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Residential construction investment - Third quarter 2007
Residential construction investment achieved a new record in the third quarter of 2007, reaching $24.3 billion, an increase of 9.0% over the same quarter in 2006. Increases were seen in new housing (+10.1%), renovations (+8.4%) and acquisition costs (+5.7%).
Spending for new residential construction climbed to $12.4 billion, a 10.1% increase over the third quarter of 2006. Single-family home investment made the most significant contribution to the growth in this component, increasing 10.9% to $7.9 billion. Apartment/condominium construction increased by 6.2% to $2.6 billion. Investment in double and row housing also rose significantly, with respective gains of 18.4% and 16.2%.
The rising levels of investments for new housing were largely brought about by significant cost increases over the third quarter of 2006.
In constant dollars, spending for the construction of new single-family housing rose 2.2% over the third quarter of 2006. Semi-detached and row housing saw respective increases of 7.9% and 7.2%, while spending for apartment/condominium housing fell by 3.2%.
The demand for housing continued to be supported by the encouraging employment situation, growing disposable incomes, appealing financing possibilities and Western Canada's dynamic economy.
However, the decreasing affordability of housing, due to rapidly increasing prices for new housing and to recent mortgage rate increases, could adversely affect demand.
Renovation spending grew 8.4% from the third quarter of 2006 to $9.8 billion. This accounted for 40.3% of total residential investment. Acquisition costs increased 5.7% to $2.1 billion.
Increases were recorded in all the provinces and territories. The largest increase (in dollars) occurred in Alberta (+17.4% for a total of $3.9 billion), in large part due to increased spending for the construction of new housing.
Quebec followed with an investment increase of 9.2% to $5.4 billion. This is mainly due to new construction and renovations.
British Columbia also saw a sharp increase (+11.2%) for a total of $3.8 billion.
Vigorous renovation spending led investment growth in Ontario (+2.3% to $8.4 billion).
The total value of residential construction investments for the first three quarters of 2007 was $65.4 billion, up 7.5% over the same period in 2006.
Note: Residential construction investment is divided into three main components. The first is new housing construction, which includes single dwellings, semi-detached dwellings, row housing and apartments, cottages, mobile homes and additional housing units created from non-residential buildings or other types of residential structures (conversions). The second component of residential construction investment (renovations) includes alterations and improvements in existing dwellings. The third component is acquisition costs, which refers to the value of services relating to the sale of new dwellings. These costs include sales tax, land development and service charges, as well as record-processing fees for mortgage insurance and the associated premiums.
Because ownership transfer costs are not included in the investment totals presented in this release and in CANSIM table 026-0013, the figures here do not match the figures published in the National economic accounts (CANSIM table 380-0010).
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New report shows who gets hurt most by Canada's housing crisis
OTTAWA - A detailed report on the almost 1.5 million Canadian households without acceptable housing shows that renters, new immigrants, lone parent families, young adults, the elderly, and Aboriginal households are hardest hit by the lack of affordable housing. The report, released today by the Co-operative Housing Federation of Canada (CHF Canada), also shows the greatest housing need is in the three territories and in British Columbia, Nova Scotia and Ontario.
"Behind the housing statistics are real people who pay the price for
Canada's lack of affordable housing," said Nicholas Gazzard, Executive
Director of CHF Canada. "This report tells us who those people are and where
the problem is worst."
Written by economics researcher Will Dunning, the report, entitled
"Dimensions of Core Housing Need in Canada," looked at the most recent housing
data (2001) from Canada Mortgage and Housing Corporation. It uses the CHMC
definition of "Core Housing Need," which considers a household to be in need
if its housing falls below at least one of the standards of adequacy,
suitability or affordability (costs more than 30% of before-tax household
income).
Renters account for 68.1% of core housing need. Lone-parent families have
a rate of 30%, double that of other Canadian households. Immigrants have
higher rate of need than non-immigrants; for those households who have
recently arrived in Canada, the rate is triple that of non-immigrants. Rates
are also high among those 15-24 and those over 75. Across Canada, the
incidence of core housing need for Aboriginal households in 78% higher than
that for non-Aboriginals.
"This report paints a human picture of why we need to maintain the
federal investment in community housing," said Sharon Chisholm, Executive
Director of the Canadian Housing Renewal Association. "It's a first important
step toward resolving the core housing need that affects so many Canadians."
The Dunning report indicates that affordability is the most common
difficulty in finding acceptable housing, with more than 89% of the
1.5 million households claiming it as a problem. In his report, Dunning
writes, "While the total housing need problem in Canada is quite large, Canada
as a society can afford to address these problems."
The full text of the report and a backgrounder is available on the CHF
Canada website at www.chfcanada.coop.
The Co-operative Housing Federation of Canada is the national voice of
the Canadian co-operative housing movement. Its 1030 members and associates
include nearly 875 non-profit housing co-operatives as well as organizations
that are closely linked with housing co-operatives.
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Ontario among the worst for housing need
OTTAWA - A detailed report on the almost 1.5 million Canadian households without acceptable housing shows Ontario has one of the highest percentages of households in core housing need, with 15.1% of households in need. The territories and British Columbia have more households in need (Nunavut (38.8%), NorthWest Territories (17.4%), Yukon and British Columbia (15.8%)). The rate in Nova Scotia is almost equal to Ontario at (15.2%). The Canada-wide percentage of households in core housing need is 13.7%, with Alberta lowest at 10.5%.
The report, released today by the Co-operative Housing Federation of
Canada (CHF Canada), also shows renters, new immigrants, lone parent families,
young adults, the elderly, and Aboriginal households are hardest hit by the
lack of affordable housing.
"This report shows that rate of core need in Ontario is among the worst
in the country," said Tom Clement, Executive Director of the Co-operative
Housing Federation of Toronto. "It confirms what those of us who work in
non-profit housing already know - the lack of affordable housing is doing real
damage to millions of Canadian families."
Written by economics researcher Will Dunning, the report, entitled
"Dimensions of Core Housing Need in Canada," looked at the most recent housing
data (2001) from Canada Mortgage and Housing Corporation. It uses the CHMC
definition of "Core Housing Need," which considers a household to be in need
if its housing falls below at least one of the standards of adequacy,
suitability or affordability (costs more than 30% of before-tax household
income.)
Renters account for 68.1% of core housing need. Lone-parent families have
a rate of 30%; double that of other Canadian households. Immigrants have a
higher rate of need than non-immigrants; for those households who have
recently arrived in Canada, the rate is triple that of non-immigrants. Rates
are also high among those 15-24 and those over 75. Across Canada, the
incidence of core housing need for Aboriginal households is 78% higher than
that for non-Aboriginals.
"This report paints a human picture of why we need to maintain the
federal and provincial investment in community housing," said Clement. "It is
a first important step towards resolving the core housing need that affects so
many Canadians."
The Dunning report indicates that affordability is the most common
difficulty in finding acceptable housing, with more than 89% of the
1.5 million households claiming it as a problem.
The full text of the report is available on the CHF Canada website at
www.chfcanada.coop
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Housing Demand Will Remain Strong in London
LONDON - Demand for housing will continue to be strong in 2008 in the London Census Metropolitan Area (CMA), with new home starts and existing home sales well above their historical averages, according to Penny Wu, Canada Mortgage and Housing Corporation's (CMHC) Market Analyst for the London area. CMHC released its latest forecast today at the annual London Housing Outlook Conference.
"Homes in the London CMA are relatively more affordable than homes in
most of the surrounding census metropolitan areas. Low mortgage rates and
ample choice in both the new and existing home markets will continue to
attract Londoners to move into homeownership." said Wu.
<<
Other highlights of the report include:
- New home construction will top 3,000 units for the sixth year in a
row in 2008. Single-detached home starts will be close to 2,000 homes
in 2007 and 2008. Rental apartment construction will remain robust.
