Where are Housing Markets Headed?
Canada Mortgage and Housing Corporation
Karen Kinsley, President and Chief Executive Officer
Over the years, I have had the pleasure of attending a number of CHBA events. In talking with local builders, the question I am most often asked is, “Where are housing markets headed?”
The housing sector has been a source of strength and stability over the past couple of years, and helped lead Canada out of the global economic downturn. Although the recovery is fragile, Canada—and the housing industry in particular—have emerged from the downturn in better shape than most.
At CMHC, we believe the outlook for housing remains positive. Housing starts have been strong in the past few months, and CMHC is forecasting another solid year for home builders in 2012.
Builders and consumers will continue to be supported by Canada’s strong housing finance system. Prudent lending practices and a robust home building industry have served this country well, and will continue to do so going forward.

Balanced Housing Market Brings Stability in 2012
Genworth Financial Canada
Brian Hurley, Chairman, Chief Executive Officer
We are not out of the woods yet when it comes to the economy, but we are seeing some positive economic indicators that support a balanced environment in the housing sector. Normalizing supply and demand, flat home prices and low interest rates through 2012 will help affordability. As a result, we expect the first-time home buyer market to remain stable and anticipate modest growth in new suburban developments across Canada in 2012.
Our highly disciplined banking system—one that enforces prudency and maintains rigorous underwriting standards—has served this market well. Underlying this regulatory environment is a network of builders, lenders and insurers who work together to meet demand and drive smart homeownership decisions. Builders are a critical component of this process. Their unique understanding of local demographics and global economic issues enables them to adapt to market conditions. That’s why we, at Genworth, believe it’s important to partner with and support the builder community as we continue to help Canadians responsibly achieve the dream of homeownership.

Housing Market to Cool but Avoid Freeze
The Conference Board of Canada
Julie Ades, Economist
The Canadian housing market is expected to stay cool heading into 2012 because of high household indebtedness, slower growth in real disposable income, and the tightening of mortgage rules. The psyche of consumers in general is also affecting home buyers.  Influenced by the economic uncertainty in the United States and Europe, Canadian consumers have sent The Conference Board of Canada’s Index of Consumer Confidence into decline much of the year.
The combination of slowing income growth and consumer caution about making major purchases should lead to slower growth in home prices in 2012. Also, the average resale home price rose significantly during the first half of 2011, although it was skewed by an increased share of sales in high-end Vancouver neighbourhoods. This shift in the types of Vancouver properties being sold is levelling off, which could translate into slower growth in the national average price next year.
However, ongoing low interest rates and steady projected gains in employment over the next two years should sustain overall housing demand in the medium term. The resulting price growth—although moderate —will give builders the incentive to start 186,000 units in 2012, the same level as is expected in 2011. As economic growth builds in 2013 and demand for housing grows to keep up with demographic changes, more than 200,000 dwellings are forecast to be built that year.

Challenging “Sprawl” Rhetoric
Altus Group Economic Consulting
Robert Feldgaier, Senior Director
“Urban sprawl” has been the subject of much rhetoric and debate in recent years, but rarely are claims about urban sprawl supported by solid evidence or put in proper context.
The lack of a common definition is a challenge. The Oxford Dictionary defines it as “the uncontrolled expansion of urban areas.” Given the highly regulated planning regimes in most of the country, it is a stretch to argue that expansion of urban areas in most of urban Canada is uncontrolled.
Anti-sprawl policy advocates point to the effectiveness of recent policies, such as the Ontario’s Growth Plan, that aim to curb the expansion of urban boundaries. But evidence shows that higher density development is happening across Canada regardless of the policy environment. A shift in ground-related housing preferences from single-detached to semis and rows, demand for generally smaller lots, as well as the growing popularity of apartments is naturally placing upward pressure on densities.
A market or demographic shift is one thing, a heavy-handed policy is another. Opponents of residential development proposals should be challenged to provide solid supporting evidence of public good. Governments that are considering restrictions and regulations to curb urban sprawl should investigate thoroughly what is really happening on the ground in their jurisdictions before taking action that may be detrimental to the housing market and local economy.