The Edmonton Real Estate Blog, Market Information, Advise & Opinion

OTTAWA, August 31, 2010 — After rebounding in the second half of 2009 and early 2010, housing starts are expected to moderate in the second half of 2010. Starts are expected to stabilize at levels consistent with demographic fundamentals in 2011, according to Canada Mortgage and Housing Corporation’s (CMHC) third quarter Housing Market Outlook, Canada Edition.¹

Housing starts are expected to be in the range of 170,200 to 198,400 units in 2010, with a point forecast of 184,900 units. In 2011, housing starts will be in the range of 146,900 to 210,500 units, with a point forecast of 176,900 units.

"Housing starts will moderate in the coming months as activity becomes more in-line with long term demographic fundamentals,” said Bob Dugan, Chief Economist for CMHC.

Mr. Dugan also noted that the existing home market conditions will remain balanced over the next two years as MLS^®2 sales ease and inventory levels remain elevated. Existing home sales will be in the range of 450,000 to 485,700 units in 2010, with a point forecast of 463,800 units. In 2011, MLS^® sales will move lower and are expected to be in the range of 425,000 to 490,700 units, with a point forecast of 456,000 units.

With an improved balance between demand and supply, the average MLS^® price is expected to edge lower through the end of 2010 and then rise modestly in 2011.

As Canada's national housing agency, CMHC draws on more than 60 years of experience to help Canadians access a variety of quality, environmentally sustainable and affordable homes. 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 vital decisions.

¹ The forecasts included in the Housing Market Outlook are based on information available as of July 30, 2010. Where applicable, forecast ranges are also presented in order to reflect economic uncertainty.

² Multiple Listing Service^® (MLS^®) is a registered certification mark owned by the Canadian Real Estate Association.

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Homeowners are in the best shape when it comes to financial fitness in Canada, says a new survey. Sixty-five per cent of homeowners pay off their credit card balances each month (vs. 48 per cent of non-homeowners). A quarter of homeowners with mortgages have made a lump sum payment or accelerated their mortgage payments in the past year, according to the survey. It was sponsored by Genworth Financial Mortgage Insurance Company Canada.

Almost half of homeowners were able to pay all of their bills and save some money in the past year, suggesting a strong correlation between homeownership and financial fitness, the company says.

“Homeownership is an achievable goal for those who are prepared,” says Peter Vukanovich, president and COO Genworth Financial Canada. “Homeownership helps people focus on their financial situation and get their fiscal house in order.”

The Financial Fitness survey was conducted in conjunction with the Canadian Association of Credit Counselling Services (CACCS). Compared to the same survey undertaken in 2007 when the economy was booming, Canadians are even more likely now to say their financial fitness is good (55 per cent vs. 50 per cent).

Other findings of the survey:

• 49 per cent of homeowners made down payments of 20 per cent or more on their purchase;

• 13 per cent of homeowners say they are in great financial shape;