CMHC predicts stable Canadian housing market

CMHC predicts little change in Canadian housing market in 2012 and 2013

By The Canadian Press  | February 13, 2012

OTTAWA – Canada Mortgage and Housing Corp. is predicting the Canadian housing market will remain fairly stable this year and next, with little change from 2011 in prices, new home construction and sales of existing homes.

The national housing agency says that’s because the economy appears set to expand at only a moderate pace over the next two years and mortgage rates will remain low.

The CMHC says it expects the average house price in Canada to hit $368,900 for 2012 and $379,000 for 2013.

Housing starts are expected to be around 190,000 units this year and 193,800 units in 2013, while existing home sales are expected at about 457,300 units in 2012 and moving a little higher to 468,200 units in 2013.

Low mortgage rates and high demand have driven housing prices sharply higher in large urban centres such as Toronto and Vancouver, leading many experts to warn that a housing bubble could burst when rates finally do rise.

Despite those warnings and alarms from top government officials that Canadians are taking on too much debt overall, the housing market has seen little change over the past few years, with price growth slowing but not retreating in most areas.

Condo Trends

Condo Trends

By Marissa Ponikowski

When it comes to condos, staying on the cutting edge of style and decor is key. The general perception of what’s hot and what’s not can change daily, so choosing trendy yet timeless decorating styles and furniture pieces is the true challenge for the condo dweller. Always keep resale value in mind when you paint or make upgrades. Chances are, you won’t live in this condo forever and when you do sell, you want the place to be attractive to a wide demographic–rather than simply to those who share the same tastes you do.

What’s Hot:

Clutter-Free Living
The choice to live in a condo generally means one must commit to living clutter-free. Although most condos have a storage locker and at least one closet, the space for storage is quite limited compared to that of other types of homes. That’s why it’s so important to adopt a Zen-like approach to clutter and possessions. If you don’t need it, sell it, give it to charity or throw it out. If you don’t know where you’ll put it, don’t buy it. Life is much easier without too much stuff, and condos are much more attractive when they aren’t packed with useless possessions.

Flowing Decor

When decorating a condo, choose a theme and stick with it. Condos and condo townhouses are generally open-concept and fairly small, and introducing too many colour schemes will overpower the space. When painting, choose a colour that you can repeat–for example, paint your bedroom the same colour as your washroom to give the impression of an ensuite and then chose a lighter or darker version of the shade for the living area and kitchen.

Dramatic Wood Finishes

It’s tempting to go with deep, dark paint colours when seeking to add drama to your condo decor, but particularly in a small space, this is not a great idea. Instead, stain the floors a dark oak or cherrywood finish. Cupboards can be outfitted with dramatic finish as well and furniture in rich distressed black stain is another attractive way to add depth to your decorating.

Streamlined Storage

Maximize closet space by building shelves and installing closet organizers. Make every square foot count–even under the bed! Buy thin plastic storage boxes which slide easily into small spaces and use them to store seasonal clothing, wrapping paper, gift bags and more. Invest in drawer organizers and cupboard shelves, too.

What’s Not:

Garish Paint Colours

Lime green may be your favourite colour–and very in to boot–but that doesn’t mean lime is a wise paint colour choice. If you love it, don’t shy away completely, but don’t make it the main focus of your space, either, as rich colours tend to dominate. Instead, choose boldly-coloured accessories such as blankets, throws, candles and vases. If you simply must paint in a dramatic shade, choose a single wall to adorn with shocking colour.

Fading Floors

Even if you didn’t upgrade your floors, it’s important to keep them in great condition. Laminate floors should not be washed with water, because it can leak through cracks and cause bubbling. Instead, sweep well and spot clean with a damp cloth. If you have hardwood, keep it in mint condition by cleaning and waxing regularly. If you plan to sell, a floor sand and refinish may be a good investment.

Too Much Bulk

You may not plan to live in a condo forever, and thus would rather invest in furniture that will make the transition from condo to house with ease – but big, bulky, house-size furniture just doesn’t compute in a small condo. Choose your stuff wisely, and don’t break the bank on condo furniture. There are bargains to be had, especially on small, streamlined stuff.

So long, historically low mortgage rates

Toronto-Dominion Bank and Royal Bank of Canada have raised their mortgage rates ahead of schedule, putting an early end to record-low rates.

The banks offered five-year mortgages at 2.99 per cent, specials that were a boon to home buyers and revealed increasing competitiveness among Canada’s big banks.

They debuted at a time when the housing market is poised to slow down and the Bank of Canada has been warning heavily indebted consumers to do the same.

TD raised its special four-year closed fixed rate mortgage by 40 basis points to 3.39 per cent, effective Wednesday.

Related: Lines of credit rates rising 

At the same time, it is introducing a special five-year closed fixed rate mortgage at 4.04 per cent.

The bank’s five-year closed mortgage now stands 10 basis points higher at 5.24 per cent.

TD had said it would offer the special rates until Feb. 29.

“Rates can go up and down depending on market conditions,” said TD spokesperson Tamar Nersesian. “While we’ve kept this offer available as long as we could, the new rate reflects rising bond yields and the subsequent increase in the cost of funds.”

Royal Bank of Canada made similar changes to its rates on Monday. The new rates also took effect Wednesday.

“Our long term funding costs have gone up considerably due to global economic concerns and while we have held off in passing on these rate changes to our clients, it is now necessary for us to increase this mortgage rate,” said Royal Bank spokesperson Matt Gierasimczuk.

Related: How to ensure you don’t buy the wrong house 

RBC cut its rate to 2.99 per cent in January in response to a similar cut from the Bank of Montreal, whose offer has since expired.

By Madhavi Acharya-Tom Yew