Housing Outlook 2011
Although existing home sales in the fourth quarter of 2010 were down 19% year over year, the fact they were up 12.7% compared to Q3/2010 clearly suggests that Canada’s housing market was picking up strength in the final months of 2010.
Factors contributing to this improvement include strong growth of full time employment (+152,000 gain over the previous four months) plus an improvement in affordability stemming from a combination of lower mortgage rates and a significant slowdown in house prices.
Looking forward, the fundamental drivers of housing demand remain positive.
First, based on the most recent Bank of Canada Business Outlook Survey, the outlook for job growth over the next twelve months exhibited a healthy increase in the fourth quarter and now stands at its highest level since the fourth quarter of 2009.
Second, according to the most recent Royal Bank Housing Trends and Affordability Report, housing affordability improved in the third quarter due to lower mortgage rates and some softening in home prices.
Moreover, according to the report, further improvement in affordability is likely due to moderating house prices and rising incomes, despite the prospect for somewhat higher mortgage rates.
While the fundamentals of sustained growth of employment and positive affordability should underpin housing demand over the near term, the federal government’s recently announced plans to tighten mortgage lending rules by reducing the maximum amortization period on government insured mortgages from 35 to 30 years will probably put a drag on housing demand during the second half of the year.
Based on information reported in the November 2010 Annual State of the Residential Mortgage Market in Canada, prepared for the Canadian Association of Mortgage Professionals, this measure will primarily impact first time buyers since an estimated 30% of new mortgages issued over the past year had 35 year terms.
For 2010 as a whole, housing starts are expected to total 180,000 compared to an estimated 193,000 in 2010 and 149,000 in 2009.
Canada housing starts – all areas
Data Source: CMHC/Chart: Reed Construction Data, CanaData
Contributing Editor JOHN CLINKARD
Jared Dreyer, AMP
About Dreyer Group Smiles
Dreyer Group Smiles is a program dedicated to giving to facilities that provide safe and transitional housing to children and youth in the Fraser Valley of British Columbia. By providing funds to these programs, Dreyer Group will make a meaningful difference to kids who otherwise may not have a roof over their heads, or hope for a bright future.
Dreyer Group hopes to expand this effort through their clients and business partners. In addition, they plan to raise additional funds through annual events and corporate fundraising initiatives. Dreyer Group is working closely with the Salvation Army to allocate these funds to the children and shelters.
About Dreyer Group Mortgages, A Member of the VERICO Brokers Network
As a senior mortgage consulting team with extensive experience in the financial services industry and thousands of happy clients throughout the Lower Mainland, we understand what it takes to build long-term relationships through service and expertise. As an independent brokerage, we are not restricted to one financial institutions mortgage options. We provide the best range of financing solutions by accessing over 40 lenders and hundreds of products coast-to-coast.
Each VERICO member is an independently owned and operated business.
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12 Riches of Life:
1. A Positive Mental Attitude – purposefully think pleasant thoughts and these thoughts will exhibit “attraction power” that will draw good things into your life. For example, focus on finding that single perfect flower and when you do, buy it and display it on your table or desk for all to admire. Costs little, but pulls in positive vibrations.
2. Sound Physical Health – eat well, exercise daily, and move your body hourly for optimum results.
3. Harmony in Human Relations – talk less listen more. Condition yourself to consider another’s point of view.
4. Freedom From Fear – exchange your fears for faith and refuse to worry about something that you cannot control.
5. The Hope of Future Achievement – set simple goals and live up to your expectations. Start small and work up!
6. The Capacity for Faith – read faith based stories for inspiration, and seek out similar experiences in your own life.
7. Willingness to Share One’s Blessings – give from your current earnings, not only from your surplus.
8. A Labor of Love – do something that you enjoy for the PURE joy of doing it.
9. An Open Mind on All Subjects – challenge yourself to grow and exceed the space you now occupy in the world. Go beyond where you are and learn something new.
10. Self-Discipline – budget your time and money and create a daily plan for the maintenance of sound health. A little done each day adds up in a month’s time.
11. The Capacity to Understand People – school yourself in the nine basic motives that inspire people to do things. Next consider your primary and secondary motives – good or bad. You are where you are in life because of the actions you take.
12. Economic Security – plan for your financial security by saving a set portion of your weekly income. Never become someone’s servant or slave due to lack of personal finances.
When you acquire a “nose” for these twelve riches of life, you will truly be a blessing to yourself and others and also a success by the best ruler for measuring a life well lived. It’s been said that success by the yard is hard, but by the inch it’s a cinch.
Judy Williamson, Director Napoleon Hill World Learning Centre.