Charlottetown Housing Market to Return to More Stable Levels

CHARLOTTETOWN, May 19 /CNW/ - The outlook for the Charlottetown housing market points to a return to more stable levels, reports Canada Mortgage and Housing Corporation (CMHC) in its Housing Market Outlook - Charlottetown report which was released today.

"The local housing market has been performing above average since 2002, but is expected to return to more stable levels this year and next," said Ralph Freeze, market analyst with CMHC in Prince Edward Island. The most significant factor will be a reduction in multiple unit construction as apartment starts decline from last year's high levels. It is expected that single-detached construction in the capital region will increase slightly to 275 units in 2010 and remain at that level in 2011.

"Existing home sales are expected to decline this year and remain close to the ten year average," said Mr. Freeze. Expect to see 550 units sold in 2010, down from 595 sales in 2009. Despite the slight decline in unit sales for 2010, the average sale price will continue to advance at a moderate pace.

As Canada's national housing agency, CMHC draws on more than 60 years of experience to help Canadians access a variety of quality, environmentally sustainable and affordable homes. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making vital decisions.

For more information, visit www.cmhc.ca or call 1-800-668-2642.

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                               Forecast Summary
                               Charlottetown CA
                                 Spring 2010
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                  2007     2008     2009    2010f    % chg    2011f    % chg
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    Resale
     Market
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    MLS(R)
     Sales         650      595      575      550     -4.3      550      0.0
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    MLS(R) New
     Listings      817      975      786      940     19.6      900     -4.3
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    MLS(R)
     Average
     Price
     ($)       166,244  175,231  177,237  180,000      1.6  185,000      2.8
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    New Home
     Market
    -------------------------------------------------------------------------
    Starts:
      Single-
       Detached    295      280      268      275      2.6      275      0.0
    -------------------------------------------------------------------------
      Multiples     99      146      401      150    -62.6      175     16.7
    -------------------------------------------------------------------------
      Starts -
       Total       394      426      669      425    -36.5      450      5.9
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Average
     Price ($):
      Single-
       Deta-
       ched    192,477  207,361  242,674  250,000      3.0  255,000      2.0
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Median
     Price ($):
      Single-
       Deta-
       ched    180,000  200,000  210,000  216,300      3.0  222,800      3.0
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    New
     Housing
     Price
     Index
     (% chg.)      1.3      1.4      0.9      3.0        -      3.0        -
    -------------------------------------------------------------------------

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    Rental
     Market
    -------------------------------------------------------------------------
    October
     Vacancy
     Rate (%)      4.3      2.3      3.4      4.5      1.1      5.0      0.5
    -------------------------------------------------------------------------
    Two-
     bedroom
     Average
     Rent
     (October)
     ($)           659      672      701      720        -      735        -
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Economic
     Overview
    -------------------------------------------------------------------------
    Mortgage
     Rate
     (1 year)
     (%)          6.90     6.70     4.02     4.23        -     5.56        -
    -------------------------------------------------------------------------
    Mortgage
     Rate
     (5 year)
     (%)          7.07     7.06     5.63     6.20        -     7.06        -
    -------------------------------------------------------------------------
    Annual
     Employment
     Level
     (,000)     32,450   32,925   32,525   33,250      2.2   33,583      1.0
    -------------------------------------------------------------------------
    Employment
     Growth
     (%)           0.9      1.5     -1.2      2.2        -      1.0        -
    -------------------------------------------------------------------------
    Unemploy-
     ment Rate
     (%)           6.6      7.6      8.6      7.4        -      7.6        -
    -------------------------------------------------------------------------
    Net
     Migration
     (P.E.I.)      384      384    1,203    1,525     26.8      825    -45.9
    -------------------------------------------------------------------------

    MLS(R) is a registered trademark of the Canadian Real Estate Association
    (CREA).

    Source: CMHC (Starts and Completions Survey, Market Absorption Survey),
    adapted from Statistics Canada (CANSIM), CREA, Statistics Canada (CANSIM)

    NOTE: Rental universe = Privately initiated rental apartment
    structures of three units and over
    

For further information: Ralph Freeze, Market Analyst, Canada Mortgage and Housing Corporation, [phone], [email protected]