- Existing home sales in 2007 will set a record of 9,400 sales in 2007
and decline a mere four per cent to 9,060 sales in 2008.
- Average new home and existing home prices will increase more than six
per cent in 2007 and four per cent in 2008. New listings in the
resale market will continue to increase and reach a record level of
15,760 homes in 2008. The resale market will move towards a more
balanced state.
>>
"Moreover, employment growth will support income growth and attract
people to the London area. Demand for ownership and rental homes will stay
high," added Wu.
In Ontario, there will be increasing demand for multi-family homes.
"Higher mortgage carrying costs and slower job growth in higher paying
employment sectors in 2008 across Ontario will shift demand towards the less
expensive multi-family home sector, which includes townhomes and apartments,"
said Ted Tsiakopoulos, CMHC's Ontario Regional Economist. "A tight resale
apartment market combined with a backlog of apartment sales that have yet to
commence construction, will further support activity in the multi-family home
sector," added Tsiakopoulos
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'Leading the Way' - Increasing and Improving Affordable Housing
Leading industry representatives brainstorm community housing solutions
at the 2007 Annual Conference and Trade Show
TORONTO - Over 1,500 representatives from Ontario's affordable housing sector gather today for a three-day conference and trade show featuring 103 education and conference workshop events along with 75 trade show booths.
The 19th Annual Ontario Non-Profit Housing Association (ONPHA) conference
and trade show's theme of "Leading the Way" is evident by the caliber of
sector staff, volunteer board members and tenants working together to find
solutions to today's most pressing affordable housing challenges.
"ONPHA's conference is definitely leading the way in bringing top-notch
events that reflect the knowledge, expertise and leadership within our
sector," says Deborah Schlichter, President of ONPHA. "Whether it is the
volunteer board members, the dedicated staff or the tenants working to improve
their housing, leadership is the cornerstone of successful, affordable
housing."
GOVERNMENT SUPPORT:
Ontario's new Minister of Municipal Affairs and Housing, The Honourable
Jim Watson, in attendance to address the conference delegates, reinforces the
government's plan for housing in the province.
"Affordable housing is pivotal toward ensuring healthy communities, and
while the Ontario government has made significant investments, we must all
continue to think of new and innovative ways to address those individuals in
Ontario who need help," says Minister Jim Watson. "The Federal government also
has a role to play and needs to come to the table to help create a national
housing strategy. I look forward to further discussions with ONPHA as we move
forward and on a strategy to address these issues."
AWARDS OF EXCELLENCE:
Winners of ONPHA's Awards of Excellence will also be announced throughout
the course of the conference. Categories include: The Award for Excellence;
The Outstanding Leadership Award; 20 Years of Distinguished Service Award; The
Tenant Achievement Recognition Awards. All winners' names will be available on
November 22, 2007 at www.onpha.org.
ABOUT THE CONFERENCE:
The 19th annual conference program boasts a variety of colorful and
qualified speakers, panelists and moderators from home and abroad. Examples
include:
Andy Barrie, Host of CBC Radio's Metro Morning, moderates a panel on
"Creating a New US" in the multicultural GTA. Five years from now almost
100 per cent of demand for new housing will come from new Canadians, and this
panel will explore traditional approaches to multiculturalism and find new
ways to integrate power structure without diminishing the healthy nature of
strong cultural identities.
Marc Trotz, Director of Housing and Urban Health for the San Francisco
Department of Public Health, leads a session entitled Homelessness: Inspiring
Solutions. Trotz argues that housing is a health care issue and that stable
and supportive housing environments must be developed to make meaningful and
lasting improvements.
Liz Cross, former Executive Director of Harvest Housing Group, Apex
House, in England and a consultant to UK housing providers returns to the
ONPHA conference again this year to discuss alternatives to amalgamations - a
shared service model that works in the UK as well as a workshop on creating
entrepreneurialism in non-profits.
The conference attracts a variety of business leaders, landlords, tenants
and government representatives under a single roof to discuss a wide variety
of subjects, including:
Social and supportive housing issues: homelessness, the realities of
poverty, the role of shelters, housing people with active addictions,
handling dementia and facilitating community gardening.
Economic issues: entrepreneurialism, fundraising and asset management.
Administrative issues: building administration, zoning, legal contracts,
maintenance, taxes and energy efficient building.
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Kitchener Resale Home Sales to Reach All-time High in 2007
KITCHENER - Kitchener existing home sales will reach a record high of 7,000 in 2007 and remain solid at 6,700 in 2008, according to Erica McLerie, Canada Mortgage and Housing Corporation's (CMHC) Market Analyst for the Kitchener Census Metropolitan Area (CMA). CMHC released its latest forecast for the Kitchener CMA on November 14, 2007, at the annual CMHC Housing Outlook Conference.
"Demand for housing in the Kitchener CMA will remain strong," said
McLerie. "The high cost of new single-detached homes will encourage homebuyers
to purchase either a new multiple-family home or an existing home. Price
conscious homebuyers will keep existing homes sales at a very strong level,"
added McLerie.
Other highlights of the report include:
- Anticipated strong sellers' market conditions imply prices will be
growing faster than inflation. The average price of an existing home
will reach $262,000 in 2008.
- Rising new home prices, greater choice in the resale home market and
less than robust labour markets will keep housing starts below the
annual average recorded in the first half of the decade.
- Homes starts in the Kitchener CMA will reach 2,550 this year and
2,650 in 2008. Multiple-family homes will continue to be a less
expensive option to higher-priced single-detached homes. With more
compact development on Greenfield land and infill housing encouraged,
the focus of new construction will shift away from the
single-detached home toward higher density forms of housing.
- Relatively more affordable existing home prices, a high level of new listings, higher but still historical low mortgage carrying costs through diverse home financing options, limited choice in the new home market and continued population growth will contribute to record existing home sales in 2007.
In Ontario, there will be increasing demand for multi-family homes.
"Higher mortgage carrying costs and slower job growth in higher paying
employment sectors in 2008 across Ontario will shift demand towards the less
expensive multi-family home sector, which includes townhomes and apartments,"
said Ted Tsiakopoulos, CMHC's Ontario Regional Economist. "A tight resale
apartment market combined with a backlog of apartment sales that have yet to
commence construction, will further support activity in the multi-family home
sector," added Tsiakopoulos.
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Construction begins on Canada's greenest housing development
34-unit development by Rodeo Fine Homes is one of only a few developments in North America to be built entirely to Leadership in Energy and Environmental Design (LEED®) platinum specifications, which is now a world-wide sustainable building rating system.
NEWMARKET - A ceremony was held November 14, 2007, in Newmarket, Ontario that marked the start of construction on Canada's greenest low-rise development.
Not a typical ground breaking, Rodeo Fine Homes - in partnership with the Town of Newmarket and the Canada Mortgage and Housing Corporation - celebrated the occasion with a high jump bar raising ceremony to symbolize Rodeo's leap to new heights in environmentally progressive housing. "We designed these homes for the green consumer, and we believe there is a strong market for homes that contribute to a healthier, more sustainable lifestyle," said Vince Naccarato of Rodeo Fine Homes. "We're raising the bar to meet this demand and to provide consumers with the best value."
Each of the 34 Eco Logic homes will significantly reduce the environment impact or "footprint" of the homes, compared with conventional development. For example, the primary heating source will be renewable solar energy, with a small high efficiency tankless gas boiler serving as the secondary heating source. This is possible because the homes will be super insulated, with increased basement, wall, underslab and attic insulation.
Heat recovery systems will be installed to reclaim heat from drain water and ventilation exhaust. Rain water will be collected in an underground cistern and used to flush the ultra low flow toilets and irrigate the drought resistant landscaping. The homes will maximize the use of daylight, and have either compact florescent lighting that is 75% more efficient or LED lights that are 95% more efficient than incandescent bulbs.
