This information was forwarded on to me from Charlie Parker from RE/MAX in Nanaimo.

These are some very encouraging thoughts for the market!

Outlook Sees B.C. House Sales, Prices Increasing

The median price of a B.C. detached house on MLS will rise to $391,000 by next year – up from $369,000 this year – while the median strata price will jump to $345,000, up from $325,000, according to a very bullish B.C. housing market forecast released this week by Central 1 Credit Union. The report sees total housing sales rocketing to a record high of 140,000 units in 2010 – up from just 98,226 in 2008 and 108,200 in 2009 – before falling back to 138,000 sales in 2011. Why the optimism? According to Central 1 chief economist Helmut Pastrick, the record housing sales will be due to “favourable mortgage rates, a growing economy, and easier credit for builders and developers”. Pastrick forecasts that mortgage rates will start to turn up “with conviction” in mid-2010. He thinks the 5-year closed rate for mortgages at major banks will be at 7% by 2011 (it is now around 5.8%). As for the rental vacancy rate, Pastrick sees the province-wide rate rising to 2.1% next year (from 1.6% today) before dropping to 1.7% in 2011.

Major Point: Keep in mind that CMHC vacancy rates are based on rental purpose built buildings of 3 or more units. This means that stats for the thousands of condos sold to investors and now flooding the market are NOT in the vacancy rates. We think the rate is more in the 3% – 4% rate already. Also, the stated mortgage of 5.8% can still be beaten down to 3.9% or so!!! Also, the long term (5 years or so) rates are dependent on the bond market and not the BOC. However, this report from a very credible source will be more fuel for the confidence level among B.C. home buyers. The market is turning to a sellers market, but with low mortgage rates in effect for at least another six to eight months, there is still plenty of time to find that great deal.

I found this article on the CBC website. It was an article written Oct 16, 2009.

It is about the  interest rate, now 0.25 per cent, and Bank of Canada being committed to keep the rate there until the spring of 2010.

http://www.cbc.ca/consumer/story/2009/10/16/conference-board-economy.html

This is another article I found very interesting. Thanks to Katy Folland of  Lending/Max for passing it on.

Core inflation rate slips to 1.5%
Friday, October 16, 2009
 
Canada’s annual inflation rate stayed anchored well below zero for the fourth consecutive month in September, but that beneficial aspect of the economic downturn is about to end.

The consumer price index slid by one-tenth of a point last month to minus-0.9% — matching a 53-year low that was also recorded in July, Statistics Canada reported Friday.

On a month-to-month basis, there was no change in the seasonally unadjusted consumer price index.

As has been the case for the better part of a year, it was the disparity in gasoline prices between last year and this year that was the main contributor to the negative inflation rate.

The cost of filling up at the pump was 23% less in September than 12 months earlier.

But the gap is certain to close in the next inflation report, because it was at about this time last year that gasoline prices began falling in response to recessionary forces and the collapse in global oil demand.

No other component of the consumer price index has been as critical in suppressing inflationary pressures as energy, the agency noted.

Aside from energy, the annual inflation in Canada was well above zero in September at 1.3%.

The low inflation rate was also influenced by the falling cost of autos, shelter and transportation. Canadians paid 5.9% less for purchasing autos last month than a year ago, while shelter costs were 1.8% lower and transportation costs fell 7.2%.

But of the eight major components Statistics Canada uses to gauge inflation, five were in positive territory, including food, household operations, health and personal care, recreation and education, and alcohol and tobacco.

Food prices continued to be the main driver of inflation with a 2.8% annual gain last month, although that is less than the four% increase registered in August. The biggest increases came in the price for fish, which rose 8.8%, and for sugar and confectionery, up 8.7-per-cent.

The report is unlikely to cause any worries to the Bank of Canada that inflation will be a problem in the near future.

The core inflation index, which excludes volatile items such as gasoline, slipped to 1.5% in September, below the central bank’s target of 2.0%.

This artlcle was brought to my attention from Pauline Mountain from TD Canada Trust. Enjoy!

BC Housing Market Gains Momentum

Vancouver, BC – October 15, 2009. The British Columbia Real Estate Association (BCREA) reports that Multiple Listing Service® (MLS®) residential sales in the province climbed 68 per cent to 8,576 units in September compared to the same month last year. The average MLS® residential sales price in the province climbed 15 per cent to $474,169 from $412,149 in September 2008. 

“Upward momentum in consumer demand continued unabated in September,” said Cameron Muir, BCREA Chief Economist. “Low mortgage interest rates and renewed confidence in real estate assets has propelled BC home sales to a level not seen in two years.” September posted the highest number of BC MLS® residential sales for that month since September 2005, and the third highest ever recorded for the month of September.

“While Victoria and the Lower mainland are exhibiting strong sellers’ market conditions with rising prices, housing markets in the rest of the province are experiencing a more gradual recovery,” added Muir.

Year-to-date, MLS® residential sales dollar volume increased 6 per cent to $29 billion over the same period last year. A total of 63,521 units were sold in the first nine months of 2009, up 6 per cent from 2008, while the average MLS® price declined 1 per cent to $457,389.

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For more information, please contact: 

BCREA represents 12 member real estate boards and their approximately 17,500 REALTORS® on all provincial issues, providing an extensive communications network, standard forms, economic research and analysis, government relations, applied practice courses and continuing professional education (cpe).

To demonstrate the profession’s commitment to improving Quality of Life in BC communities, BCREA supports growth that encourages economic vitality, provides housing opportunities, respects the environment and builds communities with good schools and safe neighbourhoods.

For detailed statistical information, contact your local real estate board. MLS® is a cooperative marketing system used only by Canada’s real estate boards to ensure maximum exposure of properties listed for sale.

Great article. Thanks to Katy Folland from LendingMax for passing this on. Enjoy!

Housing Activity to Rebound in Second Half of 2009 and in 2010

OTTAWA, September 3, 2009 - Housing starts are expected to rebound in the second half of 2009 and will reach 141,900 for the year. Starts will increase to 150,300 for 2010, according to Canada Mortgage and Housing Corporation’s (CMHC) third quarter Housing Market Outlook, Canada Edition* report. The overall forecast totals for housing starts remain unchanged from the second quarter release.

“Economic uncertainty and lower levels of employment tempered new housing construction in the first half of this year”, said Bob Dugan, Chief Economist for CMHC. “In the second half of 2009 and in 2010, we expect housing markets across Canada to strengthen.”

Improving activity on the resale market and lower inventory levels in both the new and existing home markets are expected to prompt builders to increase residential construction.

Existing home sales, as measured by the Multiple Listing Service (MLS®)¹, have rebounded strongly since January and will reach 420,700 units in 2009 and remain close to that level at 419,400 units in 2010. The average MLS® price is expected to moderate to $301,400 in 2009 and to increase to $306,300 in 2010.

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.

* The forecasts included in the Housing Market Outlook are based on information available as of July 23, 2009. Where applicable, forecast ranges are also presented in order to reflect economic uncertainty.

¹ The term MLS® stands for Multiple Listing Service and is a registered trademark of the Canadian Real Estate Association (CREA). Data are for 10 provinces.

Information on this release:

Charles Sauriol
CMHC Media Relations
613-748-2799
csauriol@cmhc-schl.gc.ca

National Housing Outlook

Key Housing Market Indicators

Provincial Housing Outlook

Total Housing Starts

Source: CMHC Housing Market Outlook, Canada Edition, Third Quarter 2009. Totals may not add due to rounding.