Homeownership Rates, Tax Expenditures, RRSP Home Buyers’ Plan, Affordability and Market Trends in Major Centres
Prepared for: Canadian Home Builders’ Association
By: Greg Lampert
April 2003
Table of Contents
Introduction ............................................................................................................................ 1
Ontario Home Ownership Savings Plan...............................................................................1 Toronto Board of Trade Comment on US Mortgage Interest and Property Tax Deductibility..............................................................................................2
Homeownership Rates ........................................................................................................ 3 Tax Expenditures .................................................................................................................. 5
GST Tax Expenditures..........................................................................................................5 Non-Taxation of Capital Gains on Principal Residences .....................................................6
Participation in RRSP Home Buyers’ Plan ..................................................................... 7 Housing Market Trends in Major Centres.....................................................................11
Calgary................................................................................................................................12 Edmonton............................................................................................................................13 Halifax .................................................................................................................................14 Hamilton ..............................................................................................................................15 Kitchener .............................................................................................................................16 London ................................................................................................................................17 Montreal ..............................................................................................................................18 Ottawa.................................................................................................................................19 Regina .................................................................................................................................20 Saint John ...........................................................................................................................21 St. John’s.............................................................................................................................22 Saskatoon ...........................................................................................................................23 Toronto ................................................................................................................................24 Vancouver ...........................................................................................................................25 Winnipeg .............................................................................................................................26 Background Notes and Sources .........................................................................................27
Introduction
This report presents charts and analyses for the following: • Homeownership Rates – a series of charts which show the trend in homeownership rates by province over the past several Censuses. For comparison purposes, the rates for both Canada and the U.S. are presented – the U.S. has a slightly higher rate (67.8% in 2001 versus 65.8% for Canada). In large measure, the lower rate in Canada can be traced to the Province of Quebec where renting is a more traditional form of occupancy and where, despite substantial gains in the past 30 years, the homeownership rate (57.9%) remains well below the rest of the country. For the 9 provinces outside of Quebec, the average homeownership rate in 2001 was 68.5%. • Tax Expenditures – a series of three charts showing the Finance Canada estimates of tax expenditures for: − the GST housing rebate − the GST tax-exempt status of residential rents − the non-taxation of capital gains on principal residences. According to Finance Canada, the estimated tax expenditures for these three items in 2003 will total $3.1 billion. • Participation in RRSP Home Buyers’ Plan – a series of charts that show take-up of the Plan for each of the major provinces over the period since it was introduced. The Home Buyers’ Plan allows first-time home buyers to save up to $20,000 per person ($40,000 per couple) for a downpayment on a tax-free basis. The funds borrowed from the RRSP for home purchase must be repaid to the Plan over a period of 15 years beginning in the second year after the withdrawal – no interest is payable on the funds withdrawn. • Housing Market Trends in Major Centres – a series of charts which trace housing trends over the 1986-2002 period in 15 major centres in Canada. The charts cover housing starts (by type), affordability, house and land prices, sales/new listings ratios for resale housing, and rental apartment vacancy rates in each centre. In addition, a brief description of the Ontario Home Ownership Savings Plan (OHOSP) and comments by the Toronto Board of Trade on US mortgage interest and property tax deductibility are provided below.
Ontario Home Ownership Savings Plan
OHOSP was introduced in the 1988 Ontario Budget as a measure to help low-income people buy a first home. Participants must set up a savings plan with a financial institution and can contribute up to $2,000 per year per person ($4,000 per couple) to the Plan for a period of 5 years. Modest-income participants are eligible for a tax credit – the maximum annual credit
2 is $500 per person (which applies to people with incomes of $20,000 or less; the credit is scaled down to zero for people with incomes of $40,000 or more). Within the constraints of the program ($2,000 maximum contribution annually for a period of 5 years), the maximum amount of the savings over the 5 year period of eligibility is $10,000 per person (plus tax credits and accumulated interest). This amount must be used to purchase a home within 7 years of setting up the Plan or the amount of the credits (plus interest) must be repaid to the government. Over the 1988-2001 period, there have been a total of 250,000 participants in OHOSP.