In addition to this environmentally sensitive design, Rodeo Fine Homes has put in place new building and material sourcing practices that will reduce construction waste by 65%, prevent soil erosion, leave about 25% of the lots untouched and naturally green, source local materials, use Forest Stewardship Council (FSC) certified wood, and maximize the recycled content in all of the materials used. Additionally, the homes are designed to have superior indoor air quality using advanced air filtration, mechanical ventilation, and source reduction design.
The project is a unique collaboration with the Town of Newmarket and the Canada Mortgage and Housing Corporation. Originally, the Town made it a condition of sale that these lots have homes that use at least 25% less fresh water, have 60% less discharge into the storm and sanitary sewers, produce 60% less greenhouse gas emissions, and use 60% less energy compared to conventional homes. Rodeo Fine Homes won the bid and will exceed all of these targets, as much as doubling the water conservation target.
"Newmarket has a long standing commitment to the environment, and has established a national reputation of being green. We are so pleased to have played a part in bringing Canada's greenest community to Newmarket and know that there is a market for these homes in our community," said Newmarket Mayor Tony Van Bynen.
The LEED rating system has achieved a strong market share in commercial construction, but is just beginning to impact the single family low-rise market. "LEED provides a full environmental assessment of the home and the construction process and, to achieve the higher ratings like gold and platinum, there are very significant
changes to the building process and the design of the home that needed to happen," explains Andrew Bowerbank, Executive Director of the World Green Building Council. "This is the future of home building, in that is the future more and more consumers want and it is the future we all need," he added.
LEED has eligible points in six performance categories: Location and Linkages, Sustainable Sites, Water Efficiency, Energy and Atmosphere, Materials and Resources, and Indoor Environmental Quality, and offers additional credits for Innovation and Leadership. On this scale, a typical new suburban home would get only 15 points, well below any of LEED's four achievement levels: Certified at 45 points, Silver at 60 points, Gold at 75 points, and Platinum requires 90 points. Rodeo's Eco Logic Homes are all designed to achieve at least 96 points on this scale and will achieve a platinum rating when they are finally assessed after completion.
Ontario's Environment Commissioner, Gord Miller, was also on hand to praise the town and the builders for taking this bold step, and to challenge the rest of the building community to build to this level and to raise the bar even higher. "I want to commend all those home owners who have purchased energy efficient new homes or retrofitted their existing homes, but we need to think about more than just energy," Miller said. "The residential sector is responsible for consuming 60% of the fresh water and upward of 30% of our annual forestry resources, so for all our benefit, we need to learn how to build and live in a more sustainable way."
The Rodeo's Eco Logic development, situated near nature trails and urban amenities, is just south of the new Magna Centre on Mulock Drive. Purchasers can choose from single story or two storey designs that range from 2200 to 3500 square feet on 40, 45, and 60 foot wide lots. While pricing is not finalized on the project, the homes will cost approximately 10% more than conventional homes. However, the increased mortgage payments will be off-set by the monthly energy cost savings, so the homes will remain quite price competitive.
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Developers and Builders Alliance Community Advancement Awards 2007 held in Palm Beach Florida
MIAMI, FL. - This year's much anticipated Developers and Builders Alliance Community Advancement Awards 2007, held at the beautiful Mar-A-Lago Club in Palm Beach Florida, was a resounding success!
It was an evening full of glamour and winners. The event brought together the development and building industry's most distinguished business leaders, political heads of state and opinion influencers.
Developers and builders were recognized with awards in multiple categories including Project of the Year, International Development Companies & Projects, Best Contractor of the Year, Best Professional Services Firm and Special Awards of Excellence.
This year's winners included Regalia Holdings, National Community Renaissance, Straticon Construction, Beame Architectural Partnership, Wave Group Development, Swanke Hayden Connell Architects, KRAFT Construction, DooleyMack Constructors of South Florida, Rodgers Builders, Charles H. Benson & Associates Architects, Borges & Associates, KM Plaza Construction, Sky Development, G & D Developers, VOA Associates, Inmobiliaria Inplomo, DIURSA Development Group, Adsum Group, LXR Luxury Resorts, EDI Architectural, ADG Group, Formworks, MC Velar Construction, Hypower, M+P Reynolds, Continental Florida Materials, Vila & Son, CB Richard Ellis, McCabe Research & Consulting, Fullerton Diaz Architects, EA Fish Associates, The Capponi Group, Shefaor Development, Terra Group, DYL Group, Central Concrete Supermix, Moss and Associates, Kobi Karp Architecture & Interior Design, Tower/OHL Group and Africa Israel USA, ACGG Development Group, CABI Developers, Groupe Pacific and Grupo Mall.
The Sponsors of this year's event were Quinco Electric and AC Graphics of Miami. The DBA has extended a special gift donation of $20,000 to The Miami Rescue Mission from the proceeds of the event. This donation is in support of MRM's mission of reaching out to those less fortunate in our community and inspiring hope with human compassion through the love of God.
The DBA's vision is to be the most influential trade group and common voice for all professionals in the building and construction industry globally. It is through our strong alliances, our pursuit of excellence, the sharing of experiences and learning from each other that we look to improve the quality of life in our neighborhoods for the benefit of its citizens and future generations. Through our mission... developers, builders and civic leaders together can "Build a Better World."
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Non-residential Building Construction Price Index Third quarter 2007
The composite price index for non-residential building construction increased 1.6% from the previous quarter to 159.9 (1997=100) in the third quarter, and 9.6% from the third quarter of 2006. As in the first half of 2007, the quarterly increase was mostly the result of higher labour and material costs, and the persistent strength of the non-residential building construction market.
Western Canada recorded the highest increases from the second quarter of 2007, with Edmonton posting a 3.3% increase, followed by Vancouver (+2.7%) and Calgary (+2.5%). Smaller upward movements were recorded in Eastern Canada, with Halifax recording a rise of 0.8%, followed by Toronto (+0.7%), Ottawa–Gatineau, Ontario part (+0.5%) and Montréal (+0.2%).
Edmonton had the largest change (+17.9%) from the third quarter of 2006, followed by Calgary (+17.1%), Vancouver (+13.3%), Ottawa–Gatineau, Ontario part (+6.5%), Toronto (+6.4%), Halifax (+5.9%) and Montréal (+3.4%).
Three construction categories (industrial, commercial and institutional buildings) are represented by selected models (a light factory building, an office building, a warehouse, a shopping centre and a school).
Besides the CMA and composite indexes, a further breakdown of the changes in costs is available by trade group (structural, architectural, mechanical and electrical) within the building types.
These price indexes are derived from surveys of general and special trade group contractors. They report data on various categories of costs (material, labour, equipment, taxes, overhead and profit) relevant to the detailed construction specifications included in the surveys.
| Non-residential building construction price indexes1 |
| |
Third quarter 2007 |
Third quarter 2006 to third quarter 2007 |
Second to third quarter 2007 |
| |
(1997=100) |
% change |
| Composite |
159.9 |
9.6 |
1.6 |
| Halifax |
136.3 |
5.9 |
0.8 |
| Montréal |
139.0 |
3.4 |
0.2 |
| Ottawa–Gatineau, Ontario part |
151.4 |
6.5 |
0.5 |
| Toronto |
159.6 |
6.4 |
0.7 |
| Calgary |
183.9 |
17.1 |
2.5 |
| Edmonton |
179.4 |
17.9 |
3.3 |
| Vancouver |
160.7 |
13.3 |
2.7 |
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Note: The non-residential building construction price index provides an indication of the changes in new construction costs in six census metropolitan areas or CMAs (Halifax, Montréal, Toronto, Calgary, Edmonton and Vancouver) and the Ontario part of the Ottawa–Gatineau CMA.
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ONTARIO MULTI-FAMILY HOME STARTS COOL IN OCTOBER
Toronto - Ontario home starts moved lower for the first time in four months in October. The Seasonally Adjusted Annual Rate (SAAR) of urban* starts dropped to 54,200 units, down from 78,100 unit starts registered in September. Residential construction was pulled lower largely by the multi-family home segment which includes semi-detached, town homes and apartment units.
