The following is a guest column by Ben Myers, Senior VP Market Research and Analytics at Fortress Real Developments. Fortress Real Developments partners with builders and developers across Canada and Ben assists in evaluating the market and projects that Fortress engages in.
I read as many housing forecasts as possible during this time of year, as I like to get a sense of what the top housing analysts are thinking and predicting for the year to come. When the media picks up on these reports I amuse myself by reading the online comments. If the forecast is in any way positive or bullish, the analyst or the organization is accused of being biased and protecting their financial interest. I wanted to give these commenters the chance to prove how unbiased they are, by conducting a poll in conjunction with BuzzBuzzHome. Prove to me that you’re smarter than a housing analyst!
Twice a year I put together a robust report on the state of the housing market in Canada and several of the major centres in which Fortress Real Developments has active projects. The next such report, called the Market Manuscript will include the BuzzBuzz forecasts beside those of the big banks and top private housing consultants.
Before you take the poll, here is a bit of context to help you with your picks. On average over the past 10 years (2004 to 2013), there were approximately 206,000 new construction starts in Canada and over the last five, there were 187,000 on average. There were 141,165 new housing starts in Canada through the first three quarters of 2014 according to the CMHC. Over the past 10 years the New Home Price Index published by Statistics Canada has shown an average annual increase of 3 per cent nationally. According to data from BuzzBuzzHome, Ontario new home prices increased by approximately 2.2 per cent in 2014, Alberta increased by 1.2 per cent, but British Columbia dropped in price by 2.0 per cent.
The Toronto Census Metropolitan Area (CMA) has averaged 37,000 housing starts over the past 10 years, 35,000 over the last five and there were just under 27,000 starts between January and November in 2014. The New Home Price Index in the Toronto CMA has mirrored Canada, increasing at an average rate of approximately 3 per cent since 2005. There has been a big discrepancy in the annual price changes (on a per-square-foot basis for new homes) by municipality based on BuzzBuzzHome data for 2013 and 2014, with the City of Toronto increasing 2.2 per cent year-over-year, Brampton increasing by 4.3 per cent, Richmond Hill by 9.7 per cent, Markham by 10.7 per cent, Pickering by 21.8 per cent and Burlington by 36.6 per cent!
The Calgary CMA has averaged 12,000 housing starts per year from 2004 to 2013, and 10,000 over the last five years. By comparison, there were already over 16,000 housing starts in the Calgary CMA through the first 11 months of 2014! The New Home Price Index in the Calgary CMA has increased by about 7.4 per cent annually over the past 10 years. According to per-square-foot data by BuzzBuzzHome, the City of Calgary saw new home prices increase 12.5 per cent annually in 2014, while prices in Airdrie were up 1.6 per cent over 2013.
So where are these markets headed in 2015? Let us know in the poll below:
Fortress Real Developments partners with builders and developers across Canada, and Ben assists in evaluating the market and projects that Fortress engages in (Twitter: @benmyers29). Follow his blog posts and commentary on the Canadian Housing Market at www.fortressrealdevelopments.com/news or for more info on real estate investing, go to www.fortressrealcapital.com.