adplus-dvertising
Connect with us

Real eState

Real estate: CMHC deputy chief economist predicts 15% housing price drop by Q2 2023

Published

 on

Canada Mortgage and Housing Corp. is predicting housing prices will continue to drop in 2023, but is warning the fall will do little for affordability.

Patrick Perrier, the housing agency’s deputy chief economist, said in a report Thursday that he expects the national average home price to fall 15 per cent from $770,812 — the peak seen in the first quarter of this year — by the end of the second quarter of 2023.

On an annual basis, he sees prices growing 2.6 per cent in 2022 compared with 21.3 per cent in 2021 and then, declining 6.3 per cent in 2023 and rising 2.1 per cent in 2024.

Perrier attributed the moves to housing demand slowing as interest rates rise.

Despite the price decline, Perrier believes housing affordability will not improve because any benefits that can be reaped from lower prices will be offset by higher interest rates and combined with an increasingly competitive rental market.

“Those who are current renters that were planning to purchase a house, they won’t be able to do it, so they’ll stay in the rental market,” Perrier said in an interview.

“And unfortunately, we might see others that are currently owners that, because of deterioration in their employment and income conditions, might have to sell and go on the rental market.”

Thus, Perrier said less demand and pressure in the ownership market will transfer to more demand and pressure in the rental market.

To make the housing markets for affordable, he feels more supply is needed and it needs to come quicker to keep pace with demand and take pressure off pricing.

Perrier sees the lack of affordability occurring as the country heads into a recession by the end of 2022, but added that the downturn will not be as severe as the last and a recovery will begin in the second half of 2023.

In a separate report, Royal LePage lowered its home price expectations on Thursday. It sees prices in the fourth quarter decreasing compared with the same quarter last year and erasing the gains made at the start of 2022.

The real estate brokerage’s new outlook is based on a survey that predicted the aggregate price of a home in Canada in the final three months of the year will drop 0.5 per cent compared with the fourth quarter of 2021.

That’s down from a July forecast that predicted prices in the fourth quarter to be up 5.0 per cent on a year-over-year basis.

Because home prices follow sales volume trends, Royal LePage CEO Phil Soper expects to see further softening in the final months of the year.

“September did not bring the typical seasonal lift in the number of homes trading hands in this country, a clear indication that our housing market continues to adjust to higher borrowing costs,” Soper said in a statement.

“Our revised outlook has national prices at just below where we ended 2021, erasing the gains made in the first quarter of 2022.”

Source link

Continue Reading

Politics

B.C. Conservatives, NDP both announce plans to help ease B.C. housing crisis

Published

 on

 

Both of the main candidates in British Columbia‘s election campaign pushed their own plans to solve parts of the housing crisis.

B.C. Conservative Leader John Rustad told a news conference in Surrey that his government would end the multi-year permit delays and would get homes built at the speed and scale needed to address the housing crisis.

NDP Leader David Eby went to Cumberland on Vancouver Island to promote his party’s plan to fast-track factory-built homes.

Eby said pre-built homes would cut waste, reduce emissions, and advances in the industry mean the homes are “beautiful and high-quality.”

He said the process was “more like Lego” than normal construction.

“The idea is pretty straightforward. In a controlled factory environment, you can build faster, you can build with less waste and the homes that are built are more consistent and more efficient and it’s cheaper.”

Rustad said the Conservative Party of B.C. would redesign the approval process for home building, setting a six-month limit for rezoning and development permit and three months for a building permit.

“This means that we will significantly be able to improve the time frame it takes to actually get construction happening in this province, and we’ll be working with city halls across the province to be able to meet these timelines,” Rustad said.

If a clear yes or no isn’t issued by a city within that limit, the province would issue the permit, said a B.C. Conservative news release announcing the platform.

Rustad said the party would remove NDP taxes on housing, support transit-oriented communities, reform development cost charges and make taxes fair for homeowners.

“We have so much regulation that has been put in place associated with housing that it makes it really difficult for anybody to be able to actually get through and build things, not to mention the cost,” he said. “So we’ll amend the Local Government Act to prevent any home killing red tape that has been introduced by this government.”

The party’s statement also outlined their zoning plan, adding that it would work with BC Assessment “to make sure that current homeowners don’t get hit with higher tax bills based on future potential.”

The party statement said, if elected, a Conservative government would build new towns, saying B.C. is blessed with an abundance of land, but the NDP refuses to use it to end the housing shortage.

“We will identify land outside the Agricultural Land Reserve that has the potential to support beautiful new communities.”

A statement issued by the NDP on Friday said it would work with industry, municipalities and First Nations to create a provincewide framework for prefabricated homes so builders know what’s required in every community.

It said there would be a pre-approved set of designs to reduce the permitting process, and it would work to develop skills training needed to support prefabricated home construction.

The statement said Scandinavian countries had embraced factory-built homes, which “offer an alternative to the much slower, more costly process of building on-site.”

“By growing B.C.’s own factory-built home construction industry, everyone from multi-generational families to municipalities will be able to quickly build single homes, duplexes and triplexes on land they already own,” Eby said.

The party said legislation passed by the NDP government last year was a “game changer” for the factory-built home construction industry in the province, where there are currently 10 certified manufacturing plants.

Muchalat Construction Ltd. is one of them, and owner Tania Formosa said pre-approved structures speed up the building process considerably.

She said her company’s projects currently take 12 to 13 months to complete, from startup design to getting the house on site.

“If everything was in place and fast-tracked at the beginning and we were able to just fly along, it would probably take three months off the full schedule,” she said.

She said a main issue for modular manufacturers is that work gets stalled if they run into roadblocks with jurisdictions or BC Housing in the approval process.

“There’s no option for the manufacturer to start another project,” she said. “Having our products approved prior to the process would be amazing.”

She acknowledged the potential drawback of pre-approved designs creating a cookie-cutter look for some neighbourhoods.

“Unfortunately (what) happens in your jurisdiction, in your city, is it ends up looking a lot the same, but what are your priorities?”

This report by The Canadian Press was first published Sept. 27, 2024.

Source link

Continue Reading

Real eState

Housing starts up in six largest cities but construction still not closing supply gap

Published

 on

 

The Canada Mortgage and Housing Corp. says construction of new homes in Canada’s six largest cities rose four per cent year-over-year during the first half of 2024, but housing starts were still not enough to meet growing demand.

The agency says growth in housing starts was driven by significant gains in Calgary, Edmonton and Montreal.

A total of 68,639 units began construction, the second strongest figure since 1990, however the rate of housing starts per capita meant activity was around the historical average and not enough “to reduce the existing supply gap and improve affordability for Canadians.”

The report says new home construction trends varied significantly across the markets studied, as Toronto, Vancouver and Ottawa saw declines ranging from 10 to 20 per cent from the same period last year.

Apartment starts in the six regions increased slightly, driven by construction of new units for rent, as nearly half of the apartments started in the first half of 2024 were purpose-built rentals.

But condominium apartment starts fell in the first six months of the year in most cities, a trend which the agency predicts will continue amid soft demand as developers struggle to reach minimum pre-construction sales required.

This report by The Canadian Press was first published Sept. 26, 2024.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Real eState

Mortgage rule changes will help spark demand, but supply is ‘core’ issue: economist

Published

 on

 

TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.

The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.

The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.

CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.

However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.

Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.

This report by The Canadian Press was first published Sept. 17,2024.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Trending