The longer term trend for Ontario housing starts has been one of high starts levels gradually edging lower from peak levels in 2003-04. For example, while actual urban Ontario home starts for the year are ten per cent lower compared to 2006, home starts this year are expected to remain above historical averages.
“The pull back in October home starts can be explained by above trend strength in September which saw multi-family home starts soar” said Ted Tsiakopoulos, CMHC`s Ontario regional economist. “Multi-family home construction is volatile on a month to month basis, largely due to multi-unit apartment projects. The shift in demand from single to more in-expensive multi-family homes, particularly town home and apartment dwellings, suggests this volatility will continue for the remainder of this year and into 2008,” added Tsiakopoulos.
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CMHC REPORTS KITCHENER NEW CONSTRUCTION NUMBERS HIGHER
Canada Mortgage and Housing Corporation (CMHC) released Kitchener’s preliminary housing starts data for the month of October November 8, 2007.
TORONTO - Construction began on 151 homes in the Kitchener Census Metropolitan Area (CMA), an increase of 18 per cent from the 128 units started in the same month last year. Starts hit a 13-year low for October in 2006. Both single-detached and multiple-family home starts recorded increases over October 2006. A total of 97 single-detached foundations were poured in October, up 11 per cent from 87 units started in October 2006. Multiple-family home starts (which include semi-detached homes, townhouses and apartments) were up 32 per cent to 54 units from the 41 units started in October 2006. Housing starts for the first ten months of 2007 were virtually unchanged, up only 0.3 per cent from the same period of 2006, despite a more than 32 per cent drop in single-detached construction. The 49 per cent increase in multiple-family construction kept new home figures on par with last year.
“The high cost of new single-detached homes and little choice, due to a temporary shortage of registered lots, especially in Cambridge, have encouraged homebuyers to look elsewhere,” said Erica McLerie, Market Analyst for the Kitchener CMA. “As a result, existing home sales are at record levels and multiple-family home starts above average,” added McLerie.
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New Housing Price Index for September 2007
Deflation occurred in only one area: Windsor.
The rate of growth in new housing prices decelerated for the 10th consecutive month in September, in line with a trend seen across most of the country.
Contractors' selling prices increased 6.2% between September 2006 and September 2007, a slowdown from the 6.5% gain observed in August.
On a monthly basis, prices increased 0.3% between August and September, resulting in a New Housing Price Index of 155.5 (1997=100).
Saskatoon again had the highest year-over-year increase of all census metropolitan areas. Selling prices there increased 47.0% from September 2006, but this was still slower than the record-high 53.6% gain in August.
Only two Western metropolitan areas showed growth in year-over-year increases. Prices rose 29.6% in Regina in September, compared with 29.2% in August. In Winnipeg, selling prices rose 16.2%, compared with 16.0% in August. In both centres, higher costs for carpenters and electricians drove the increase.
The Edmonton market remained strong with a 26.6% increase. New housing prices rose 5.9% in Calgary in September, the only Prairie city with a year-over-year increase below 10%. This occurred despite higher development costs, as new lots were released into the market.
The pace of growth in Vancouver slowed to 6.1%. In Victoria, new housing prices edged up only 0.2%, as some builders lowered prices to stimulate sales.
Deflation occurred in only one area: Windsor. As demand slowed, contractors in Windsor reduced prices, resulting in a year-over-year decline of 3.2%.
Elsewhere in Ontario, however, year-over-year housing price increases remained mostly steady. Healthy home markets in Toronto (+2.7%) and Hamilton (+3.3%) allowed builders to moderately increase prices.
New housing prices rose 4.6% in Montréal, where decreases due to a competitive market were offset by increased costs.
In the Atlantic Provinces, increased costs for labour and materials pushed prices up in St. John's (+5.7%) and Halifax (+7.3%).
On a monthly basis, the fastest gains occurred in Greater Sudbury and Thunder Bay (+0.9%), Winnipeg (+0.8%) and St. John's (+0.8%). Windsor (-0.4%) and Victoria (-0.3%) both slipped back into negative territory.
| New Housing Price Indexes |
| |
September 2007 |
September 2006 to September 2007 |
August to September 2007 |
| |
(1997=100) |
% change |
| Canada total |
155.5 |
6.2 |
0.3 |
| House only |
165.6 |
5.8 |
0.3 |
| Land only |
135.9 |
7.3 |
0.2 |
| St. John's |
138.9 |
5.7 |
0.8 |
| Halifax |
140.2 |
7.3 |
0.3 |
| Charlottetown |
118.1 |
0.6 |
0.3 |
| Saint John, Fredericton and Moncton |
114.5 |
0.8 |
0.1 |
| Québec |
148.0 |
3.9 |
0.0 |
| Montréal |
155.7 |
4.6 |
0.3 |
| Ottawa–Gatineau |
162.3 |
1.1 |
0.2 |
| Toronto and Oshawa |
142.1 |
2.7 |
0.3 |
| Hamilton |
148.9 |
3.3 |
0.3 |
| St. Catharines–Niagara |
151.7 |
4.2 |
0.0 |
| Kitchener |
139.7 |
1.9 |
0.0 |
| London |
139.3 |
2.8 |
0.7 |
| Windsor |
102.6 |
-3.2 |
-0.4 |
| Greater Sudbury and Thunder Bay |
107.3 |
5.1 |
0.9 |
| Winnipeg |
170.3 |
16.2 |
0.8 |
| Regina |
202.5 |
29.6 |
0.3 |
| Saskatoon |
212.5 |
47.0 |
0.2 |
| Calgary |
250.7 |
5.9 |
0.7 |
| Edmonton |
248.4 |
26.6 |
0.0 |
| Vancouver |
122.4 |
6.1 |
0.0 |
| Victoria |
118.4 |
0.2 |
-0.3 |
| Note: | View the census subdivisions that comprise the metropolitan areas online. |
|
|
How renovations can help pay for themselves
OTTAWA - Whether it's fixing a leaky ceiling, making your home more energy efficient or simply making a change, everyone has a different reason for wanting to renovate. But whatever the reason, renovations can be a great way to enhance your family's quality of life, improve your home and increase its resale value. Once you factor in the money you could save on heat, electricity and water, many renovations can also offer a great return on your investment - up to and including paying for themselves!
To help you decide which renovations are right for your home, Canada
Mortgage and Housing Corporation (CMHC) and the Appraisal Institute of Canada
offer the potential "payback range" that some of the most common home
improvement projects will typically have on the resale value of a home.
The best returns on your renovation investments are projects that target
your kitchen and bathroom. Expect to recover between 75-100 per cent when you
overhaul either of these rooms. Your next best investment is interior/exterior
painting. You will see between 50-100 per cent return on those jobs.
The lowest payback range involves renovation projects where you install a
pool or skylight. Expect to recover about 10-40 per cent of a pool and up to
25 per cent of a skylight and related costs. Other payback ranges include:
- Roof shingle replacement: 50-80 per cent
- Furnace and heating systems: 50-80 per cent
- Basement: 50-75 per cent
- Adding a recreation room: 50-75 per cent
- Installing a fireplace: 50-75 per cent
- Flooring: 50-75 per cent
- Constructing a garage: 50-75 per cent
- Window and door replacement: 50-75 per cent
- Building a deck: 50-75 per cent
- Installing central air conditioning: 25-75 per cent
- Landscaping: 25-50 per cent
- Interlocking paving: 25-50 per cent
- Building a fence: 25-50 per cent
- Asphalt paving: 20-50 per cent
|
Office, Infrastructure Demand Will Sustain Canada's Construction Boom in 2008, says Scotiabank economist
TORONTO - A favourable outlook for non-residential construction should go a long way to offsetting any pending slowdown in residential homebuilding in Canada, maintaining the industry's position as a major driver of domestic growth, according to the latest Real Estate Trends, released Novemebr 7, 2007 by Scotia Economics.
