Bank economists have been releasing their latest predictions about the economy, but it is perhaps the Canada Mortgage and Housing Corporation’s recent release that is most pertinent to anyone selling, buying or building a home. While a home influences our emotional senses, we still want to know we made a wise investment. And it is in times of economic uncertainty that our financial know-how is tested.
So, what does the future hold according to CMHC? The experts there say a gradually improving Ontario economy, increasing household formation, improved financial market conditions and declining new home inventories will support housing activity. They also predict that we will see stronger economic growth in 2011, although the impending harmonized sales tax and higher interest rates will temper housing activity as strength trickles into other sectors of the provincial economy.
Ontario will be among the leading provinces fuelling the economic recovery across Canada in the next few years, according to CMHC. Strong provincial and federal government spending will support the provincial economy. Consumer spending is also on the rise and bankruptcies have dipped in recent months, further pointing to a recovery. Similarly, recent business outlook surveys indicate firms are optimistic about their business prospects in the next 12 months and will soon boost inventories to satisfy growing demand. This growth will mean more jobs. CMHC, however, cautions that a high Canadian dollar, productivity enhancing business investments and cautious U.S. consumer spending will temper employment growth in goods producing sectors of the economy.
The corporation sees new home starts continuing to lead the recovery and expects single detached homes starts will increase by more than 37 per cent this year and multi-family home construction will grow by more than 15 per cent. “Ontario existing home sales have remained remarkably resilient and will reach new highs this year… The strong pace in sales seen in recent quarters reflects households taking advantage of low mortgage carrying costs,” the CMHC report says.
While CMHC claims home sales are likely to cool during the second half of 2010 and into 2011 as rising mortgage carrying costs dampen demand among first-time buyers, Oakville and Burlington have always bucked the provincial and national trends. Our pocket of affluence has sheltered us from the wild price swings we have witnessed elsewhere in the country and our homes, while seeing some cooling in price during the recession, have always maintained their value and continued to support a wise investment. This is borne out by the latest local real estate board releases. Residential resales were up by 20 per cent in Oakville and 38 per cent in Burlington in April compared to April 2009 and prices were 11 per cent higher in both communities this year compared to the same month last year. The luxury market continues to heat up in Oakville, recording 22 sales over a $1 million last month compared to 10 in April 2009. Whether you are ready to sell, buy or build, Oakville and Burlington have proven time and time again to be among the best communities to invest in – both financially and for quality of life.
Dan Cooper is an award winning Broker with Royal LePage Real Estate Services Ltd., Brokerage – the Number 1 Royal LePage Team for Canada in 2009. He can be reached at 905.338.3737, direct line at 905.849.3303 or through his innovative and interactive website at DanCooper.com. Be sure to catch the Dan Cooper Real Estate Series on DailyWebTV.com. For his free booklet How To Sell Your House For Top Dollar – Fast! or his Guide to Oakville Real Estate, please call the Dan Cooper Team.