Tag Archives: new homes market
Home building climbs in February
Housing starts accelerate to 196,700 units, topping expectations, while poll says home-buying intentions are also on the rise
Tavia Grant – Globe and Mail
Housing activity picked up speed last month, topping expectations as builders broke ground on condominiums and other multiple-unit dwellings.
Starts rose to 196,700 units in February, on a seasonally adjusted annual rate, from 185,400 units in January, Canada Mortgage and Housing Corp. reported Monday.
Home building has revved back to life after the recession caused housing starts to fall below 120,000 last spring. Low borrowing costs and a rush to beat a provincial sales tax in some provinces are spurring demand – and builders are responding accordingly.
“It appears that the new homes market is slowly coming back to life and may finally be benefiting from the resurgence in overall housing market activity,” said Ian Pollick, economics strategist at TD Securities. “Housing still remains a bright spot in Canadian economic activity.”
The pace of advance, however, may not continue in the latter half of this year as interest rates rise and demand tapers off, he cautioned.
February’s gain in housing starts was concentrated in the multiple starts segment, particularly in Toronto, said Bob Dugan, chief economist at CMHC’s market analysis centre. Multiple units include condos, town houses and duplexes. CMHC doesn’t break down which aspect of multiple construction is rising fastest.
Urban multiple starts, which tend to be more volatile, jumped 19.1 per cent while single urban starts rose 0.5 per cent.
Ontario led the country’s starts, with a 28.6-per-cent increase. They rose 14.3 per cent in Atlantic Canada, 10.8 per cent in the Prairie region and 8.0 per cent in British Columbia. In Quebec, they fell 14.1 per cent.
Economists polled by Bloomberg had expected 190,000 starts in the month.
Home-buying intentions remain strong, according to a poll by the Royal Bank of Canada released Monday. The portion of Canadians who are very likely to purchase a home in the next two years has risen to 10 per cent from 7 per cent two years ago, according to RBC’s home ownership study. Younger Canadians – aged 18 to 24 – will lead demand this year, with those very likely to buy almost doubling to 15 per cent from 8 per cent in 2009, it said.
Most Canadians also believe house prices will rise this year. Six in 10 think prices will go higher, up from 25 per cent in 2009. And nearly two-thirds, or 64 per cent, believe mortgage rates will be higher over the next year, up from 33 per cent in the last survey.
————————————————————————————————————
Contact the Jeffrey Team for more information - 416−388−1960
————————————————————————————————————
Related posts:
- Leap in home building offers hope Construction of new homes has surged by a surprising eight…
- Housing starts rise 6.1% in February Home construction rose by a more-than-expected 6.1 per cent to…
- Home ownership more affordable It is becoming even more affordable to own a home…
- Housing offers glimpses of cooling Canadian housing activity continues at a bustling pace, but…
- Housing activity on brink of rebound CMHC says improving activity on the resale market and lower…
Housing starts rise 6.1% in February
Financial Post
Home construction rose by a more-than-expected 6.1 per cent to 196,700 units in February, Canada Mortgage and Housing Corp. reported Monday.
That was up from 185,400 units in January and above economists’ forecasts of 190,000 units for February.
“The gain in February housing starts was concentrated in the multiple starts segment, particularly in Toronto,” said CMHC’s chief economist Bob Dugan.
Urban housing starts were up 9% from January to 179,100 units on a seasonally adjusted basis, with multiple units rising 19.1% to 89,900 and single starts increasing 0.5% to 89,200 units.
Ontario recorded a 28.6% gain in February, while Atlantic Canada rose 14.3%, the Prairie region increased 10.8% and British Columbia was up 8%. Meanwhile, Quebec saw housing starts decline 14.1%.
Housing starts in rural areas totalled 17,600 units in February, down from 21,100 the previous month.
Ian Pollick, economics strategist at TD Securities, said February’s gain shows “the new homes market is slowly coming back to life and may finally be benefiting from the resurgence in overall housing market activity.”
“However, we caution that the pace of advance will likely be hard pressed to eke out similar gains later in the year, mainly as a result of enthusiastic buyers attempting to close transactions ahead of the regulatory (new mortgage rules) and (harmonized sales)tax changes coming into effect mid-2010.
“As such, this report likely overstates the true strength of the recovery in new residential housing, though it is safe to say that housing still remains a bright spot in Canadian economic activity.”
