. The number of newly listed homes edged up by less than one per cent from June to July. New listings were down in 60 per cent of local markets, but increased in many large urban centres including Toronto, Vancouver, Edmonton, and Ottawa. The national housing market remains firmly planted in balanced territory. The national sales-to-new listings ratio, a measure of market balance, stood at 51.8 per cent in July, which is little changed from 52.3 per cent in June. Based on a sales-to-new listings ratio of between 40 to 60 percent, about three in every five local markets in Canada were balanced in July. Half of the remaining markets may be classified as sellers’ markets, with a sales-to-new listings ratio of above 60 per cent. The number of months of inventory stood at 6.1 months at the end of July on a national basis, which is little changed from the end of June (6.0 months). The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and is another measure of the balance between housing supply and demand. The actual (not seasonally adjusted) national average price for homes sold in July 2011 stood at $361,181, which is the lowest level since January. While up 9.3 per cent from its year-ago level, the increase reflects a short-lived decline in the average price following the introduction of the HST in B.C. and Ontario, and tighter mortgage regulations earlier in 2010. “Earlier this year, the national average price was being skewed upward by sales in some expensive Vancouver neighbourhoods, but this factor is now diminishing,” said Gregory Klump, CREA’s Chief Economist. “Upward skewing of the national average price is also shrinking due to overall sales trends in Vancouver, and most recently in Toronto. Their market shares as a percentage of provincial and national sales activity are declining from the elevated levels seen in the first half of the year.” “Changes in the national average home price are open to being misinterpreted,” added Klump. “They often signify changes in the mix of sales activity across and within local markets, rather than a rising or falling price trend for typical homes in a specific market.” “The national share of sales activity in some of Canada’s more expensive urban centres may retreat further from elevated levels recorded earlier this year, resulting in an easing trend for the national average home price,” he added. “Even so, the stability of Canada’s housing market will likely continue to stand in stark contrast to further expected volatility in financial markets.” PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month. CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighborhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types. MLS® is a co-operative marketing system used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale. The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 100,000 REALTORS® working through more than 100 real estate Boards and Associations. 14 Suprising Uses for Your Microwave 1. Disinfecting and Deodorizing Sponges
Don't throw out the kitchen sponge that smells like last night's salmon. Soak it in water spiked with white vinegar or lemon juice, then heat it on high for 1 minute. (Use an oven mitt to remove it.) This will also disinfect any sponges you used to wipe up the juices from a raw chicken.
2. Cooking an Entire Dinner in Under 10 Minutes
Not just the TV variety. We mean braised salmon with green beans and mashed potatoes. Use the microwave for any recipe that calls for braising, poaching, or steaming. Just subtract about three-quarters of the cooking time. Remember to stir liquids often to redistribute the heat, and always take the food out a minute or two before it's completely done, since it will continue to cook. 3. Disinfecting Plastic Cutting Boards
Wash the board well, rub it with the cut side of a lemon, then heat for 1 minute. 4. Making Potatoes
While the microwave won't give you a baked potato with a crisp skin, it will cook the average russet in about 4 minutes. You can simultaneously cook as many as will fit. (The general rule for heating more food is to check for doneness every 30 seconds beyond the regular cooking time.) Prick the potatoes all over with a fork and cook for 2 minutes. Turn them over and cook for 2 to 3 minutes longer. For mashed potatoes, be sure to heat the milk in the microwave before adding it. (Cold milk makes for cold mashed potatoes.) 5. Softening Brown Sugar
Keep the sugar in its plastic packaging, add a few drops of water, and heat on medium for 10 to 20 seconds. 6. Decrystallizing Honey
Honey that has solidified can be brought back to liquid life by uncovering the jar and heating on medium power for 30 seconds to 1 minute. 7. Proofing Yeast Doughs
Yeast doughs that normally take an hour or more to rise at room temperature can be proofed in the microwave in about 15 minutes. Place the dough in a very large bowl and cover with plastic. Place an 8-ounce cup of water in the back of the microwave with the bowl of dough in the center, and set the power as low as possible (10 percent power). Heat for 3 minutes, then let the dough rest in the microwave for 3 minutes. Heat for 3 minutes longer, then let rest for 6 minutes. The dough will double in bulk. 8. Heating up Health Aids
You use a microwave to reheat your coffee, so why not use it to heat and reheat gel packs for headaches? (Don't do this with a metal-wrapped pack.) 9. Warming Beauty Products
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