Toronto Board of Trade Comment on US Mortgage Interest and Property Tax Deductibility
“In 1997, it was estimated that the U.S. government spent over $120 billion a year for housing subsidies. While the U.S. system has a number of innovations and has strong private sector involvement, it is not without its critics. “Critics argue that the largest and most regressive housing subsidies are the tax expenditures for investors and homeowners. They cite 1995 figures and estimate that deductions for mortgage interest and property taxes in that year cost the federal government over $72.5 billion. They estimate that approximately one-half (49.7%) of the $58.3 billion in mortgage interest deductions goes to the wealthiest 5.6% of taxpayers with incomes over $100,000. The 1.2% of taxpayers with incomes over $200,000 received $12.6 billion on mortgage interest deduction, representing 21.6% of the entire amount.” The Toronto Board of Trade, Affordable, Available, Achievable – Practical Solutions to Affordable Housing Challenges, April 2003, page 23.
3
Homeownership Rates
CANADA
100 90 80 70
60.3 61.8 62.1 62.1 62.6 63.6 65.8
UNITED STATES
100 90 80 70
Percent
62.9 64.4 64.2 65.4 66.8 67.4 67.8
Percent
60 50 40 30 20 10 0 1971 1976 1981 1986 1991 1996 2001
60 50 40 30 20 10 0 1970 1980 1990 1996 1999 2000 2001
NEWFOUNDLAND
100 90
80 80.6 80.6 80.1 78.6
PRINCE EDWARD ISLAND
100 90
77.1 78.2
80 70
Percent
80 70
Percent
74.3
76.6
75.7
74
73.6
72.1
73.1
60 50 40 30 20 10 0 1971 1976 1981 1986 1991 1996 2001
60 50 40 30 20 10 0 1971 1976 1981 1986 1991 1996 2001
NOVA SCOTIA
100 90 80
71.2 72.4
NEW BRUNSWICK
100 90 80
70.6 70.4 70.8 69.4 73.4 74.2 74.1 73.8 74.5
71.5
71.6
71.8
70
Percent Percent
70 60 50 40 30 20 10 0 1971 1976 1981 1986 1991 1996 2001 1971 1976 1981 1986 1991 1996 2001
60 50 40 30 20 10 0
Source: CMHC, Canadian Housing Observer, US Annual Housing Survey.
4
QUEBEC
100 90 80 70
Percent Percent
ONTARIO
100 90 80 70
53.3 47.4 50.4 54.7 55.5 56.5 57.9 67.8 62.9 63.6 63.3 63.6 63.7 64.3
60 50 40 30 20 10 0 1971 1976
60 50 40 30 20 10 0
1981
1986
1991
1996
2001
1971
1976
1981
1986
1991
1996
2001
MANITOBA
100 90 80 70
Percent
66.1 66.4 65.8 65.5 65.8 66.4 67.8
SASKATCHEWAN
100 90 80 70
Percent
72.7 75.5 72.9
70.1
69.9
68.8
70.8
60 50 40 30 20 10 0 1971 1976 1981 1986 1991 1996 2001
60 50 40 30 20 10 0 1971 1976 1981 1986 1991 1996 2001
ALBERTA
100 90 80 70
Percent
67.8 63.9 64.8 63.1 61.7 63.9 70.4
BRITISH COLUMBIA
100 90 80 70
Percent
63.3 65.3 64.4 62.2 63.8 65.2 66.3
60 50 40 30 20 10 0 1971 1976 1981 1986 1991 1996 2001
60 50 40 30 20 10 0 1971 1976 1981 1986 1991 1996 2001
Source: CMHC, Canadian Housing Observer, US Annual Housing Survey.
