Thought you guys might wanna read some stats that arent being spewed by someone who doesnt know BC....
CMHC forecasts real estate prices will show more modest growth in 2012
By TRACY SHERLOCK and Kim Covert, Vancouver Sun and Postmedia News December 29, 2011 4:07 PM
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VANCOUVER, B.C.- OCTOBER 4, 2011- Generic real estate, for sale homes, and construction photos, in Vancouver, B.C. on October 4, 2011 (Ian Smith-PNG) Trax-00056315A [PNG Merlin Archive] [PNG Merlin Archive]Photograph by: Ian Smith, Vancouver SunAfter surprising growth in 2011, Greater Vancouver real estate prices will rise just two per cent in 2102, Canada Mortgage and Housing is forecasting.
In 2011, CHMC predicted price growth of just three per cent, tempered by an expectation of higher interest rates, but interest rates stayed low and prices ultimately jumped 16 to 17 per cent.
In 2012, the market will stabilize and show modest growth in line with inflation, said Robyn Adamache, senior market analyst with CMHC in Vancouver.
“I’d say it’s a pretty stable market out there. We’re not expecting to see a lot of change going forward,” Adamache Thursday said in an interview. “We have seen the market moving to more balanced conditions over the past five or six months, and that’s expected to continue.”
She said job growth and migration, including people from within Canada and immigrants, are the factors driving the housing market, and they should continue.
“So far, for the first 11 months of 2011, we’ve seen about 30,000 additional jobs created in the Metro Vancouver area,” Adamache said. “We’re forecasting that we’ll see 35,000 to 40,000 people moving here each year, going forward.”
Not all municipalities saw this kind of growth in housing prices in 2011; the west side of Vancouver and Richmond led the way with 20-per-cent or higher increases for single family homes, while other municipalities and multi-family homes saw lower growth.
For the five years leading up to 2010, the compound annual growth rate in Greater Vancouver for all types of homes was 10 per cent, while the 20-year average was six per cent, Adamache said.
In some areas, such as Maple Ridge, prices of condominiums have not recovered to pre-recession prices, Adamache said.
The average price of a home in Greater Vancouver, including single-family and multi-family homes, for 2011 up to Nov. 30 was $796,000. CMHC is calling for that average to rise to just over $800,000 by the end of 2012.
For November only, the monthly average was down slightly to $736,000, and Adamache said that trend might continue into the first half of 2012.
“I think we will see prices staying fairly flat until later in 2012,” Adamache said.
Across the country, prices were 5.8 per cent higher in 2010, to an average $339,042.
Forty-eight per cent of households in Vancouver own their own homes, while nationally the average is 68 per cent.
In Greater Vancouver, housing starts will see growth of about five per cent in 2012, compared to 12 to 15 per cent in 2011, and the number of houses sold will also increase about nine per cent over 2011, Adamache said.
Meanwhile, CMHC released its 2011 Canadian Housing Observer Thursday, showing that Canadians owed more than a trillion dollars on their mortgages as of March, which when added to other household debt is a “serious issue.”
The CMHC reported that housing-related spending of about $330 billion a year in 2010 has risen by 67 per cent since 2001 and now comprises 20.3 per cent of Canada’s gross domestic product in 2010 — which underlines the importance of that debt load, and what might happen to the economy if for any reason Canadians crack under its burden.
CMHC figures show that mortgages made up about 68 per cent of total household debt in 2010 — up from 63 per cent in 1971 but down from the peak of 75 per cent in 1993. Consumer credit, which makes up the other 32 per cent, has been growing faster than mortgage debt over the past two decades, it says.
A breakdown of these numbers for B.C. was not available; however, the report shows that B.C. has a high percentage of mortgage-free homeowners at 47 per cent, a number second only to Cape Breton.
“The major risk in the mortgage market is impairment in a household’s ability to pay, often due to job loss. Recession or other adverse economic scenarios, such as rising interest rates, could certainly pose a challenge for some Canadian households,” the report states.
Canadians’ debt levels have been growing fairly steadily since the 1960s, the report notes, but adds that a number of more recent factors have allowed debt to grow to its current record level, including low interest rates, rising household incomes and financial product innovations, which have allowed Canadians to make lower payments on higher debt loads.
While about 6.5 per cent of Canadian households are financially vulnerable according to Bank of Canada guidelines, the CMHC says continued employment growth, increasing net worth of households and a growing population are all positive factors for housing email@example.com
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