CMHC HOUSING MARKET OUTLOOK
Vancouver Highlights:
• Moderating MLS® sales and more homes listed for sale will move the resale market into more balanced market conditions.
• Home prices will rise 11 per cent this year, with most of the gains taking place in the fi rst half of the year.
• Modest price growth is forecast for 2011.
• New home construction will increase, but stay below the ten-year average level, this year and next.
• Improving economic and labour market conditions will mean slightly lower rental apartment vacancy rates in 2010 and 2011.
Abbotsford/Fraser Valley Highlights:
• Fraser Valley resale market to remain balanced, with sales volumes projected to increase by nine per cent.
• Fraser Valley home prices to increase at a modest one to three per cent in 2010.
• Surrey will be the strongest housing market
• New home construction in the Abbotsford CMA is also forecast to increase but remain below its ten year average.
• Abbotsford rental market will tighten as demand increases from new immigrants.
Mortgage Rates:
The Bank of Canada cut the Target for the Overnight Rate in the early months of 2009. The rate was 1.50 per cent at the start of 2009 and has since fallen to 0.25 per cent. Looking ahead, we expect that shortterm interest rates will begin to rise in the second half of 2010.
With the overnight rate expected to increase in the coming months, mortgage rates have begun to rise.
According to CMHC’s base case scenario, posted mortgage rates will gradually increase throughout the course of 2010, but will do so at a slow pace. For 2010, the one-year posted mortgage rate is assumed to be in the 3.6-4.8 per cent range, while three and five-year posted mortgage rates are forecast to be in the 4.2-6.7 per cent range. For 2011, the one-year posted mortgage rate is assumed be in the 5.0-6.0 per cent range, while three and five-year posted mortgage rates are forecast to be in the 5.6-7.2 per cent range.
Rates could, however, increase at a faster pace if the economy recovers more quickly than presently anticipated.
Conversely, rate increases could be more muted if the economic recovery
• Moderating MLS® sales and more homes listed for sale will move the resale market into more balanced market conditions.
• Home prices will rise 11 per cent this year, with most of the gains taking place in the fi rst half of the year.
• Modest price growth is forecast for 2011.
• New home construction will increase, but stay below the ten-year average level, this year and next.
• Improving economic and labour market conditions will mean slightly lower rental apartment vacancy rates in 2010 and 2011.
Abbotsford/Fraser Valley Highlights:
• Fraser Valley resale market to remain balanced, with sales volumes projected to increase by nine per cent.
• Fraser Valley home prices to increase at a modest one to three per cent in 2010.
• Surrey will be the strongest housing market
• New home construction in the Abbotsford CMA is also forecast to increase but remain below its ten year average.
• Abbotsford rental market will tighten as demand increases from new immigrants.
Mortgage Rates:
The Bank of Canada cut the Target for the Overnight Rate in the early months of 2009. The rate was 1.50 per cent at the start of 2009 and has since fallen to 0.25 per cent. Looking ahead, we expect that shortterm interest rates will begin to rise in the second half of 2010.
With the overnight rate expected to increase in the coming months, mortgage rates have begun to rise.
According to CMHC’s base case scenario, posted mortgage rates will gradually increase throughout the course of 2010, but will do so at a slow pace. For 2010, the one-year posted mortgage rate is assumed to be in the 3.6-4.8 per cent range, while three and five-year posted mortgage rates are forecast to be in the 4.2-6.7 per cent range. For 2011, the one-year posted mortgage rate is assumed be in the 5.0-6.0 per cent range, while three and five-year posted mortgage rates are forecast to be in the 5.6-7.2 per cent range.
Rates could, however, increase at a faster pace if the economy recovers more quickly than presently anticipated.
Conversely, rate increases could be more muted if the economic recovery
Population growth in the Vancouver
More than seven out of ten immigrants to Vancouver in the final quarter of 2009 came from Asia (Mainland China, India or Taiwan)