The Canadian economy is in the midst of an unprecedented post-war
construction boom. Adjusted for inflation, spending on construction projects,
including residential housing, non-residential buildings and engineering
structures such as roads and dams, has increased at an average annual rate of
close to six per cent since the mid-1990s, almost twice the advance in the
overall economy. The total value of construction investment will surpass the
$200 billion mark in 2007 for the first time ever.
"The industry's contribution to the nation's overall economic well-being
is disproportionate," said Adrienne Warren, Senior Economist, Scotia
Economics. "Since 2003, the construction sector has accounted for fully
one-quarter of domestic output growth, double its share of the national
economy. More than 250,000 construction jobs have been created over this
period, or almost one in every five new positions."
According to the report, residential homebuilding in Canada is levelling
off. Real residential construction expenditures stalled in the first half of
2007, marking the first time in almost a decade that the industry failed to
contribute to GDP growth. Housing starts will likely drift lower in the year
ahead as reduced affordability and rising mortgage rates dampen home sales and
builder confidence.
For the time being, however, the broad construction sector will remain an
important contributor to growth. Renovation activity should remain buoyant
given record existing home sales this year. A nationwide resurgence in
commercial, resource and infrastructure investment will also help to sustain
the momentum. Investment in non-residential buildings and structures, at $114
billion in 2006, exceeds residential construction and renovation expenditures
by almost 40 per cent.
"The factors underpinning commercial building are still quite
favourable," said Warren. "Office-based employment, including finance and
insurance, information-technology and professional services, has grown rapidly
in recent years. Pent-up demand is strong after over a decade of only modest
increases in new supply, and vacancy rates are tight."
Nonetheless, builders may become more cautious regarding new projects,
given the large number of major developments underway. "By 2009-10 there will
be considerable new office stock, at which point vacancy rates should again be
on the rise," said Warren. "The recent tightening in global credit conditions
in the wake of U.S. subprime lending problems could also dampen expansion
plans."
The outlook for the industrial sector is mixed, with manufacturers
scaling back plant expansions in the face of weak export sales and many major
resource projects nearing completion. Canada's institutional sector is also
lagging the recovery in commercial markets. While benefiting from rising
investments in educational and health care facilities, few new public
administration buildings are being constructed amid government outsourcing and
cost-cutting.
Engineering construction, on the other hand, is expected to remain in
high gear. Governments at all levels are shoring up aging public
infrastructure, including roads, bridges, public transit and power utilities.
Energy and mining related outlays will continue to drive private sector
activity, underpinned by high commodity prices and strong global demand.
"From a regional perspective, relative economic and demographic trends
suggest the hottest markets for both residential and non-residential activity
will continue to be found in the resource-rich regions in the West, East and
North," said Warren. "Many businesses in the manufacturing-dominated economies
of Central Canada may choose to focus on raising efficiencies through
modernization efforts and increased machinery & equipment investments as
opposed to generating additional capacity."
|
The value of building permits slipped slightly in September—although they were still well above $6 billion
Year to year Kitchener CMA down 1.1 %
Gains in the residential sector were more than offset by declines in non-residential intentions.
Municipalities issued building permits worth $6.2 billion in September, down 1.7% from $6.3 billion in August. Intentions peaked at $6.9 billion in May and June. This strength during recent months indicates that construction sites should remain busy in the coming months.
Non-residential permits declined 8.6% to $2.2 billion, the lowest level over the last five months. The non-residential level was almost $1.0 billion below its peak in May 2007. The industrial and institutional components experienced double-digit decreases, while the commercial component remained virtually unchanged.
In contrast, intentions in the residential sector climbed 2.6% to $4.0 billion. This ranked as the second highest monthly value since December 2005, thanks to a fourth gain in five months for the single-family component.
The total value of building permits reached $18.7 billion between July and September, down 4.1% from the second quarter of 2007. This was the second highest quarterly level on record for the total value.
The quarterly growth in residential value of 2.1% was not enough to offset a 13.0% loss in non-residential intentions.
Housing sector: Single-family reaches a record high
Strength in employment, growth in disposable income, tight apartment vacancy rates in certain centres, and attractive financing options continued to stimulate the demand for housing.
However, the deterioration of housing affordability due to the rapid growth in prices for new housing—particularly in Western Canada—and the recent increases in mortgage rates could erode demand.
Municipalities approved single-family permits valued at a record high of $2.7 billion, a 9.4% increase over August. The number of single-family units approved rose 4.4% to 10,454, the highest level since January 2006.
The value of multi-family permits fell 9.0% to $1.3 billion. The number of multi-family units authorized declined 12.7% to 9,041.
Provincially, the value of housing permits increased significantly in Ontario (+27.2% to $1.6 billion). This gain originated from both single and multiple residential units, and was sufficient to compensate for the declines in other provinces.
The largest declines (in dollars) occurred in Quebec (-9.6%) and British Columbia (-9.8%), due to drops in multi-family permits. Residential permits incurred double-digit declines in each of the four Atlantic Provinces because of severe drops in multi-family permits.
In the third quarter of 2007, single-family intentions were up 6.3% from the second quarter to $7.5 billion, more than offsetting a 4.6% decline in multi-family intentions to $4.3 billion.
Third-quarter residential permit values rose in seven provinces. Increases in Quebec and Ontario were only partly offset by drops in Alberta and British Columbia, and generated a 2.1% increase at the Canada level.
Non-residential sector: Western Canada pulls down the numbers
Significant declines in the three westernmost provinces were behind the 8.6% drop in non-residential permits in September.
In the commercial component, municipalities issued $1.3 billion worth of permits in September, down a slight 0.4% from August. Commercial intentions peaked in May and June 2007, reaching $2.1 billion and $1.7 billion respectively.
In September, a gain in office buildings permits was largely offset by decreases in projects in the warehouse and retail trade categories.
In the industrial component, the value of permits plunged 22.5% in September to its lowest level since April 2007. Lower construction intentions for manufacturing buildings were behind the retreat. The decline in industrial permits was spread across the country, as Quebec and Manitoba were the only provinces to show a gain.
The value of institutional permits also hit its lowest level in five months, with a 15.9% drop to $517 million. This was fuelled by a lower value of permits for medical buildings. The decline in institutional permits in September came largely from Ontario and British Columbia.
Provincially, the largest decline (in dollars) occurred in British Columbia, where non-residential construction intentions retreated 38.7% to their lowest level since November 2005. All three components experienced reductions in the province.
In Alberta, non-residential permits were at their lowest level in the last five months in the wake of a 10.1% decrease in September. In Saskatchewan, a 48.0% drop in September followed a strong month of August. In both provinces, the overall decline was fuelled by retreats in the industrial and commercial components.
Quebec, New Brunswick and Nova Scotia also reported declines.
In contrast, gains were recorded in Ontario, Manitoba, and Newfoundland and Labrador. In Ontario, intentions for non-residential buildings surpassed the $1.0 billion mark in September for only the third time since 1989, thanks to projects for office buildings.
Despite the September decline, several factors are still having a positive impact on the non-residential sector. Low office vacancy rates, high corporate profits, increasing demand for health and nursing facilities, and the vigorous retail sector are all factors helping to stimulate the demand for non-residential space.
The total value of commercial permits declined 23.8% in the third quarter to $3.9 billion, following a record level in the previous quarter. The value of institutional permits rose 2.5% to their highest value ($1.7 billion) since the third quarter of 2005. Industrial permits increased 11.4%.
Metropolitan areas: Toronto leads the pack
Since the beginning of 2007, 26 out of the 34 census metropolitan areas posted increases in the total value of building permits between January and September compared with the same period in 2006.
