Canadian Funding Corp Reviews CMHC Design Reports For the Community» Association

Don’t believe the housing hype

admin — Fri, 26 Jun 2009 20:03:34 +0000

Judging by the latest real estate data, the Canadian housing market could scarcely be better. Average home prices are up more than 16 per cent this year, and in May they hit an all-time monthly high, according to the Canadian Real Estate Association. By those numbers, Canada didn’t just sidestep the housing market crash that continues to plague the United States, it sailed right through it virtually unscathed. And yet, there are plenty of signs that the Canadian housing market is still sitting on some very shaky ground—and even the potential that Canada’s big housing crash is yet to come.

There is one particular statistic that suggests trouble could be brewing. Unlike in the U.S., Britain and most European countries, household debt in Canada is, incredibly, still growing. That rising debt is being driven largely by record-low interest rates. Canadians have been buying homes not so much because they can afford them, but because many believe there’s never been a better time to buy, with lending rates so low. “There is no doubt that record-low mortgage rates have juiced Canada’s housing market,” wrote BMO economist Sal Guatieri, in a recent newsletter. Houses are barely more affordable now than they were during the market peak. And as people keep buying, houses may only become less and less affordable.

Not everyone agrees with the CRE figures that suggest the market has managed such a quick and painless turnaround, either. According to the Teranet-National Bank housing price index, Canada’s housing market is not recovering yet. Home prices have been falling for the past eight months, according to its latest statistics. Vancouver, Calgary and Toronto have each experienced significant price drops compared to last year. This would seem more in line with what one would expect after an unprecedented six-year housing boom in which home prices shot up 80 per cent.

It is, of course, possible that the correction will, ultimately, be modest. Guatieri expects that interest rates will remain low and income growth will remain subdued this year, before picking up next year. That will keep housing prices down, but would likely mean the worst of the correction is behind us.

But if mortgage rates go up sharply then “affordability will get crunched again,” says Guatieri, in an interview. Things could get much, much worse. And that’s not an unthinkable scenario. Some banks have already boosted interest rates twice this year. Then there is the possibility that job losses continue and the economy doesn’t recover quickly, putting further strains on household finances. The low interest rates and continued debt problems mean that Canadians could find them themselves badly over-exposed.

Guatieri isn’t forecasting a housing market crash. But, as he wrote last week, “it’s worth remembering that the further house prices go up and the longer household finances get stretched, the greater the risk of a painful correction. Anyone who doubts that should talk to an American or British homeowner.”

http://www2.macleans.ca/2009/06/26/dont-believe-the-housing-hype/

brought by Moishe Alexander, CFC CEO

Vancouver real estate prices will drop less than expected

admin — Tue, 16 Jun 2009 14:35:59 +0000

Reviewed and recommended by Moishe Alexander, CFC CEO

A recent surge in real estate sales has caused the Canadian Real Estate Association to sharply revise its expectations for price drops in British Columbia.
CREA, in its forecast released on Thursday, estimated that B.C.’s average house price will drop less than seven per cent over 2009, more than 3 percentage points less than the 10.6 per cent drop forecast in February.
CREA’s forecast that B.C.’s average price will drop to $423,300, instead of the $406,300 average it forecast earlier.
Going forward to 2010, CREA is now predicting that B.C. prices will start edging up again by almost two per cent compared with a 2010 drop of 0.6 per cent forecasted in February.
B.C. sales rose in April from the previous month, the B.C. Real Estate Association said Thursday in a news release, as buyers were drawn back into the market by lower prices and rock-bottom mortgage rates. And the inventory of unsold homes across the province dropped to the lowest level in 12 months, the association said, edging the ratio of sales to active listings close to the zone housing economists consider balanced between buyers and sellers.
“An increase in consumer demand combined with fewer homes for sale has trended the market near balanced conditions,” Cameron Muir, chief economist for the B.C. Real Estate Association said in an interview.
April was the third straight month that sales were higher than the previous month.

Peter Raab

http://www.peterraab.ca/vancouver-real-estate-market-updates/2009/05/vancouver-real-estate-prices-will-drop.html

CFC Reviews CMHC Design Report: IDP — Benefits of Integrated Design – Your Association Supports IDP

admin — Sun, 05 Apr 2009 21:43:34 +0000

In a 2003 study carried out for several architectural associations, including RAIC and OAA, one of the key findings on sustainable design in Canada was:
Integrated Design Process (IDP) is essential for effective management of the sustainable design process to ensure that efficient coordination is maintained and that overall project and design costs are minimized. Several sustainable design evaluation and assessment systems require the use of IDP due to the benefits derived from working in a collaborative setting at the outset of the project.
In the 2005–2006 season (the fifth), Sustainable Design for Canadian Buildings, SDCB 205, RAIC’s cross-country, continuing education course, was entitled “Green to Green: Opportunities for more Energy-Efficient Building Retrofits.” It focused on integrated design. Similar or related courses on sustainable design will likely continue to be offered. Reviewed by Moishe Alexander.