CMHC has come out with their housing outlook for 2010 (you can see it here).
In a nutshell they say housing activity and prices will pick up next year as demand grows. The average listed price will increase to $312,950 this year and rise further to $324,500 in 2010, with British Columbia continuing as the most expensive place to live. The average MLS home price in BC will increase modestly from $452,000 in 2009 to $460,000 in 2010 (a price point that includes apartments and condos).
A forecast for continued growth - what a surprise.
Of course this is the group that, at the start of 2008 never saw any downturn in the market despite all the havoc happening in the United States (see 2008's first quarter report here).
Now we can cut them some slack for 2008. The entire government had their head in the sand at the start of the year as Harper, Flaherty et al were saying that, despite what was happening in the US, no recession was coming to Canada and absolutely no deficit would be incurred. The Bank of Canada was repeating those themes.
But this year... this year we have the Governor of Canada threatening to intervene in the real estate market and "influence financial institutions that issue mortgages, both through regulation and pressure, including the ability to change the terms of mortgage insurance."
You get the impression that, in the CHMC world, there is never an outlook that isn't sunshine, lollipops and rainbows.
In a follow up to our new Sunday Feature for November previewing what is to come in our real estate market by looking at the current California experience (see here), there was this piece by Bloomberg today titled Real Estate Price Plunge Makes U.S. Homeownership Perilous Path
- Kajal and Vishal Dharod paid $559,000 in 2006 for a new four-bedroom house built in Rancho Cucamonga, California. Today, it’s worth about $360,000.
“We don’t know how we can come back from a loss like that,” said Kajal Dharod, 29, a first-time homeowner with a $4,200-a-month mortgage. “Buying the house was a mistake.”
American homeownership, once considered a path to wealth, is now leading to disillusionment.
“Buying the house was a mistake.” Remember that phrase, it will become the catchphrase for everyone who bought in 2009 when it comes time to renew those mortgages in 2014.
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