The largest gain (in dollars) came from Toronto, with its very high construction intentions for non-residential buildings, and a strong gain in the single-family component. With still a full quarter to be accounted for, the value of non-residential permits was already above the annual totals for 2005 and 2006 in Toronto.
Toronto was followed by Calgary and Vancouver. In Calgary, the strong gain came in large part from the booming commercial sector, especially the office buildings category. In Vancouver, the strong demand in the housing sector was mainly behind the gain.
| Value of building permits, by census metropolitan area1 |
| |
August 2007r |
September 2007p |
August to September 2007 |
January to September 2006 |
January to September 2007 |
January–September 2006 to January–September 2007 |
| |
Seasonally adjusted |
| |
$ millions |
% change |
$ millions |
% change |
| St. John's |
51.7 |
41.5 |
-19.8 |
240.1 |
280.6 |
16.9 |
| Halifax |
82.6 |
56.5 |
-31.6 |
468.7 |
491.0 |
4.8 |
| Moncton |
33.2 |
22.1 |
-33.3 |
171.8 |
205.5 |
19.6 |
| Saint John |
8.5 |
15.6 |
83.9 |
134.5 |
171.0 |
27.1 |
| Saguenay |
22.3 |
17.3 |
-22.1 |
146.6 |
158.0 |
7.8 |
| Québec |
171.9 |
143.5 |
-16.5 |
874.4 |
1,109.9 |
26.9 |
| Sherbrooke |
21.8 |
18.8 |
-13.5 |
257.3 |
219.7 |
-14.6 |
| Trois-Rivières |
23.7 |
40.0 |
68.8 |
181.5 |
232.7 |
28.2 |
| Montréal |
556.5 |
482.7 |
-13.3 |
4,377.5 |
4,860.4 |
11.0 |
| Ottawa–Gatineau, Ontario/Quebec |
231.3 |
237.3 |
2.6 |
1,631.0 |
1,909.6 |
17.1 |
| Ottawa–Gatineau (Que. part) |
51.6 |
44.6 |
-13.7 |
373.5 |
473.3 |
26.7 |
| Ottawa–Gatineau (Ont. part) |
179.7 |
192.8 |
7.3 |
1,257.5 |
1,436.4 |
14.2 |
| Kingston |
25.7 |
15.5 |
-39.6 |
187.7 |
204.2 |
8.8 |
| Peterborough |
23.5 |
20.4 |
-13.2 |
117.8 |
118.3 |
0.4 |
| Oshawa |
58.7 |
52.0 |
-11.3 |
673.4 |
534.0 |
-20.7 |
| Toronto |
1,022.3 |
1,547.8 |
51.4 |
7,932.9 |
9,803.4 |
23.6 |
| Hamilton |
59.0 |
63.8 |
8.1 |
685.1 |
800.0 |
16.8 |
| St. Catharines–Niagara |
35.9 |
29.2 |
-18.5 |
413.8 |
314.5 |
-24.0 |
| Kitchener |
74.5 |
84.4 |
13.2 |
666.5 |
659.3 |
-1.1 |
| Brantford |
29.5 |
8.7 |
-70.5 |
140.5 |
145.4 |
3.5 |
| Guelph |
38.6 |
16.2 |
-57.9 |
258.4 |
230.7 |
-10.7 |
| London |
77.4 |
78.5 |
1.4 |
681.6 |
695.0 |
2.0 |
| Windsor |
33.3 |
17.9 |
-46.2 |
411.9 |
241.6 |
-41.4 |
| Barrie |
51.2 |
32.5 |
-36.7 |
401.9 |
303.0 |
-24.6 |
| Greater Sudbury |
37.3 |
28.7 |
-22.9 |
162.1 |
295.2 |
82.1 |
| Thunder Bay |
6.6 |
14.3 |
115.7 |
64.7 |
73.2 |
13.0 |
| Winnipeg |
82.8 |
90.3 |
9.0 |
677.8 |
702.6 |
3.7 |
| Regina |
27.2 |
25.7 |
-5.6 |
267.2 |
284.0 |
6.3 |
| Saskatoon |
109.2 |
49.0 |
-55.1 |
333.3 |
506.2 |
51.9 |
| Calgary |
366.2 |
501.8 |
37.0 |
3,999.1 |
4,924.7 |
23.1 |
| Edmonton |
420.1 |
297.6 |
-29.2 |
2,499.8 |
3,043.2 |
21.7 |
| Kelowna |
76.8 |
84.8 |
10.4 |
438.6 |
632.9 |
44.3 |
| Abbotsford |
17.2 |
14.6 |
-14.8 |
282.7 |
214.4 |
-24.1 |
| Vancouver |
535.8 |
368.3 |
-31.3 |
4,584.4 |
5,333.8 |
16.3 |
| Victoria |
60.3 |
79.9 |
32.4 |
567.4 |
770.8 |
35.9 |
| r | revised |
| p | preliminary |
| 1. | Go online to view the census subdivisions that comprise the census metropolitan areas. |
| Note: | Data may not add up to totals as a result of rounding. |
|
| Value of building permits, by province and territory |
| |
August 2007r |
September 2007p |
August to September 2007 |
January to September 2006 |
January to September 2007 |
January–September 2006 to January–September 2007 |
| |
Seasonally adjusted |
| |
$ millions |
% change |
$ millions |
% change |
| Canada |
6,307.9 |
6,203.3 |
-1.7 |
48,060.4 |
55,371.6 |
15.2 |
| Residential |
3,896.7 |
3,998.9 |
2.6 |
30,160.0 |
33,580.2 |
11.3 |
| Non-residential |
2,411.2 |
2,204.4 |
-8.6 |
17,900.4 |
21,791.4 |
21.7 |
| Newfoundland and Labrador |
69.6 |
60.2 |
-13.5 |
359.4 |
442.5 |
23.1 |
| Residential |
59.5 |
34.4 |
-42.2 |
242.1 |
301.5 |
24.5 |
| Non-residential |
10.1 |
25.8 |
155.2 |
117.2 |
141.0 |
20.3 |
| Prince Edward Island |
11.9 |
10.0 |
-15.8 |
155.1 |
112.2 |
-27.7 |
| Residential |
9.2 |
7.2 |
-21.0 |
92.5 |
85.3 |
-7.8 |
| Non-residential |
2.7 |
2.8 |
1.5 |
62.6 |
26.9 |
-57.1 |
| Nova Scotia |
137.9 |
104.0 |
-24.6 |
916.4 |
960.4 |
4.8 |
| Residential |
100.5 |
73.6 |
-26.7 |
605.0 |
633.5 |
4.7 |
| Non-residential |
37.5 |
30.3 |
-19.1 |
311.4 |
326.9 |
5.0 |
| New Brunswick |
95.0 |
72.1 |
-24.1 |
680.0 |
723.2 |
6.3 |
| Residential |
52.5 |
44.6 |
-15.1 |
371.3 |
410.6 |
10.6 |
| Non-residential |
42.4 |
27.5 |
-35.1 |
308.7 |
312.5 |
1.2 |
| Quebec |
1,152.7 |
1,055.0 |
-8.5 |
8,562.6 |
9,638.0 |
12.6 |
| Residential |
776.8 |
702.2 |
-9.6 |
5,629.9 |
6,168.5 |
9.6 |
| Non-residential |
375.8 |
352.8 |
-6.1 |
2,932.7 |
3,469.5 |
18.3 |
| Ontario |
2,210.1 |
2,581.0 |
16.8 |
17,145.0 |
19,684.8 |
14.8 |
| Residential |
1,239.2 |
1,576.0 |
27.2 |
10,667.5 |
11,139.1 |
4.4 |
| Non-residential |
970.9 |
1,005.0 |
3.5 |
6,477.5 |
8,545.7 |
31.9 |
| Manitoba |
119.0 |
130.1 |
9.3 |
1,029.5 |
1,145.7 |
11.3 |
| Residential |
93.0 |
83.0 |
-10.8 |
610.7 |
724.1 |
18.6 |
| Non-residential |
26.0 |
47.1 |
81.2 |
418.8 |
421.7 |
0.7 |
| Saskatchewan |
184.4 |
133.5 |
-27.6 |
865.8 |
1,163.0 |
34.3 |
| Residential |
75.7 |
77.0 |
1.7 |
335.2 |
615.5 |
83.6 |
| Non-residential |
108.7 |
56.5 |
-48.0 |
530.5 |
547.5 |
3.2 |
| Alberta |
1,301.3 |
1,224.6 |
-5.9 |
9,951.3 |
11,889.3 |
19.5 |
| Residential |
801.6 |
775.2 |
-3.3 |
6,050.6 |
7,014.3 |
15.9 |
| Non-residential |
499.7 |
449.4 |
-10.1 |
3,900.6 |
4,875.0 |
25.0 |
| British Columbia |
1,011.7 |
816.9 |
-19.2 |
8,236.4 |
9,430.8 |
14.5 |
| Residential |
681.5 |
614.7 |
-9.8 |
5,490.8 |
6,391.4 |
16.4 |
| Non-residential |
330.2 |
202.3 |
-38.7 |
2,745.5 |
3,039.4 |
10.7 |
| Yukon |
5.9 |
8.4 |
42.6 |
84.7 |
63.9 |
-24.6 |
| Residential |
3.1 |
5.0 |
59.2 |
30.1 |
30.2 |
0.3 |
| Non-residential |
2.8 |
3.4 |
23.7 |
54.6 |
33.7 |
-38.4 |
| Northwest Territories |
4.3 |
4.7 |
9.4 |
32.2 |
59.1 |
83.8 |
| Residential |
1.2 |
3.2 |
157.5 |
15.0 |
16.5 |
10.2 |
| Non-residential |
3.0 |
1.5 |
-51.4 |
17.2 |
42.6 |
147.9 |
| Nunavut |
4.2 |
2.8 |
-33.4 |
42.1 |
58.6 |
39.0 |
| Residential |
2.9 |
2.8 |
-3.3 |
19.2 |
49.7 |
158.9 |
| Non-residential |
1.3 |
0.0 |
-99.8 |
23.0 |
8.9 |
-61.1 |
| r | revised |
| p | preliminary |
| Note: | Data may not add up to totals as a result of rounding. |
|
Note to readers
Unless otherwise stated, this release presents seasonally adjusted data, which ease comparisons by removing the effects of seasonal variations.