5
GST Tax Expenditures
GST Tax Expenditures Housing Rebate*
900
825
800
710
755 665 590 550 520 500 520 435 515 500
700 600
$Millions
500
415
400 300 200 100 0 92 93 94 95 96 97 98 99 00 01 02 03 04
*Includes rebate for rental properties which commenced in 2000 Source: Finance Canada Tax Expenditures (various years)
GST Tax Expenditures Residential Rent*
1,600
1,460
1,400
1,240
1,385 1,310 1,150 1,175
1,200
1,060
1,105
1,000
$Millions
800 600 400 200 0 92 93 94 95 96 97 98 99 00 01 02 03 04
*1992-1996 estimates are not reliable. Finance Canada reduced estimated tax expenditures for residential rent by about one-third in 1997. Source: Finance Canada Tax Expenditures (various years)
6
Tax Expenditures for Non-Taxation of Capital Gains On Principal Residences
1995
1.09 1.44 1.26 1.68 1.34 1.78 0.98 1.31 1.18 1.57 0.96 1.48 0.96 1.91 0.98 1.96 0.98 1.95 0.96 1.93 ($Billions) Partial Inclusion Rate Full Inclusion Rate
1996
1997
1998
1999
2000
2001
2002
2003
2004
Source: Finance Canada Tax Expenditures (various years)
7
Participation in RRSP Home Buyers’ Plan
Participation and Amounts Withdrawn
CANADA
180
Participants
Average Withdrawal
2,000
Withdrawals
12,000
10,803 9,688 9,859 9,139 8,169 10,116 9,921 10,203 10,528
160 140
Participants (000s)
1,800 1,600 1,400 1,200
Withdrawals ($Millions)
10,000
9,622
120 100
8,000
Dollars
1,000 80 800 60 600 40 20 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 400 200 0
6,000
4,000
2,000
0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
NEWFOUNDLAND
9,000 1.6 1.4 1.2
Participants (000s)
1.0 1.4 Participants Withdrawals 8,486 8,359 7,409 7,576 8,284 7,978
14 8,000
7,201
12
Withdrawals ($Millions)
1.1 1.0 1.0 1.1
7,000
6,141
6,574 6,661
1.0
10 8
6,000
Dollars
1.0 0.8
0.9 0.7 0.6
5,000 4,000 3,000 2,000
6 4
0.6 0.4 0.2 0.0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2 0
1,000 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
PRINCE EDWARD ISLAND
10,000 0.5 0.4 0.4
Participants (000s)
9,485 8,433 8,052 7,573 7,020 6,459 6,441 7,624 7,481 7,758
5 9,000 4 8,000 4 3 3 2 2 1 1 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Withdrawals ($Millions)
7,000 6,000
Dollars
0.3 0.3 0.2 0.2 0.1 0.1 0.0
5,000 4,000 3,000 2,000 1,000 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Note: For 1992 and 1993, the data on participation in the Plan cover the period from March 1 to March 1 the following year. For 1994, the data cover the ten months from March 1 to the end of the year. For 1995-2001, the data cover the calendar year. Data are not available for 2002.
8
Participation and Amounts Withdrawn
NOVA SCOTIA
9,000 4.0 3.5 3.0
Participants (000s)
Average Withdrawal
8,486
8,359 7,409 7,576
8,284 7,978
40 8,000
7,201
35
Withdrawals ($Millions)
7,000
6,141
6,574 6,661
30 25 20 15 10 5 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
6,000
Dollars
2.5 2.0 1.5 1.0 0.5 0.0
5,000 4,000 3,000 2,000 1,000 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
NEW BRUNSWICK
10,000 2.5 25 9,000 8,000 2.0
Participants (000s)
8,863 8,770 8,036 7,572 7,072 6,574 6,754 7,077 6,943 6,953
20
Withdrawals ($Millions)
7,000 6,000
Dollars
1.5
15
5,000 4,000 3,000 2,000 1,000
1.0
10
0.5
5
0.0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
0
0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
QUEBEC
14,000 50.0 45.0 600 40.0
Participants (000s)
700 12,000
9,582 9,746 8,373 11,361 10,865 11,745 11,682 11,584 11,995 11,676
35.0 30.0 25.0 20.0 15.0 10.0
500 400 300 200 100
Withdrawals ($Millions)
10,000
Dollars
8,000
6,000
4,000
2,000
5.0 0.0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 0 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Note: For 1992 and 1993, the data on participation in the Plan cover the period from March 1 to March 1 the following year. For 1994, the data cover the ten months from March 1 to the end of the year. For 1995-2001, the data cover the calendar year. Data are not available for 2002.
