In-Migration to Support Housing Market

CHARLOTTETOWN, Nov. 2 /CNW/ - In-migration and low mortgage rates will lend strength to the housing market this year and next. Residential construction is expected to rebound in 2010 following declines in 2009, according to Canada Mortgage and Housing Corporation's (CMHC's) Housing Market Outlook released today.

"Single starts in Charlottetown are expected to record an increase in 2010, while multiple starts will slow slightly from the near record level of activity in 2009," said Jason Beaton , market analyst with CMHC in Prince Edward Island . Positive in-migration and low interest rates will be supportive of housing demand in both 2009 and 2010. As a result housing starts are expected to remain strong into 2010. Single-detached construction will reach 275 units in 2010, while multiples construction will slow to 240 units.

Existing home sales are expected to decline this year before rebounding slightly in 2010. Expect to see 550 units sell in 2009 and 575 units in 2010. The average price of an existing home is expected to climb to $186,000 by the end of next year.

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
                                  Fall 2009
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                    2006      2007      2008     2009f % chg     2010f  %chg
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    Resale Market
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    MLS(R) Sales     634       650       595       550  -7.6       575   4.5
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    MLS(R)
     New
     Listings        783       817       975       940  -3.6       900  -4.3
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    MLS(R)
     Average
     Price ($)   153,549   166,244   175,231   183,000   4.4   186,000   1.6
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    New Home Market
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    Starts:
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      Single-
       Detached      276       295       280       250 -10.7       275  10.0
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      Multiples      191        99       146       255  74.7       240  -5.9
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      Starts
       - Total       467       394       426       505  18.5       515   2.0
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    Average
     Price ($):
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      Single-
       Detached  186,774   192,477   207,361   213,000   2.7   217,000   1.9
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    Median
     Price ($):
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      Single-
       Detached  175,000   180,000   200,000   206,000   3.0   209,000   1.5
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    New Housing
     Price Index
     (% chg.)        2.2       1.3       1.4       3.0     -       3.0     -
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    Rental Market
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    October
     Vacancy
     Rate (%)        4.8       4.3       2.3       2.0  -0.3       2.2   0.2
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    Two-bedroom
     Average
     Rent
     (October) ($)   638       659       672       715     -       735     -
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    Economic Overview
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    Mortgage
     Rate
     (1 year) (%)   6.28      6.90      6.70      4.03     -      3.83     -
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    Mortgage
     Rate
     (5 year) (%)   6.66      7.07      7.06      5.55     -      5.75     -
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    Annual
     Employ-
     ment
     Level
     (,000)       32,175    32,450    32,925    32,500  -1.3    32,825  1.00
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    Employment
     Growth (%)      1.8       0.9       1.5       1.0     -       1.0     -
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    Unemployment
     Rate (%)        7.6       6.6       7.6       7.4     -       7.6     -
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    Net
     Migration
     (P.E.I.)       -111       384     1,203     1,525  26.8       825 -45.9
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    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: Jason Beaton, Market Analyst, Canada Mortgage and Housing Corporation, [phone], [email protected]