GTA Housing Market Outlook

Transcription

1 GTA Housing Market Outlook September 22, 2015 Optional Photo Housing market intelligence you can count on

2 76,387 89,255 88,214 88,157 91,760 88,946 90,000 93,278 93,400 Strong MLS Sales 100,000 Total MLS Sales 90,000 80,000 70,000 60, F 2016F MLS is a registered trademark of the Canadian Real Estate Association (CREA) Source: CREA, CMHC forecasts (F)

3 Home Price Growth to Continue $650,000 Average MLS Existing Home Price, GTA $600,000 $550,000 $500,000 $450,000 $400,000 $350,000 $300, F 2016F MLS is a registered trademark of the Canadian Real Estate Association (CREA) Source: CREA, CMHC forecasts (F)

4 Tight Resale Market Pushing up Prices 90% Sales-to-New Listings Ratio 80% 70% Seller s 60% 50% 40% 30% Balanced Buyer s 20% Source: CREA

5 Multi-family Units to Dominate Housing Starts 50,000 Apartment Semi-detached Row Single-detached 40,000 30,000 20,000 10, F 2016F Source: CMHC Starts & Completions Survey, CMHC forecasts (F)

6 Sales of Pre-Construction Units Trending Up 35,000 GTA New Home Sales, SAAR* six month moving average 30,000 25,000 20,000 15,000 10,000 5,000 Low Rise High Rise *SAAR Seasonally adjusted annualized rate Source: Realnet Inc., CMHC seasonal adjustment

7 Employment in Toronto Seeing Solid Growth 3,300 Total Employed (in Thousands) Seasonally Adjusted, Toronto CMA 3,200 3,100 3,000 2,900 2,800 2,700 2, Source: Statistics Canada

8 Unemployment Rate Down Significantly 11 Unemployment Rate (%), seasonally adjusted, Toronto CMA Source: Statistics Canada

9 GDP % chg $ Global Leading Indicators Signal Growth United States Japan Europe China Russia Source: Consensus Forecasts, IMF

10 Lower Commodity Prices A Drag on Growth in Prairies & Atlantic Commodity Price Index - US$ (2005=100) All Metals Energy Source: IMF Commodity Price Database

11 Canadian Dollar Very Supportive US per C$ Source: Statistics Canada

12 Motor Vehicle Exports Approaching Pre-Recession Highs 14,000 Exported value incurrent dollars ($thousands), seasonally adjusted 12,000 10,000 8,000 6,000 4,000 2,000 Energy products Motor vehicles and parts Source: Statistics Canada

13 Consumer Confidence Index, Ontario Retail Sales ($ Billions), Ontario Ontario Consumer Confidence Remains High $16.0 $15.5 $15.0 $14.5 $14.0 $13.5 $13.0 $ Source: Conference Board of Canada, Statistics Canada $12.0

14 No Sign of Household Balance Sheet Distress 28 Debt share of net worth (%), Canada % Source: Statistics Canada

15 Bank of Canada Lowers Target Rate 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Source: Bank of Canada 0.5%

16 Inflation Moving Back to Target 4.0 Year-over-year change in CPI (%), Canada Source: Bank of Canada

17 % Deviation from Potential GDP Output Gap Widened Downward pressure Source: Bank of Canada

18 Sales Growth Driven by Multi-family Dwellings 140 Index of Sales (2005=100) Singles Townhouses* Apartments Semis Source: Toronto Real Estate Board, CMHC calculations *Freehold and Condo

19 Low-rise Home Prices Outpacing Apartments 210 Index (Jan 2005=100) Single Townhouse Apartment Source: CREA HPI Index for MLS sales

20 Low-rise Supply at Record Lows Months of Inventory, Jul y Singles Row Condo Apartment Source: Toronto Real Estate Board, CMHC calculations

21 Condominium Apartments Remain the Affordable Choice $4,500 Avg. Monthly Carrying Costs $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 Condo Apartment, 5% down buyer Single-detached, 5% down buyer Assumptions: Toronto Real Estate Board (TREB) average single-detached and condominium apartment unit price. First Time Buyer uses the MAX AM (pre-2007, AM=40 Yr, pre 2008, AM=25 Yr, , AM=35, 2011, AM=30, 2012 and after, AM=25) and 5% down payment, and 5-yr lending rate for up to 2010M03. From 2010M04, uses the Chartered Bank conventional mortgage rate, 5-yr

22 Growing Long-Term Investor Activity Stock of Rental Condominiums 35% 30% 28.9% 25% 20% 19.6% 20.0% 15% 10% 5% 0% Source: CMHC Condo Vacancy Survey

23 Vacancy Rates to Stay Low Average Vacancy Rate Condo Apartment 4.0% Purpose Built Rental Apartment 3.0% 2.0% 1.0% 1.6% 1.3% 0.0% Source: CMHC Rental Market Survey,

24 Most Condo Investors Bought for Rental Income % Yes No Did not know or refused to answer Source: CMHC Condominium Owner Survey 2013 & 2014

25 ,000 25,000 Number of Starts Condos Help Fill Rental Market Supply Gap in Toronto Condominium Apartment Starts Rental Apartment Starts 20,000 15,000 12,862 10,000 5,000 1,799 0 Source: CMHC Starts & Completions Survey

26 Most Condo Investors in for the Long Haul % Less than 2 years 2-5 years More than 5 years Did not know or refused to answer Source: CMHC Condominium Owner Survey 2013 & 2014

27 Slower Price Appreciation for New Condos Average Price PSF ($), SA $ Source: Urbanation Inc., CMHC Seasonal adjustment

28 High Level of Condominiums Under Construction will Support Steady Pace of Completions Condominiums Under Construction 60,000 50,000 40,000 30,000 20,000 10,000 Completions Under Construction Completions 25,000 20,000 15,000 10,000 5, Source: CMHC Starts & Completions Survey

29 30,357 28,356 31,393 38,121 36,258 33,831 31,907 29,213 33,708...and In-line With Household Formation Number of Total Housing Completions 45,000 40,000 Average Household Formation 35,000 30,000 25,000 20,000 15,000 10,000 5, Source: Statistics Canada, CMHC

30 25% 20% 15% Demographic Support for High Rise Homes Baby Boomers Growth in Population Millennials 23.6% 15.8% 16.4% 10% 10.0% 7.7% 5% 2.7% 0% -5% -2.7% < Source: Statistics Canada, Census 2006 & 2011

31 Millions First-time Buyer Pipeline Strong 1.15 Projected Population by Age, GTA, Source: Ontario Ministry of Finance

32 International Migrants Biggest Driver of Population 160,000 Components of Population Growth, Toronto CMA 140, , ,000 80,000 60,000 40,000 20,000 Inter-prov Intra-prov Natural Increase Immigration Growth 0-20,000-40, Source: Statistics Canada

33 New Immigrant* Households by Housing Tenure Toronto CMA Rent, 61.6% Own, 38.4% Source: Statistics Canada (2011 National Household Survey) *Immigrated between

34 Forecast Summary SALES AVG. PRICE HOUSING STARTS EMPLOYMENT GROWTH AVG. WEEKLY EARNINGS GROWTH

35 Thank you/merci Questions?

36 Contact Information Andrew Scott Senior Market Analyst