9
Participation and Amounts Withdrawn
ONTARIO
12,000 70.0 60.0 50.0 40.0 400 30.0 300 20.0 200 10.0 0.0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 100 0 0 800 700
Withdrawals ($Millions)
Average Withdrawal
10,866 9,730 8,376 8,584 9,950 9,776 9,422 10,177
10,615
10,000
9,453
600 500
8,000
Dollars
Participants (000s)
6,000
4,000
2,000
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
MANITOBA
10,000 4.0 3.5 3.0
Participants (000s)
Participants Withdrawals
35 30 25 20
Withdrawals ($Millions)
9,000 8,000
8,686 8,291 7,535 7,033 6,932 7,087 6,349 6,483 6,465 7,819
7,000 6,000
Dollars
2.5 2.0 15 1.5 10 1.0 0.5 0.0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 5 0
5,000 4,000 3,000 2,000 1,000 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
SASKATCHEWAN
10,000 3.5 3.0 2.5 20 2.0 15 1.5 10 1.0 0.5 0.0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 5 30 9,000 25
Withdrawals ($Millions)
8,265 8,699 8,135 7,540 7,091 6,594 6,278 6,157 6,558 6,642
8,000 7,000 6,000
Dollars
Participants (000s)
5,000 4,000 3,000 2,000 1,000
0
0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Note: For 1992 and 1993, the data on participation in the Plan cover the period from March 1 to March 1 the following year. For 1994, the data cover the ten months from March 1 to the end of the year. For 1995-2001, the data cover the calendar year. Data are not available for 2002.
10
Participation and Amounts Withdrawn
ALBERTA
12,000 25.0 250 10,000 20.0
Participants (000s)
Average Withdrawal
9,564 9,572 9,052 8,314 7,963 8,364 8,646
200
Withdrawals ($Millions)
8,000
Dollars
7,496 7,584 7,578
15.0
150
6,000
10.0
100
4,000
5.0
50
2,000
0.0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
0
0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
BRITISH COLUMBIA
12,000 35.0 30.0 25.0 20.0 200 15.0 150 10.0 100 5.0 0.0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 50 0 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 400 350
Withdrawals ($Millions)
10,880 11,157 10,343 10,772 10,556
10,000
9,697 9,517 8,937 8,733 9,123
300 250
8,000
Dollars
Participants (000s)
6,000
4,000
2,000
Note: For 1992 and 1993, the data on participation in the Plan cover the period from March 1 to March 1 the following year. For 1994, the data cover the ten months from March 1 to the end of the year. For 1995-2001, the data cover the calendar year. Data are not available for 2002.