The Building Permits Survey covers 2,380 municipalities representing 95% of the population. It provides an early indication of building activity. The communities representing the other 5% of the population are very small, and their levels of building activity have little impact on the total.
The value of planned construction activities shown in this release excludes engineering projects (e.g., waterworks, sewers or culverts) and land.
For the purpose of the Building Permits release, the census metropolitan area of Ottawa–Gatineau is divided into two areas: Ottawa–Gatineau (Quebec part) and Ottawa–Gatineau (Ontario part).
|
K-W HOME SALES POISED TO SET NEW RECORD
KITCHENER — A new record for residential sales is going to be set, as sales to the end of October topped the 6,000 mark.
“Record sales will be the hallmark of 2007,” according to Tania Benninger, President of the
Kitchener-Waterloo Real Estate Board. “However, the local real estate market is also notable
for continued affordability despite upward pressure on prices.”
There were 521 residential sales last month, pushing the total for the year to 6,001 sales and
within striking distance of the current annual sales record of 6,123 homes sold in 2005. Last
year, there were a total of 6,012 homes sold.
Homes selling in the $250,000 to $275,000 range saw the most activity last month, with sales
increasing almost 75 percent relative to October 2006.
Sales of single family detached homes experienced healthy year-over-year growth of more than 15 percent, to 370 sales. Meanwhile, sales of semi-detached properties increased almost 30 percent relative to one year ago, accounting for 49 sales during the month. Total dollar volume of residential properties sold last month was $132 million, an increase of more than 16 percent relative to the $113.8 million recorded in October 2006.
As a result, the average price of all homes sold last month increased five percent to $254,247. The average sale price of single family detached homes sold last month inched up three percent to $281,551 relative to one year ago. However, other forms of residential real estate jumped 7.8 percent on a year-over-year basis to $187,343. Sales of freehold townhouses contributed the most significant increase, with an average price jump of almost 11 percent to $210,009.
The median sale price of all residential properties increased 7.7 percent to $235,000. The
median price of single family detached homes now stands at $255,000, a 5.1 percent increase
over October 2006.Strong sales activity through 2007 is starting to put pressure on the supply of homes for sale.
New listings processed to date mirror 2006 results. However, active listings in October were
down almost 20 percent relative to one year ago.
“Sales momentum has been seemingly unstoppable throughout 2007 as market conditions
provide prospective buyers with excellent home ownership opportunities,” says Benninger.
“The tighter supply of homes for sale is likely to put continued upward pressure on prices and
favour sellers through the balance of the year.”
Despite the sales activity this year, Benninger believes the local residential real estate market
will remain balanced and continue to offer options for all types of buyers.
October 2007 sales Statistics |
Single-detached starts boom in the West, drop elsewhere
While housing starts in 2006 were at their second highest
in 20 years at over 227,000, the contrast has been striking
in terms of single-detached starts between the West and the
rest of Canada.
The 2007 Canadian Housing Observer published by Canada
Mortgage and Housing Corporation (CMHC) reports that double
digit increases in single-detatched housing starts occurred
in British Columbia and Saskatchewan in 2006, and they soared
to close to 20 per cent in Alberta. However, the situation
is different east of the Saskatchewan border. In Central
and Eastern Canada, single-detached starts dropped, continuing
the decline that began in 2005.
For multiple-family housing starts, growth was widespread
across the country reaching a 31 year high in 2006.
The Canadian Housing Observer, CMHC?s annual flagship
publication, is a comprehensive source of information and
analysis on the state of Canadian housing. It is available
free of charge from www.cmhc.ca.
Other findings in the 2007 Canadian Housing Observer?s include:
New house prices climb over 43 per cent in one year in
Calgary
There was considerable variation across the country in 2006
in regards to new house prices. While the New Housing Price
Index (based on homes of constant quality) rose at 9.75 per
cent in total, the increases ranged from 43.6 per cent in
Calgary down to a small decline of 0.1 per cent in Windsor.
High demand for new housing, higher building material and
labour costs, as well as increasing land values all contributed
to the increase in house prices. The average new single-detached
house price rose by 11.9 per cent, more than two per cent above
the increase in the New Housing Price Index . This difference is
due to an increase in the quality of new homes being built,
including more expensive locations, larger homes and homes with
more features.
Existing home sales remained at record level in 2006
Resale house prices continued their upward climb in 2006. The
average price increased 11.1 per cent from 2005 and reached
$277,000. The largest increase was in Alberta (31 per cent).
Existing home sales for the year were almost unchanged at
483,770 transactions from their record high of 483,800 in 2005.
The seller?s market continues
The Canadian Housing Observer examined the sales-to-new-listings
ratio for new homes over the last twenty years to classify
markets as seller?s, buyer?s, or balanced markets. The ratio,
while dipping slightly in 2006, remained at around 60 per cent,
well into seller?s market territory.
Urban centre vacancy rates vary widely
Windsor had the highest rental vacancy rate (10.4 per cent)
of all of Canada?s 28 major centres in 2006. Calgary and
Victoria had the lowest ? at half of one per cent. There was
virtually no change in the average across all centres which
was down only one-tenth of one per cent to 2.6 per cent.
According to CMHC?s new survey of vacancy rates in apartment
condominiums offered for rent, these were lower than in the
conventional rental market in all but one (Montreal) of the
seven centres surveyed.
