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Market Commentary

CMHC’s Canadian Housing Observer 2011 Report
January 10, 2012 @ 1:06 PM by:
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Although this report is substantially based on 2010 data, it is insightful and important points are made for making real estate decision moving forward.  CLICK HERE to review the full PDF report from CMHC.

Canadian Household Finance

  • During 2011 the Bank of Canada increased it’s lending rate by .75% from .25% to 1.0%
  • Residential mortgages grew to 1.042 Trillion as of March 2011.
  • In 2010 mortgages represented 68% of household debt. 
  • Household liabilities increased faster than assets and net worth during 2000-2010 period
  • Personal lines of credit have increased in popularity taking over for personal loans.
  • Most mortgage holders have substantial equity in their homes with 79% of home owners with greater than 25% equity (note that in US more than 25% of home owners had mortgages greater than the value of their homes).  
  • Trends in total household debt - Annual Growth rates of Total Household Debt:  1981-1990 10%, 1991-2000 6.0%, 2001-2010 9.4%. 
  • Household debt loads are considered to be currently manageable because of low interest rates, rising household income and net worth, and innovative financial products allowing for lower monthly payments.


Housing Markets and Demographics

  • Sales to listing ratio at the end of 2010 was 52.3% indicating a balanced market
  • The national apartment vacancy rate for major urban centers moved down to 2.9%
  • Economic recovery continued throughout 2010.  The real disposable income indicator (disposable income/consumption deflator) rose to 126 from a low of 75.  (This indicator had peaked in 2006 at 200). 
  • Canada’s Population grew faster over the past 3 years than in any other time since the early 1990’s
  • Saskatoon led CMA population growth from 2008 -2010 followed by Vancouver, Calgary, Regina, and Toronto and Edmonton.  Notably Kelowna also experienced high levels of immigration.
  • New immigrants tend to spend higher fractions of their incomes on shelter, with the number of new immigrants landing in Canada in 2010 reaching 271,000
  • Canada’s population of 65 and over will more than double by 2036.
  • One person households will become the largest type of household by the 2020s accounting for 28% of all households.
  • Average prices in 2010:  Vancouver $675K, Toronto $432K, Calgary $398K, Canada $339K, Montreal $297K, Saskatoon $296K.
  • Average monthly  rents in 2010:  Iqaluit $2265, Vancouver $1,185, Toronto $1,123, Calgary $1,069, Montreal $700,  Saskatoon $934


Credit Markets:

In February 2010 the Government of Canada announced changes to the standards governing mortgage back insured mortgages, which represented a tightening of credit standards.  These included higher qualifying interest rates, lower equity withdrawal limits, and larger down payment requirements for rental properties. 

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