11
Housing Market Trends in Major Centres
The following pages each present a series of six charts to illustrate housing market trends in 15 major centres in Canada over the 1986-2002 period – Calgary, Edmonton, Halifax, Hamilton, Kitchener, London, Montreal, Ottawa, Regina, Saint John, St. John’s, Saskatoon, Toronto, Vancouver and Winnipeg. Housing Starts by Type In all 15 major centres, starts in 2002 were well above the levels of at least the previous three years – and, in many cases, longer. Freehold starts were particularly strong in all of the centres, but condominium starts have also increased significantly in many of the largest centres in recent years – particularly Calgary, Edmonton, Montreal and Toronto. Rental starts remain low in most centres, but have been more buoyant in Edmonton, Halifax, Kitchener, Montreal, Ottawa and Vancouver in the past few years. Affordability With the progressive reduction in interest rates since the early 1990s, affordability has improved significantly over the past 15 years. However, the strong housing markets in many centres have led to rising house prices, which have eroded the gains in affordability to some extent. In most centres, affordability (defined as the percent of median household income required to purchase the average-priced MLS home) is near or better than the levels of the mid 1990s. House Prices Housing prices (both in terms of average prices and the New House Price Index) have been on a steady upward trend over the past several years in most centres – with the notable exception of Vancouver, where prices dropped during the second half of the 1990s and have recently bottomed out. Prices have increased particularly strongly over the past several years in Ottawa, Calgary, Edmonton, Halifax and Kitchener. Sales/New Listings Ratio In almost all of the centres, the ratio of sales to new listings (of MLS dwellings) in 2002 was at or near its recent peak. This is indicative of a strong resale housing market, which leads to increased activity in the new housing market as well. Rental Apartment Vacancy Rates After many years of trending downwards, vacancy rates increased in 12 of the 15 centres in 2002 – only Halifax, Regina and Winnipeg had lower vacancy rates in 2002 than in 2001. The strong economy and generally positive affordability climate (which led many renters to purchase a home), plus rented condominiums, were significant factors in the rise in vacancy rates.
12
CALGARY
Housing Starts By Type Affordability
12,000
40
10,000
35 Percent of median household income required to purchase average MLS home
Dwelling Units
8,000 Freehold 6,000
Percent
30
25
4,000
20
2,000
Condominium Rental
15
0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
10 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Average New and Resale House Prices
$300,000 New (unabsorbed) $250,000 200
Index (1986=100)
New House Price Index
225
Land
$200,000
New (absorbed)
175
House
$150,000 Resale $100,000
150
$50,000
125
$0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
100 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sales/New Listings Ratio
90 80 70 5.0 60
Percent
Rental Apartment Vacancy Rate
7.0 6.0
50 40 30
Percent
4.0 3.0 2.0
20 10 0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 1.0 0.0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sources: Based on data from CMHC, Statistics Canada, Bank of Canada and CREA
13
EDMONTON
Housing Starts By Type Affordability
8,000 7,000
35
30 6,000
Dwelling Units
5,000 Freehold 4,000 3,000 2,000 1,000 Rental 0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 Condominium
Percent
Percent of median household income required to purchase average MLS home
25
20
15
10 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Average New and Resale House Prices
$250,000 225
New House Price Index
$200,000
New (unabsorbed) New (absorbed)
Index (1986=100)
200
Land 175 House 150
$150,000
$100,000
Resale
$50,000
125
$0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
100 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sales/New Listings Ratio
90 80
Rental Apartment Vacancy Rate
12.0
10.0 70 60
Percent
8.0
Percent
50 40 30 20
6.0
4.0
2.0 10 0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 0.0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sources: Based on data from CMHC, Statistics Canada, Bank of Canada and CREA
14
HALIFAX
Housing Starts By Type Affordability
3,000
30 28
2,500
26 24 Freehold
Percent
Percent of median household income required to purchase average MLS home
Dwelling Units
2,000
22 20 18
1,500
1,000 Rental 500 Condominium 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
16 14 12
0
10 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Average New and Resale House Prices
$300,000 225
New House Price Index
