CMHC has just published its quarterly report on real estate in Canada and Toronto. Below, I am quoting the Ontario section of the report to give you an idea on what's going on in the local market.
Overview Ontario
Despite uncertainty in the global economy, Ontario’s housing sector finished on a resilient note in 2011. Moving forward, Ontario housing starts should move closer to demographic demand. Housing activity will slow thanks to slowing growth in consumer discretionary spending, fewer first-time buyers and a modest pace of economic growth.
Ontario’s economy is tightly linked to that of the U.S., far more so than other Canadian provinces. Current leading indicators suggest the pace of U.S. economic growth will be very modest moving forward, which will temper growth in international exports. With exports accounting for over 50 per cent of Ontario’s GDP, job growth will moderate from 1.8 per cent in 2011 to 0.7 per cent in 2012 with a rebound to 1.6 per cent in 2013. Ontario consumers and the public sector will contribute less to economic growth due to slower employment and income growth and fiscal restraint. Ontario businesses will, however, drive spending, as recent business outlook surveys indicate strong investment intentions.
Approximately 75 per cent of Ontario population growth will be fuelled by stronger immigration levels over the course of the next few years. However, as Ontario’s economic and job prospects move lower than the Canadian average in the near term, migratory outflows to other provinces will rise and exert a moderating effect on net migration.
In Detail
Single Starts: Single-detached starts will slow to 23,200 units in 2012 before rising to 24,200 units in 2013. More expensive detached housing will remain sensitive to high levels of economic uncertainty and rising home prices. Land constraints will limit the growth in single-detached construction.
Multiple Starts: Multi-family home construction, led by the apartment sector, has captured a larger share of new home activity. This will likely continue into 2012 and 2013 with over 40,000 multi-family home starts expected in both years. Low primary rental apartment vacancy rates and modest purpose-built rental construction will support investment demand for apartment units.
Resales: The less expensive resale market will remain stable over the next few years averaging 195,000 unit sales, mirroring the performance over the past several years. Low interest rates prompted potential buyers to purchase homes very early during the recovery phase. Less pent-up demand and higher home prices will temper gains in resale home demand. MLS® resales are forecast to be 193,150 in 2012 and 197,850 in 2013.
Prices: Steady sales and higher home listings will move Ontario’s resale markets into balance. Local housing markets will be better supplied and prices will be growing below long-term rates of growth and more in line with the rate of inflation by 2012. The average MLS® price will be $374,300 for 2012 and $382,000 for 2013.
The full report can be found here:
http://www.cmhc-schl.gc.ca/odpub/esub/61500/61500_2012_Q01.pdf
