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PRIYA SHARMA
Century 21 Signature Realty
#207, 2920 Calgary Trail NW, Edmonton, Alberta
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Wednesday, November 10, 2010 - CMHC forecasts 2011 will pick up after slow start

 

EDMONTON — “Modest,” “moderate,” “stable” were all words used to describe the Edmonton housing market in 2011 at a Canada Mortgage and Housing Corp. conference Tuesday.

No facet of the homes market — new, existing or rental — is expected to see dramatic gains or declines next year, according to the CMHC Housing Outlook.

Richard Goatcher, the federal agency’s senior market analyst for Edmonton, said that’s because economic indicators that drive housing demand — especially full-time employment and in-migration — have been so-so.

“For home-ownership demand, the real improvement is going to show up in 2012,” Goatcher said.

“For next year, we’ll see some modest gains in home-ownership demand, some declines in vacancy rate and that will start to put some modest upward pressure on rents that we haven’t seen for a while.”

While total housing starts across the Edmonton census metropolitan area will increase by 50 per cent over 2009 to about 10,000 units in 2010, starts are expected to remain stable in 2011.

A growing economy will spur demand for new homes, but that will be offset by higher prices, rising mortgage rates and abundant resale homes.

The CMHC forecasts single-

detached starts will reach 6,000 units this year for the first time since 2007. Next year, overall volumes will approach 2010 levels.

Multiple unit starts will reach about 3,500 this year, up significantly from 2009.

But in 2011, the CMHC says multi construction will remain flat as developers try reducing inventories and ramping up pre-sales to finance new projects.

Sales in Edmonton’s existing-home market are expected to finish 2010 down more than 10 per cent — the lowest total in more than five years.

The buyer’s market is expected to persist into early 2011, with total residential MLS sales up only a few percentage points from the previous year.

“We’re in a bit of a cooling trend right now. We’ve seen resale activity slow down, prices soften. Our view is it’s going to be spring before we see some improvements in market balance and some firming in prices that will bring some people off the fence,” Goatcher said.

For 2010, the average residential MLS resale price will rise slightly to about $330,000, driven by strong activity in the first few months of the year.

Prices softened later in 2010.

For next year, CMHC expects resale prices to rebound by the second quarter of 2011, if the current buyers’ market becomes more balanced in the spring.

But the annual residential MLS average resale price for 2011 will only slightly beat that of 2010, CMHC said.

For rental apartments, vacancy rates across greater Edmonton will fall in the second half of 2010 and next year as the economy grows.

CMHC said the vacancy rate for October 2010 is expected to be about four per cent, slightly lower than in October 2009.

By October 2011, vacancies will decrease to about 3.5 per cent.

CMHC expects its surveys will show rent for an average two-bedroom apartment for October 2010 will be $1,000, a $15-per-month decrease from the previous year.

By fall 2011, a typical two-bedroom unit will rent for close to $1,020, CMHC said.

While 2010 housing activity started strongly but slowed down, Goatcher says next year will start slowly but pick up. But in the end, 2011 will look very much like 2010.

“When we tally up numbers for the whole year, they’re not going to look substantially different,” he said.
 

posted in General at Wed, 10 Nov 2010 08:32:18 -0700



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