CMHC Fall Housing Outlook
Canada Mortgage and Housing Corporation has released their Fall 2006 Housing Market Outlook.
Highlights include: Housing Starts
- Forecast to rise 11% this year to 21,000 units driven by an increased supply in the Fraser Valley, and to ease off by 3% in 2007 making it still the third highest on record.
Building Costs
- Expected to rise at an annualized 10 to 12%. Coupled with relatively low inventory levels will see prices pushed up in 2007.
Resale Market
- Forecast to pull back by 8% this year to 37,900 units and move to a more balanced market in 2007.
Economic Outlook
- Economic growth is expected to remain strong both nationally and provincially with BC forecast to outperform at 3.5% GDP through 2007 and Vancouver at 4.0% GDP. Inflation is expected to remain within Bank of Canada target range of 1.0 -3.0%.
Labour Market
- Unemployment forecast to drop further to 4.4%. Wages and salaries forecast to grow.
Interest / Mortgage Rates
- With the Economy operating at or near capacity with a low inflation rate the expectation is for downward pressure on rates.
Immigration
- Net in-migration form the Rest Of Canada is expected to remain positive. International migration rates are forecast to remain strong at 32,000 people in 2007.
The Bottom Line
Vancouver Housing Demand will be supported by:
Robust Economic Growth
Increased Employment
Higher Wages
Strong Retail Sales
Positive Migration Trends
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