$250,000
New (unabsorbed)
200
Index (1986=100)
$200,000
175
$150,000
New (absorbed)
150 Land
$100,000
Resale
$50,000
125 House 100 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
$0
Sales/New Listings Ratio
80 70 60
Rental Apartment Vacancy Rate
10.0 9.0 8.0 7.0
50
Percent
40 30 20
Percent
6.0 5.0 4.0 3.0 2.0
10 0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
1.0 0.0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sources: Based on data from CMHC, Statistics Canada, Bank of Canada and CREA
15
HAMILTON
Housing Starts By Type Affordability
4,000 3,500 3,000
Dwelling Units
50 45 40 35 Freehold
Percent
2,500 2,000 1,500 1,000 500 Rental 0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 Condominium
Percent of median household income required to purchase average MLS home
30 25 20 15 10 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Average New and Resale House Prices
$300,000 New (unabsorbed) New (absorbed) $250,000 200
Index (1986=100)
New House Price Index
225
$200,000
175
$150,000 Resale $100,000
150
House
$50,000
125
Land
$0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
100 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sales/New Listings Ratio
90 80 70 2.5 60
Percent
Rental Apartment Vacancy Rate
3.5 3.0
50 40 30
Percent
2.0 1.5 1.0
20 10 0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 0.5 0.0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sources: Based on data from CMHC, Statistics Canada, Bank of Canada and CREA
16
KITCHENER
Housing Starts By Type Affordability
4,000 3,500 3,000
Dwelling Units
50 45 40 35
Percent
Freehold
2,500 2,000 1,500 1,000 500 Condominium 0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
30 25 20 15 10
Percent of median household income required to purchase average MLS home
Rental
86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Average New and Resale House Prices
$250,000 New (unabsorbed) $200,000
Index (1986=100)
New House Price Index
225
New (absorbed)
200
$150,000 Resale $100,000
175
150
Land House
$50,000
125
$0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
100 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sales/New Listings Ratio
80 70 60 3.5 50
Percent Percent
Rental Apartment Vacancy Rate
5.0 4.5 4.0
3.0 2.5 2.0 1.5
40 30 20
1.0 10 0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 0.5 0.0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sources: Based on data from CMHC, Statistics Canada, Bank of Canada and CREA
17
LONDON
Housing Starts By Type Affordability
3,000
45 40 35 Percent of median household income required to purchase average MLS home
2,500
Dwelling Units
2,000
Percent
30 25 20
1,500
Freehold
1,000 Rental 500 Condominium 15 10 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
0
Average New and Resale House Prices
$250,000 New (absorbed) $200,000
Index (1986=100)
New House Price Index
225
200
New (unabsorbed) $150,000 Resale $100,000
175 Land 150 House 125
$50,000
$0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
100 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sales/New Listings Ratio
80 70 60 50
Percent
Rental Apartment Vacancy Rate
7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0
40 30 20 10 0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Percent
86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sources: Based on data from CMHC, Statistics Canada, Bank of Canada and CREA
18
MONTREAL
Housing Starts By Type Affordability
20,000 18,000 16,000 14,000
Dwelling Units Percent
40
35 Percent of median household income required to purchase average MLS home
30
12,000 10,000 8,000 6,000 4,000 2,000 0 Rental 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 Condominium Freehold
25
20
15
10 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Average New and Resale House Prices
$250,000 225
New House Price Index
$200,000
New (absorbed)
Index (1986=100)
200
$150,000
New (unabsorbed)
175
Land
$100,000
Resale
150 House
$50,000
125
$0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
100 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sales/New Listings Ratio
80 70 60 50
Percent Percent
Rental Apartment Vacancy Rate
9.0 8.0 7.0 6.0 5.0 4.0 3.0
40 30 20 10 0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
2.0 1.0 0.0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sources: Based on data from CMHC, Statistics Canada, Bank of Canada and CREA
19
OTTAWA
Housing Starts By Type Affordability
7,000 6,000 5,000
Dwelling Units
40
35 Percent of median household income required to purchase average MLS home
30 Freehold
Percent
4,000 3,000 2,000
25
20 Rental 1,000 0 Condominium 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
15
10 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Average New and Resale House Prices