————————————————————————————————————
Contact the Jeffrey Team for more information - 416−388−1960
————————————————————————————————————
Related posts:
- Home building climbs in February Home building has revved back to life after the recession…
- Housing starts post surprise jump Home construction rose unexpectedly in March, led by Ontario and…
- Housing starts hit 2009 high As for single home construction, despite a dip in October,…
- Leap in home building offers hope Construction of new homes has surged by a surprising eight…
- Housing activity on brink of rebound CMHC says improving activity on the resale market and lower…
They don’t pay off their houses like they used to
Attitudes are changing in a key slice of the home-buying population
Terrence Belford – Globe and Mail
If you follow the new homes market then you know that for the past six months it has been young first-time buyers who are accounting for the lion’s share of sales. But how well does the housing industry really know what 18 to 34 year olds want in a home?
A survey released by TD Canada Trust last month may offer some surprises. Chief among them is that young people would much prefer an older single family house that they could fix up to anything else on the market.
Nor do they look at paying off their mortgage with any particular urgency, placing them in sharp contrast with previous generations. And not surprising, perhaps, more than a third of them looked to mom and dad or maybe grandma and grandpa to make that first home purchase come true.
“There has been a distinct shift in attitude among today’s 18 to 34 age group from those 55 and older when it comes to buying that first home,” says Chris Wisniewski, group product manager in TD Canada Trust’s real estate secured lending unit. “Some of those changes may simply be due to the prices of homes of all kinds today. Some may be because they have been exposed more to the basics of personal finance since they were young.”
And some may be anybody’s guess.
Take choice of housing. The cross-Canada survey says young people prefer city living (64% versus 50% of that 55 plus age group, when they were buying their first home) and that their first purchase was a single family house not a condo or row house (65%). Granted 85% of those in that 55 and over age group said their first home was a detached house.
City life also means older homes. Almost 48% of the young chose a house that was at least 21 years old and 35% said they chose a house they could then fix up. That too is a big leap from want their elders did. In that 55 plus age group only 24% said their first home was a fixer-upper.
“A lot of people would assume younger people living in a city would naturally choose affordable condos. This study shows that just is not happening,” says Ms. Wisniewski. “It would also suggest that price determines what they buy so that means older homes they plan on renovating.
So where is the money coming from? Family, of course; 36% of young buyers said they could not have bought that first home without financial help from family. The oldies were more self reliant and probably did not have parents as well heeled as today’s baby boomers. Only 16% of those 55 plus got family help with their first home.
Nor do many of them stay within the original budget. Almost a third of the 18 to 34 group said their first home was more expensive than they originally planned. The 55-plus group was far better at staying within spending limits. Only 18% of them paid more than they intended.
They may have had to borrow from or ask mom and dad to give them money for the down payment but they are not in as great a rush to pay down mortgages as their parents were, the survey shows. Just 49% of young home buyers rated paying off a mortgage as a top priority compared with 64% of their parents’ generation.
The main impetus for buying that first home is also surprising. It was not because they were getting married or about to have kids. Those reasons both ranked in low double digits.
The 18 to 34 years olds simply thought they were financially ready – having to count on help from mom and dad aside – and it would prove to be a good investment. Just over half (51%) cited being financially ready versus 37% of the older generation when they bought their first home.
Now back to buying older homes – fixer-uppers. Royal Bank of Canada surveyed 2,050 Canadians who planned on doing home renovations within the next two years in the second week of September. They found 63% of them would take advantage of the federal government’s home renovation tax credit and 46% of them had already done so.
What is more 76% have paid or plan to pay for the work with cash or savings, versus 70% in 2008. Just 24% will put it on their credit card versus 32% last year.
“It is not surprising that Canadian renovators are getting smarter with renovation financing and voiding debt in light of the current economy,” says Marcia Moffat, head of home equity financing at RBC.
————————————————————————————————————
Contact the Jeffrey Team for more information - 416-388-1960
————————————————————————————————————
Related posts:
- Home ownership at record levels… so is mortgage debt By Colin Perkel – The Canadian Press Never before have so...
- Housing industry says fed budget ignores calls for home affordability Canadian homebuilders and real estate brokers say the stay-the-course federal...
- Home ownership at record levels… so is mortgage debt Interest rates at or near historical lows combined with low...
- Real estate industry seeks jump-start CREA is asking Ottawa to raise the limit on RRSP...
- Easy credit, soaring prices raise new housing fears Canadians are in the midst of a mortgage binge,...
