The housing market may be a boring place for the next year, according to CMHC, as the number of starts remains near current levels and resale prices hold steady.

In its Q4 market update, Canada Mortgage and Housing Corp. said mortgage rates would likely remain at historically low levels at least until the last half of 2012. The housing market’s fate is largely tied to rates, the agency said.

Economists and market watchers have predicted a variety of scenarios for house prices in the next year, with some suggesting prices could drop as much as 10 per cent by the end of 2012. Capital Economics goes a step further, having predicted a drop of 25 per cent in the next several years as demand weakens amid higher mortgage rates.

“Should rates move lower than projected, housing starts and MLS sales could be higher than expected and house prices could grow at a faster pace than forecast,” the report stated. “Alternatively, should financial market expectations improve and interest rates move higher than projected, housing starts and MLS sales could be lower than expected and house prices could grow at a slower pace than forecast.”

CMHC said there could be as many as 470,100 resales in Canada this year, and expects that number to rise to 485,500 in 2012.

“We expect balanced market conditions to prevail and the average MLS price to remain fairly flat to the end of 2012,” the report stated.

CMHC said 186,750 new homes would be built in 2012, compared to 191,000 for 2011. Analysts generally agree that at least 175,000 new homes are needed each year to meet demand from new families and immigration.

“Ontario, Saskatchewan and Nova Scotia’s growth will be the strongest, while Prince Edward Island and British Columbia are forecast to see modest growth,” CMHC said. “The other provinces, on the other hand, are expected to see decreases. In 2012, housing starts are forecast to increase in British Columbia, Alberta and Manitoba.”

Other highlights from the report:

* Posted mortgage rates will remain relatively flat until late 2012. For 2012, the one-year posted mortgage rate is expected to be in the 3.4 to 3.8 per cent range, while the five-year posted mortgage rate is forecast to be within 5.2 to 5.7 per cent.

* Single starts have rebounded coming out of the recession. After an increase in the third quarter of this year, they are expected to moderate before rising later in 2012.

* Since the beginning of 2011, new listings steadily outpaced existing home sales. As a consequence, the resale market has moved from sellers’ to balanced market conditions.

The agency said the economic outlook for the country was uncertain, making it difficult to forecast growth in the housing market.

“Sustained financial market uncertainty has heightened risks but, there are both upside and downside risks to the outlook,” the agency stated.

The positive: “Some upsides include the potential that the U.S. could recover stronger than is forecast, thus increasing U.S. employment and economic growth. This could, in turn, boost employment growth in Canada and lead to stronger than anticipated housing demand.”

The negative: “Some downsides include a slower than expected recovery for the U.S., reduced economic growth in emerging economies and a downturn in parts of Europe. Such events could result in slower employment growth in Canada, which could lead to lower demand for housing.”

Source: Steve Ladurantaye, Globe and Mail

Vancouver Sun October 29th, 2011

3337 164A St., Surrey

Type: 5-bedroom, 5-bathroom detached
Size: 5,052 sq. ft.
B.C. Assessment, 2011: $1.289 million
Listed for: $1.549 million
Sold for: $1.455 million
Sold on: Aug. 21
Days on market: 32
Listing agent: Monica Lee and Tracey Muter at Royal LePage — Coronation Park
Buyer’s agent: Summer Lin at Sutton Group — West Coast Realty

The big sell: One of the finest features of this custom-designed Morgan Creek house is the craftsmanship that gives the home a natural elegance. Wainscotting and heavy mouldings in each of the principal rooms combine with rich, dark-stained walnut hardwood and natural slate stone flooring, creating a seamless flow throughout the home. There are floor-to-ceiling built-in cabinets surrounding the fireplace in the family room, an arched doorway that leads to the living room, and a bespoke kitchen that showcases antique finished cabinetry, an entertainment-sized island and a separate butler’s pantry with plenty of storage. The basement has two bedrooms, two full bathrooms, and a 21-by-26-foot recreation room that has space for a billiards table and a wet bar. There are plenty of entertaining options outside of the dwelling as well, with a large covered patio containing a seating area and gas fireplace, and an in-ground swimming pool and hot tub.

3813 McKay Place, Richmond

Type: 6-bedroom, 4-bathroom detached
Size: 2,916 sq. ft.
B.C. Assessment, 2011: $778,000
Listed for: $928,000
Sold for: $912,000
Sold on: Sept. 12
Days on market: 28
Listing agent: Beth Tioseco at Coldwell Banker Premier Realty
Buyer’s agent: Amal Chebaya at Macdonald Realty

The big sell: According to listing agent Beth Tioseco, the buyers were looking in the Oaks subdivision of Richmond because of its larger homes and proximity to Vancouver. This home in a private, quiet cul-de-sac met their criteria. With almost 3,000 square feet of living space, it is ideal for a large or growing family with a bedroom and three-piece bathroom on the main floor, which could accommodate older occupants. The house was built in 1990 and is brightly accented with skylights and a contemporary décor. The kitchen has ample counter space and is connected to an eating area and a recently-renovated family room. The rest of the bedrooms are upstairs, including a 19-by-15-foot master bedroom with a walk-in closet and an ensuite bathroom with a Jacuzzi. The front and back yards have manicured lawns and flower beds.

3323 Windsor St., Vancouver

Type: 3-bedroom, 3-bathroom townhouse
Size: 1,151 sq. ft.
B.C. Assessment, 2011: $N/A
Listed for: $683,900
Sold for: $700,000
Sold on: Aug. 27
Days on market: 67
Listing agent: Mario Felicella at Sutton Group — West Coast Realty
Buyer’s agent: Liana Yap at Sutton Group — West Coast Realty

The big sell: The Nine is a new townhouse development that has been built opposite Charles Dickens elementary school and Sunnyside Park in Vancouver’s Cedar Cottage neighbourhood. The three-level homes have private entryways with marble flooring and vaulted ceilings, gourmet kitchens with stainless-steel appliances (including gas cooktops), European white cabinets and quartz stone countertops. The living and dining rooms have an open-concept design that is enhanced by dark oak hardwood floors, limestone-framed fireplaces, recessed lighting, and built-in wiring for surround sound. The second level features two bedrooms with closet areas, while the master bedroom suite occupies the top floor. The latter has a walk-in closet with organizers, an ensuite bathroom, skylights, and a deck. All three bathrooms have underfloor heating, and all homes have attached garages.

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