$350,000 $300,000 200 $250,000 $200,000 New (absorbed) $150,000 Resale $100,000 125 $50,000 $0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 100
Index (1986=100)
New House Price Index
225
New (unabsorbed)
175
150
Land
House
86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sales/New Listings Ratio
90 80 5.0 70 60
Percent
Rental Apartment Vacancy Rate
6.0
4.0
Percent
50 40 30 20
3.0
2.0
1.0 10 0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 0.0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sources: Based on data from CMHC, Statistics Canada, Bank of Canada and CREA
20
REGINA
Housing Starts By Type Affordability
1,400 1,200 1,000
Dwelling Units
24 22 20 18 16 14 Condominium Rental 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 12 10 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 Percent of median household income required to purchase average MLS home
600 Freehold 400 200 0
Average New and Resale House Prices
$200,000 $180,000 $160,000
Index (1986=100)
Percent
800
New House Price Index
225
New (unabsorbed) 200
$140,000 $120,000 $100,000 $80,000 $60,000 Resale New (absorbed)
175 House 150
Land $40,000 $20,000 $0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 100 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 125
Sales/New Listings Ratio
80 70 60 50
Percent
Rental Apartment Vacancy Rate
7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0
40 30 20 10 0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Percent
86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sources: Based on data from CMHC, Statistics Canada, Bank of Canada and CREA
21
SAINT JOHN
Housing Starts By Type Affordability
900 800 700
Dwelling Units
28 26 24 22
Percent
600 500 400 300 200 Condominium 100 Rental 0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 Freehold
Percent of median household income required to purchase average MLS home
20 18 16 14 12 10 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Average New and Resale House Prices
$200,000 $180,000 $160,000
Index (1986=100)
New House Price Index
225
200 New (absorbed) New (unabsorbed)
$140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0
175
Resale
150 Land 125 House 100
86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sales/New Listings Ratio
60
Rental Apartment Vacancy Rate
10.0 9.0
50
8.0 7.0
Percent
40
Percent
6.0 5.0 4.0
30
20
3.0 2.0 1.0
10
0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
0.0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sources: Based on data from CMHC, Statistics Canada, Bank of Canada and CREA
22
ST. JOHN’S
Housing Starts By Type Affordability
1,600 1,400 1,200
Dwelling Units
28 26 24 Freehold
Percent
22 20 18 16
1,000 800 600 400 200 0 Rental
Percent of median household income required to purchase average MLS home
14 12 Condominium 10 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Average New and Resale House Prices
$200,000 $180,000 $160,000 $140,000 $120,000 New (absorbed) $100,000 Resale $80,000 $60,000 New (unabsorbed) 200
Index (1986=100)
New House Price Index
225
175
150 Land
$40,000 $20,000 $0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
125 House 100 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sales/New Listings Ratio
70 60 50
Rental Apartment Vacancy Rate
18.0 16.0 14.0 12.0
Percent
Percent
40 30 20
10.0 8.0 6.0 4.0
10 0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
2.0 0.0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sources: Based on data from CMHC, Statistics Canada, Bank of Canada and CREA
23
SASKATOON
Housing Starts By Type Affordability
1,600 1,400 1,200
Dwelling Units
28 26 24 22 Percent of median household income required to purchase average MLS home
1,000
Percent
20 18 16
800 600 400
Freehold
14 Condominium 12 Rental 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 10 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
200 0
Average New and Resale House Prices
$200,000 $180,000 $160,000
Index (1986=100)
New House Price Index
225
New (unabsorbed) 200
$140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 Resale New (absorbed)
175
150 House 125 Land 100 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sales/New Listings Ratio
80 70 60
Rental Apartment Vacancy Rate
10.0 9.0 8.0 7.0
50
Percent
40 30 20
Percent
6.0 5.0 4.0 3.0 2.0
10 0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
1.0 0.0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sources: Based on data from CMHC, Statistics Canada, Bank of Canada and CREA
24
TORONTO
Housing Starts By Type Affordability
35,000 30,000 25,000
Dwelling Units
70
60 Freehold
Percent
50
Percent of median household income required to purchase average MLS home
20,000 15,000 10,000 5,000 Rental 0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 Condominium
40
30
20
10 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Average New and Resale House Prices
