Higher Housing Demand in the Kitchener and Guelph CMAs
TORONTO - The Canada Mortgage and Housing Corporation (CMHC) released its Spring Housing Market Outlook report for the Kitchener and Guelph Census Metropolitan Areas (CMAS) yesterday. Demand for both new and resale homes will increase in 2010. Resale home price growth will resume in 2010.
Highlights of this report include:
-- The resale home market in the Kitchener-Guelph area will be very strong
this year. Sales will continue at a strong pace through the first half
of 2010 before moderating later this year and into 2011. Sales through
the Kitchener-Waterloo Real Estate Board will increase by nine per cent
to 7,150. Sales through the Guelph and District Real Estate Board will
reach 3,000 in 2010, up four per cent from last year.
-- Listings will respond to increasing home prices resulting in more
balanced markets by 2011. A tight resale market in the first half of the
year will support stronger price growth in 2010. Resale home prices in
the Kitchener and Guelph CMAs are expected to average $284,900 and=0D
$290,000 in 2010 respectively.
-- Spill-over from the resale home market, low mortgage rates, low
inventories and an improving economy will combine to propel housing
starts higher in 2010. Home starts in the Kitchener CMA will reach 2,750
in 2010, up 20 per cent from last year, while Guelph CMA starts will
increase to 850.
-- Single-detached starts in both CMAs will increase. Single-detached
starts account for a 47 per cent share of total housing starts and are
an important indicator of the strength of the housing market.
Construction will also increase for semi-detached homes, townhouses and
"Low interest rates, population growth and a slightly better job market outlook will support housing demand through 2010," said Erica McLerie, CMHC Senior Market Analyst for the Kitchener CMA. "Homebuyers have brought their home purchases forward into the early part of 2010 in anticipation of higher mortgage rates later in the year and into 2011."
"Trends in the Kitchener and Guelph CMA housing markets generally mirror expectations for the rest of the province. Higher mortgage carrying costs, increasing supply pressures and declining first time buyer demand will temper Ontario housing activity later this year and into 2011," said Ted Tsiakopoulos, CMHC's Ontario regional economist. "This transition in housing activity should be orderly thanks to improving job markets, historically low interest rates and further gains in household incomes," added Tsiakopoulos.
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.