Ontario mortgage rates update
Ontario's stable economic outlook will keep housing demand high
The CMHC has reported that a stable Ontario economic outlook will help sustain a high level of housing demand. New home building will reach 69,150 and 67,150 starts in 2008 and 2009 respectively. Ontario’s existing home market is forecasted by the CMHC to have a near record year as high new detached home prices, more choice in the resale market and residential land constraints will drive activity in the existing home market. Growth in Ontario’s economy will lag behind the Canadian average. Ontario economic growth will drop to 1.8 per cent this year before rising to 2.4 per cent in 2009. Growth will be down from a ten year annual average of 3.5 per cent. Ontario’s goods sector, particularly auto assembly, auto parts and forestry, will continue to weigh on growth through the first half of 2008 due largely to slower U.S. economic growth and a high Canadian dollar. The goods sector will continue to downsize its workforce, however, some of these workers will be taken in by stronger consumer driven services. Low interest rates, healthy consumer confidence and rising incomes will support consumer spending, domestic demand and growth across the province. The economic growth gap between the west and Central Canada will narrow. Ontario’s population growth will be largely driven by international migration, even though Ontario’s share of international migration has dropped recently relative to the rest of Canada.
Ontario existing house sales forecast to reach 208,000 in 2008
After record sales activity in 2007, Ontario existing home sales will move slightly lower to 208,000 in 2008 and 201,500 unit sales 2009 . While rising mortgage carrying costs will dampen home sales, more choice across broader price ranges will keep resale volumes well above historical norms.
MLS price in Ontario set to rice by 6.2% in 2008
The average MLS price in Ontario will rise by 6.2 per cent and 2.9 per cent in 2008 and 2009 respectively. Price growth will be running above inflation in the immediate term thanks to tighter resale market conditions. However, a more balanced resale market resulting from higher listings points to weakening price pressures longer term.
Ontario key stats
Metric Ontario Canada
Population 12,803,900 2007 32,568,000
Consumer Price Index
Mar'08 (2002 = 100)
112
113
Average earnings
(Feb'08)
$42,675
$40,914
Unemployment rate
(Mar'08 )
6.4%
6.0%
Housing starts
(Mar'08)
80,000
243,000
2007 (E) Average Residential Resale Price 2008 (F)
$299,493
$306,397*
7.6%
$318,200
10.6%
$322,400*
(annual % change)
2009 (F)
6.2%
$327,500
5.2%
$334,500*
2.9%
3.8%
Chartered banks
$66,308,862,000 $152,478,903,000
Mortgages approved by lenders, residential 2006
Trust $2,349,131,000 companies
$6,664,898,000
Life and companies $10,184,530,000 $30,225,144,000 other
Total
Source: Stats Canada, CMHC 2007 E = estimated by the CMHC
$78,842,523,000 $189,368,945,000
* Canada calculation excludes Yukon and Northwest Territories Data based on application received date Mortgage approval data are gross and may not fully capture lending activities of credit unions, caisses populaires, other smaller institutions and privatelyinsured loans in some areas Quebec data is understated due to low response rate to the surveys in that province. *Conventional Lending data only
Local Market Indicators
Sources: CMHC, Canadian Real Estate Association, Local Real Estate Boards, Statistics Canada
Census Metropolitan Area
Total Housing Starts
MLS sales
MLS average price
2007
980
5,000
$259,000
Barrie
2008 (F)
920
4,800
$271,000
2009(F)
820
4,700
$281,000
2007
555
2,300
$209,000
Brantford
2008 (F)
560
2,400
$219,500
2009(F)
550
2,370
$229,000
2007
941
3,150
$262,000
Guelph
2008 (F)
920
3,000
$273,000
2009(F)
910
2,900
$282,000
2007
3,004
14,240
$272,000
Hamilton
2008 (F)
3,040
14,180
$298,000
2009(F)
2,890
13,900
$310,000
2007
880
3,767
$221,808
Kingston
2008 (F)
774
3,692
$230,237
2009(F)
828
3,581
$237,605
2007
2,740
7,000
$251,000
Kitchener
2008 (F)
2,675
6,800
$262,000
2009(F)
2,725
6,600
$272,000
2007
3,141
9,750
$202,350
London
2008 (F)
3,012
9,360
$212,500
2009(F)
2,872
9,000
$220,700
2007
2,389
10,000
$273,415
Oshawa*
2008 (F)
2,515
9,900
$285,000
2009(F)
2,440
9,500
$295,000
2007
6,506
14,900
$272,000
Ottawa
2008 (F)
6,400
14,750
$285,000
2009(F)
6,425
14,650
$293,000
2007
540
2,900
$231,000
Peterborough
2008 (F)
465
2,800
$242,000
2009(F)
435
2,700
$250,000
St.CatharinesNiagara
2007
1,149
6,700
$203,300
2008 (F)
1,042
6,600
$212,500
2009(F)
957
6,500
$218,900
2007
587
2,900
$179,769
Sudbury
2008 (F)
675
3,100
$197,746
2009(F)
605
3,250
$210,000
2007
249
1,650
$131,288
Thunder Bay
2008 (F)
245
1,667
$135,000
2009(F)
255
1,685
$140,000
2007
33,293
95,500
$375,500
Toronto
2008 (F)
35,000
91,000
$405,000
2009(F)
33,600
86,500
$420,500
2007
614
5,000
$164,000
Windsor
2008 (F)
570
4,700
$161,000
2009(F)
MLS = Multiple Listings Service *MLS numbers reflect all of Durham Region
560
4,800
$162,500
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