$500,000 $450,000 $400,000 New (unabsorbed) $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 100 125 New (absorbed) Resale
Index (1986=100)
New House Price Index
225
200 Land 175
$350,000
150
House
86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sales/New Listings Ratio
80.0 70.0 2.5 60.0 2.0 50.0
Percent Percent
Rental Apartment Vacancy Rate
3.0
40.0 30.0
1.5
1.0 20.0 0.5 10.0 0.0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 0.0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sources: Based on data from CMHC, Statistics Canada, Bank of Canada and CREA
25
VANCOUVER
Housing Starts By Type Affordability
14,000 12,000 10,000
Dwelling Units
70
60 Condominium 50
Percent
8,000 6,000 4,000 2,000 0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
40
Percent of median household income required to purchase average MLS home
Freehold
30
20 Rental 10 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Average New and Resale House Prices
$700,000 $600,000 $500,000
Index (1986=100)
New House Price Index
225
New (unabsorbed)
200
175 Land 150
$400,000 New (absorbed) $300,000 Resale $200,000 $100,000 $0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
125
100
House
75 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sales/New Listings Ratio
80 70 2.5 60 2.0 50
Percent Percent
Rental Apartment Vacancy Rate
3.0
40 30
1.5
1.0 20 0.5 10 0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 0.0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sources: Based on data from CMHC, St atistics Canada, Bank of Canada and CREA
26
WINNIPEG
Housing Starts By Type Affordability
4,500 4,000 3,500
Dwelling Units
30 28 26 24
Percent
3,000 2,500 2,000 1,500 1,000 500 0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 Rental Condominium Freehold
22 20 18 16 14 12 10
Percent of median household income required to purchase average MLS home
86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Average New and Resale House Prices
$250,000 New (unabsorbed) $200,000
Index (1986=100)
New House Price Index
225
200
$150,000 New (absorbed) $100,000 Resale $50,000
175
150 House 125 Land
$0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
100 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sales/New Listings Ratio
90 80 70 5.0 60
Percent
Rental Apartment Vacancy Rate
7.0 6.0
50 40 30
Percent
4.0 3.0 2.0
20 10 0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 1.0 0.0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sources: Based on data from CMHC, Statistics Canada, Bank of Canada and CREA
27 Background Notes and Sources: 1. Housing Starts by Type – the number of freehold, condominium and rental starts by year. Freehold starts are mainly single-detached, semi-detached and townhouse units; condominiums are mainly townhouse and apartment units; rental starts are mainly townhouse and apartment units. Rental starts include both private and public rental units. Source: CMHC. 2. Affordability – the percent of median household income required to make the mortgage payments on an average-priced resale home (according to MLS data from CREA). The household income data are based on Census data for 1986, 1991 and 1996, and estimates for the intervening years and the years since 1996 – the post-1996 estimates will be revised when the income data are released from the 2001 Census in June 2003. The mortgage payment estimates are based on a 90% loan-to-value mortgage amortized over 25 years at the average 5-year mortgage interest rate. Source: Based on data from CREA, Bank of Canada and Statistics Canada. 3. Average New and Resale House Prices – three average prices: new single-detached and semi-detached houses absorbed in the fourth quarter of each year (based on CMHC data), new unoccupied single-detached and semi-detached houses in the fourth quarter of each year (also based on CMHC data), and the average price of resale homes (according to MLS data from CREA) in each year. The data for the prices of new houses absorbed are not available for the 1980s. Source: Based on data from CMHC and CREA. 4. New House Price Index – based on 1986=100, the index of the prices of land and new houses (excluding land). This chart shows the trend in prices for a constant quality new house and land over the period. Source: Statistics Canada. 5. Sales/New Listings Ratio – the ratio of sales of resale homes to new listings of resale homes in each year. This is a measure of the strength in the resale market – a high sales/new listing ratio indicates a strong market; a low sales/new listings ratio indicates a slower market. Source: CREA. 6. Rental Apartment Vacancy Rates – the vacancy rates for privately-owned rental apartment buildings with 3 or more units in October of each year. Source: CMHC.