Press release from CNW Group
In the Canadian Housing Market, Stable is the Word
Tuesday, June 25, 2013
In the Canadian Housing Market, Stable is the Word08:00 EDT Tuesday, June 25, 2013
Genworth Canada Releases Spring 2013 Metropolitan Housing Outlook
TORONTO, June 25, 2013 /CNW/ - After three years of varied periods of growth and decline across the country, the Canadian housing market is starting to stabilize, according to the latest housing report released by Genworth Canada. While the economy continues to strengthen, modest growth in the housing market is the trend for the next five years.
"The Canadian housing market is transitioning to a balanced level of supply and demand," said Brian Hurley, Chairman and CEO of Genworth Canada. "While lower demand has cooled the housing market, this latest research shows moderate growth over the next few years which points towards a more stable market for both buyers and sellers."
The current condition is due in part to the tightening of regulations, but also continued warnings to consumers on their debt levels. Consumers appear to be heeding the advice and stabilizing their financial position before the Bank of Canada begins to raise its rate. The Spring 2013 Metropolitan Housing Outlook notes that healthy employment gains since the end of the recession have helped move mortgage payments in arrears and bankruptcies to a downward trend, except in British Columbia where payments in arrears have flattened after an upward trend from 2008 to 2010. Despite the low interest rates, price growth for both new and existing homes has been decelerating. The report also notes that while total mortgage approvals are falling, this decline is entirely fuelled by resale homes, as mortgage approvals for new homes increased by 3.4 per cent.
Canadian New and Resale Homes Average Price
- Atlantic Canada has seen large growth in housing starts, but with population growth low, the strengthening economy will not be able to keep housing starts from declining, as they align with demographic needs
- Quebec consumers will enjoy good employment and income growth, but government cutbacks and nervous consumers will put a lid on housing demand, bringing about a contraction in housing starts this year and in 2014
- Ontario may be on its way to experience in 2013 its first decline in housing starts in four years, but as the economy continues to grow and unemployment declines, new home construction is expected to rise again in 2014
- The Prairies are experiencing the strongest growth in home pricing, propelled by strong economic growth, rising employment and sustained residential demand
- Alberta saw the greatest population growth among the six regions, as well as housing starts surging to a post-recession high in 2012; housing starts are expected to continue to grow through 2013 and 2014
- British Columbia, after a period of huge growth and then huge correction, is finally settling into more balanced market conditions
Prices for existing homes are expected to rise this year in eight of the nine cities studied and in all nine cities by 2014. Vancouver will remain the most expensive city, with the average resale house price forecasted to reach $766,468 by 2015, an increase of more than 5.5 per cent from 2013. Calgary will see the greatest relative increase in housing prices over the next three years, with Edmonton and Winnipeg close behind. The rest of the metropolitan areas will experience more moderate growth closer to the national average.
Average Resale Housing Price by City: Forecast
Italics indicate percentage change from previous year.
Sources: The Conference Board of Canada; Canadian Real Estate Association;
Québec Federation of Real Estate Boards.
The Metropolitan Housing Outlook, which is produced twice a year, is commissioned by Genworth Canada from the Conference Board of Canada. The report reviews a wide range of housing statistics and offers in-depth analysis of the trends in the housing market for Canada, the Provinces and nine metropolitan areas: Québec City, Montréal, Ottawa, Toronto, Winnipeg, Calgary, Edmonton, Vancouver and Victoria. A copy of the report is available at http://genworth.ca/en/about-us/housing-reports.aspx.
About Genworth Canada
Genworth MI Canada Inc. (TSX: MIC) through its subsidiary, Genworth Financial Mortgage Insurance Company Canada (Genworth Canada), is the largest private residential mortgage insurer in Canada. The Company provides mortgage default insurance to Canadian residential mortgage lenders, making homeownership more accessible to first-time homebuyers. Genworth Canada differentiates itself through superior customer service, innovative processing technology and a robust risk management framework. For almost two decades, Genworth Canada has supported the housing market by providing thought leadership and a focus on the safety and soundness of the mortgage finance system. As at March 31, 2013, Genworth Canada, had $5.7 billion total assets and $3.0 billion shareholders' equity. Find out more at www.genworth.ca.
Image with caption: "Forecast - Average Resale Housing Price (CNW Group/Genworth MI Canada) (CNW Group/Genworth Canada)". Image available at: http://photos.newswire.ca/images/download/20130625_C2899_PHOTO_EN_28426.jpg
PDF available at: http://stream1.newswire.ca/media/2013/06/25/20130625_C2899_DOC_EN_28436.pdf
SOURCE: Genworth Canada
For further information:
For additional information or to arrange interviews, please contact:
905.287.5520 or Lisa.Azzuolo@genworth.com