BuzzBuzzHome Corp.
February 9, 2010

The question of whether we are in a housing bubble continues to get harder and harder to answer. Lots of new numbers out this week, showing a stabilizing market, but there continues to be a plethora of talk about the potential bubble that is building.

The Canadian Real Estate Association is forecasting resales for homes will set a record in 2010, largely driven by activity in the first six months of this year.

The resale housing market is expected to reach 527,300 units this year, up 13.3 per cent from 2009. This would be a new annual record, up 1.2 per cent above the previous peak in 2007, says CREA said on Monday.

“You are not hearing about a lot of speculative buying,” Greg Klump, the national real estate organization’s chief economist, “Nor is there a lot of speculative building.”

Low interest rates and buyers wishing to avoid the harmonized sales tax before it comes into effect in Ontario and British Columbia will help fuel resales in the first half of this year, he said. In the second half of 2010, sales are expected to be lower as interest rates are expected to increase marginally, Klump said.

Canadian housing starts rose roughly in line with estimates in January, Canada Mortgage and Housing Corp (CMHC) data showed Monday, suggesting further stabilization of the nation’s housing market. The seasonally adjusted annual rate of housing starts reached 186,300 units in January 2010. This is an increase from an annual rate of 176,100 units in December 2009. CMHC reported actual housing starts for 2009 totalled 149,081 units, with activity improving as the year progressed.

The CMHC said urban starts increased 4.4 per cent to 165,200 in January. Urban multiple starts rose 5.7 per cent to 76,300, while single urban starts increased 3.3 per cent to 88,900.

Yikes! So many numbers to review!

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