condo network october 30 2009
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TREB Housing Market Update
The Condo Network
October 30, 2009
Jason MercerSenior Manager of Market Analysis
Toronto Real Estate Board
Low Rates Have Had The Desired Effect
0%
1%
2%
3%
4%
5%
6%
Source: Bank of Canada
Bank of CanadaTarget for the Overnight Lending Rate
Low Rates Have Had The Desired Effect
2%
7%
12%
17%
22%
Source: Statistics Canada
Average 5-Year Fixed Mortgage Rate
GTA Housing Has Remained Affordable
20%
25%
30%
35%
40%
45%
50%
55%
Source: Toronto Real Estate Board Data and Calculation; Statistics Canada
TREB Affordability IndicatorShare of Average Household Income Used for Mortgage Principal and Interest, Property Taxes and Utilities on the Averaged Priced GTA Resale Home
2010 Sales Will Remain Strong
10,000
15,000
20,000
25,000
30,000
35,000
Source: Toronto Real Estate Board
TREB MLS® Sales Projection: 2010
90-Per Cent Confidence Interval
50-Per Cent Confidence Interval
Condo Share of Sales is Increasing
20 Per cent 1999 Condo Apartment Share of MLS®
24 Per cent 2008 Condo Apartment Share of MLS®
Geography of Condo Sales
Geography of Condo Sales
New Listings Will Grow in 2010
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
Source: Toronto Real Estate Board
TREB MLS® New Listings Projection: 2010
90-Per Cent Confidence Interval
50-Per Cent Confidence Interval
0
200
400
600
800
1,000
1,200
1,400
Source: CMHC; TREB Adjustment
Toronto CMA Condominium Apartment Completions(12-Month Moving Average)
…Especially for Condos
More Condo Completions in 2010
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Source: CMHC
Toronto CMA Condominium ApartmentsUnder Construction
More Balanced Market in 2010
-20%
-10%
0%
10%
20%
30%
30%
40%
50%
60%
70%
80% Ave
rage A
nn
ual P
rice G
row
thSale
s-to
-Ne
w L
isti
ngs
Rat
io
Source: Toronto Real Estate Board
TREB MLS® Sales-to-New Listings Ratio/Price Growth Projection
Sales-to-New Listings Ratio (Left Scale)
Average Annual Price Growth (Right Scale)
Average Price Growth Will Be Positive in 2010
325,000
350,000
375,000
400,000
425,000
450,000
475,000
Source: Toronto Real Estate Board
TREB MLS® Average Price Projection: 201090-Per Cent Confidence Interval
50-Per Cent Confidence Interval
Geography of Condo Price
$0 $100 $200 $300 $400 $500 $600 $700
C09C12C02N12C03C10E01E02C01
W02
W10W24W04E12E17E10
W18W05E11N17
Thousands of Dollars
Top 10 and Bottem 10 Average Condo Apartment Prices
Geography of Condo Price
-40% -20% 0% 20% 40% 60%
W13
N08
C11
E14
E06
N18
N11
W18
C12
W22
N06
N07
C10
C09
W29
W21
E16
E12
W16
E02
Top 10 and Bottem 10 Average Condo Apartment Prices
Condo Share of Total GTA Rental Stock
Purpose-Built Rental, 88%
Condominium Rental, 12%
GTA Rental Apartment Stock Shares
Source: CMHC
Condo Rental Stock Up; Average Rent Down
32 Per Cent Rental Transactions
May-Aug. 2009
51 Per Cent Rental ListingsMay-Aug. 2009
One Per Cent Rental Transactions
May-Aug. 2009
Wrap-Up
Leading Indicators: The Road to Recovery
Historic interest rate cuts have provided stimulus. Average GDP growth likely by end of 2010.
Low rates initially prompted a recovery in big-ticket consumer spending on homes and cars.
X Still waiting on stronger US demand leading to increased exports, especially auto-related
Broader retail spending has improved as well, pointing to stronger consumer confidence.
Wrap-Up
GDP and Lagging Indicators: Sustainable Growth?
June GDP release starting to confirm consensus view that Q3 will experience economic growth
The unemployment rate will be volatile and could get worse before it gets better. Should start to see job market recovery in second half of 2010.
If the Bank of Canada is correct about inflation, we should see orderly, incremental rate increases.?
?
? Value of Canadian dollar now more of a concern. Bank of Canada has “pushed forward” outlook.
Accessing TREB Economic Commentaries
Accessing TREB Economic Commentaries
Accessing TREB Economic Commentaries
QUESTIONS?