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TRENDS AT A GLANCE a CMHC 2012 report

Mortgage Rates

Short-term mortgage rates and variable mortgage rates are expected to remain near historically low levels. The outlook also assumes that mortgage rates will remain flat through most of 2012 and start increasing moderately in late 2012 or early 2013. This will continue to support housing demand.

Employment

In the 12 months to December 2011, employment grew by 1.2 per cent while the unemployment rate stood at 7.5 per cent. Over the December-to-December period, full-time employment rose by 1.5 per cent (+207,700), while part-time work declined 0.3 per cent (-8,600). Employment is forecast to grow by 1.3 per cent in 2012 and 2.0 per cent in 2013. These positive employment results will continue to support Canada’s housing sector.

Income

Growth in incomes is expected to continue, albeit at a moderate pace due to continued uncertainty in global economic markets. As a result, income will grow more modestly in 2012 and 2013. Despite this, growth in incomes will be supportive of housing demand.

Net Migration

Relative to other countries, Canada’s economy is expected to be a better performer. Canada is thus expected to attract more immigrants (net international migration), which will push net migration up. This will have a positive impact on housing demand in the medium to long term.

Natural Population

The low birth rate is the major factor in the slowing of growth in the natural population (births minus deaths). This will lessen the demand for additional housing stock in the medium and longer term.

Resale Market

Market conditions for most of 2012 and 2013 are expected to be balanced. Such market conditions will mean less spillover demand for new homes and more moderate housing starts compared to sellers’ market conditions.

Vacancy Rates

Moving forward, it is expected that there will continue to be modest purpose-built rental construction and strong rental demand due to high immigration. This, however, will be partly offset by an expanding rented condo market. As a result, vacancy rates across Canada’s metropolitan centres will remain relatively stable this year and next.