Rent increases are generally moderate ? except in Alberta
When Edmonton and Calgary are taken out of the picture, the
average rent increase for two-bedroom apartments across urban
centres in 2006 was just 2.4 per cent. In contrast, Calgary
rents for two-bedroom apartments increased by close to 20 per
cent in existing structures, and those in Edmonton were up by
9.9 per cent. However, Calgary?s average rent of $960, for a
two-bedroom apartment is still below that of Toronto?s ($1,067),
and Vancouver?s ($1,045).
Big increases in renovation spending
Sales of existing homes are a leading indicator of renovation
spending, since buyers typically carry out renovations in the
first three years. The high level of sales of existing homes
provided a solid foundation for renovation activity in 2006,
which rose by nine per cent. The Canadian Housing Observer
points out that another contributor to the high spending was
low interest rates, given that mortgage refinancing is a
popular way of paying for renovations (40 per cent of the
proceeds from refinancing are used for renovation-related
activity).
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DEMAND FOR MULTI-FAMILY HOMES WILL DRIVE ONTARIO MARKET
Toronto - Demand for multi-family homes, which includes town homes and apartments, will drive housing activity across the province according to the 2007 Fourth Quarter CMHC Housing Market Outlook - Canada Edition released October 30, 2007.
Highlights of the Ontario Quarterly forecast include:
.. Ontario economic growth will lag behind the Canadian average this year, but
will remain stable despite challenges posed by a high Canadian dollar.
.. A narrowing economic growth gap between the west and central Canada
suggests the net outflow of Ontarians headed west will subside.
.. Ontario resale volumes will reach new heights registering 214,350 and
206,250 units this year and next respectively.
.. Ontario existing home prices will grow faster than inflation in the short run,
rising by 6.2 per cent this year and 3.3 per cent in 2008.
.. Hamilton, Brantford, Sudbury and London will be home to the hottest resale
markets, registering price gains above the provincial average.
.. Ontario home starts will remain above historical averages registering 67,700
units this year and 68,175 units in 2008.
.. Demand for multi-family homes, particularly apartments, will drive activity in
both resale and new construction markets.
“Higher mortgage carrying costs and slower job growth in higher paying
employment sectors in 2008 will shift demand towards the less expensive multifamily
home sector,” said Ted Tsiakopoulos, CMHC’s Ontario regional
economist. “A tight resale apartment market combined with a backlog of
apartment sales that have yet to commence construction, will further support
activity in the multi-family home sector,” added Tsiakopoulos.
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Mortgage Loan Insurance - Renovation Financing - Financing Renovations with the help of CMHC Mortgage Loan Insurance
According to CMHC's 2007 Renovation and Home Purchase Report, last year
more than $17.3 billion was spent on home renovations. In 2007, 46 per cent of
homeowners surveyed plan on renovating their home and each household expects
to spend an average of $11,270.
While most renovations are paid through cash, credit card, and lines of
credit, larger scale renovation projects may be facilitated through mortgage
financing.
Mortgage loan insurance, available to CMHC Approved Lenders, is mostly
known for providing home buyers with the ability to purchase a home with
little of no down at competitive interest rates, comparable to those offered
when making a larger down payment.
What is not well known is that mortgage loan insurance can also help home
owners access more of the equity from their existing property to finance home
renovations.
Purchasing a home and making immediate improvements?
It's not uncommon to have home buyers plan major home improvements for
the home they're just about to purchase. CMHC mortgage loan insurance can help
them obtain the funds they need for both the purchase and renovations.
Qualifying home buyers can even borrow up to 100 per cent of the home's
"as-improved value" (value after the renovations).
Planning to make large scale renovations?
CMHC can help home owners refinance their existing home for up to 95 per
cent of its "as-improved" value. Using the "as-improved" value of the home
helps home owners access more renovation funds. This type of financing is
ideal if the borrower wants to spread the cost of the renovations over a
longer period.
Looking for flexibility to draw and repay funds?
Other home owners prefer the convenience of drawing funds whenever they
need to. With CMHC insured financing, they may be eligible to obtain a secured
homeowner line of credit for up to 90 per cent of the value of the home.
Secured lines of credit are ideal for on-going or long-term renovations. As
the homeowner pays off the owed balance, they have the ability to re-borrow
the unused funds without reapplying. Borrowers who qualify may even choose the
option of making interest only payments for the first five or 10 years.*
Making energy-efficient renovations?
More than 17 per cent of the energy consumed in Canada is used to run our
homes. That's why making energy-saving renovations can offer big savings. For
eligible CMHC insured loans, the borrower can obtain a 10 per cent premium
refund and an extended amortization period of up to 40 years without
surcharge.
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Housing starts to dip in 2008 following a rise in 2007
OTTAWA - Housing starts will reach 227,530 units in 2007, an increase of 0.1 per cent from the 227,395 units in 2006, according to Canada Mortgage and Housing Corporation's (CMHC) fourth quarter Housing Market Outlook, Canada Edition report. However, in 2008, residential construction will decline to about 214,000 units. Despite this drop, 2008 will mark the seventh consecutive year in which housing starts exceed 200,000 units.
"Continuing high employment levels, income gains and low mortgage rates
have been a boon to Canada's housing markets. Despite this, however, housing
starts are expected to decrease in 2008," said Bob Dugan, Chief Economist at
CMHC. "The pull back in housing starts next year will be mainly due to the
increases in house prices in recent years, which have pushed mortgage carrying
costs higher."
Existing home sales, as measured by the Multiple Listing Service
(MLS(R))(1), are poised to experience their best year on record with just over
521,000 units in 2007, a 7.8 per-cent increase over 2006. The high level of
MLS(R) sales will be led by activity in the Prairies. With respect to 2008,
the level of MLS(R) sales will fall by 3.9 per cent, but will still be
slightly over 500,000 units, the second highest on record. Growth in the
average MLS(R) price will remain high at 10.1 per cent in 2007, mainly because
of continued strong price pressures in Canada's western provinces. As most
resale markets move toward more balanced conditions, growth in average MLS(R)
price is forecast to slow to 4.2 per cent in 2008.
At the provincial level, British Columbia's housing starts will remain
above historical averages but are expected to decline slightly moving into
2008. A tight labour market, income growth, and high levels of consumer
confidence will help to offset the dampening effect of rising mortgage
carrying costs on the demand for new and existing homes in British Columbia.
Housing starts should decline slightly from 36,443 units in 2006 to
36,200 units in 2007 and 33,250 units in 2008. The average MLS(R) price in
British Columbia will grow by 12.1 per cent in 2007 and by 6.0 per cent in
2008 as increased listings and fewer resales bring more balanced supply and
demand conditions for existing homes.
Alberta continues to experience low unemployment, an abundance of job
opportunities, and continuing overall prosperity. Despite these positives,
Alberta is expected to face a drop in net migrants between now and the end of
2008 due to the growing difference in provincial house prices and improved
economic conditions in other provinces. With lower migration and higher
mortgage carrying costs, housing starts will ease from 48,962 units in 2006 to
47,750 units in 2007 and 42,250 units in 2008. Following an unprecedented
30.7 per-cent gain in 2006, the average MLS(R) price is expected to climb
another 24.4 per cent in 2007 and 6.8 per cent in 2008.
Saskatchewan has been experiencing steady economic growth, a healthy
employment situation and gains in net migration, all of which has contributed
to strong housing demand. Total housing starts are forecast to reach about
6,000 units in 2007, the highest level in 24 years. However, escalating costs
will push housing starts down to 5,500 units in 2008. The average MLS(R) price
in Saskatchewan will rise by 28.7 per cent in 2007 while 2008 will see growth
in prices of approximately 13.5 per cent.
Manitoba is one of five provinces whose economic growth is expected to
exceed the national average. This success has contributed to a five-year high
in job creation, thus increasing net migration to levels not seen since 1982.
These factors will contribute to the high levels of new home construction
expected between now and the end of 2008. Total housing starts will reach
5,750 units in 2007, the best performance in 20 years. Starts will edge lower
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