treb housing outlook 2010
DESCRIPTION
TRANSCRIPT
2010 Member Forums
Housing Market Outlook
Jason MercerSenior Manager, Market Analysis
Part 1: Resale Market Outlook
Part 2: Resale Market Breakdown
Part 3: New Home Market
Part4: Rental Market
Part 5: TREB Member Resources
Immigration!Drives!Population!Growth
GTA!Most!Diverse!Metropolitan!Area!in!the!World
0% 10% 20% 30% 40% 50%
Washington!DC
Montreal
New!York!City
Melbourne
Sydney
Los!Angeles
Miami
Vancouver
Toronto
Source:!Adapted!from!Statistics!Canada,! 2006!Census!Analysis! Series
Share!of!Foreign"Born!Populationin!Major!Metropolitan!Areas
Sustained!Population!Growth!is!Projected
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
Source:!Statistics! Canada,!Ontario!Ministry!of!Finance!Projection
Toronto!CMA!PopulationHistoric!and!Projected
Historic!Toronto!CMA!Population
Projected!Toronto!CMA!Publication
MLS® Sales!Will!Follow!Population!Trend!– Long!Term
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
Source:!Statistics! Canada,!Ontario!Ministry!of!Finance!Projection
GTA!MLS®!SalesHistoric!and!Projected
Actual!Existing!Home!Sales
Historic!Trend
Long"Term!Sales!Projection
Affordability!Improved!Markedly!in!2009,!but…
25%
30%
35%
40%
45%
50%
55%
Source:!Toronto!Real!Estate!Board!Data!and!Calculation;! Statistics!Canada
TREB!Affordability!Indicator!Share!of!Average!Household! Income!Used!for!Mortgage!Principal! and! Interest,!Property!Taxes!and!Utilities!on!the!Average!Priced!GTA!Resale!Home
…the!Cost!of!Home!Ownership!will!Rise!in!2010
25%
30%
35%
40%
45%
50%
55%
Source:!Toronto!Real!Estate!Board!Data!and!Calculation;! Statistics!Canada
TREB!Affordability!Indicator!Share!of!Average!Household! Income!Used!for!Mortgage!Principal! and! Interest,!Property!Taxes!and!Utilities!on!the!Average!Priced!GTA!Resale!Home
MLS® Sales!Remaining!Strong!but!Edging!Lower
20%30%40%50%60%70%80%90%100%
50,000
70,000
90,000
110,000
130,000
150,000
170,000
190,000
Sales"to"New
!Listings!RatioSales/Listings!Trend
!(Ann
ualized
)
Source:!Toronto!Real!Estate!Board
TREB!MLS®!Annualized!Sales/Listings!Trend:!Historic!&!Forecast
MLS!Sales
More!Home!Owners!Will!List!
20%30%40%50%60%70%80%90%100%
50,000
70,000
90,000
110,000
130,000
150,000
170,000
190,000
Sales"to"New
!Listings!RatioSales/Listings!Trend
!(Ann
ualized
)
Source:!Toronto!Real!Estate!Board
TREB!MLS®!Annualized!Sales/Listings!Trend:!Historic!&!Forecast
MLS!Sales
MLS!New!Listings
Market!Conditions!Not!as!Tight!in!2010
20%30%40%50%60%70%80%90%100%
50,000
70,000
90,000
110,000
130,000
150,000
170,000
190,000
Sales"to"New
!Listings!RatioSales/Listings!Trend
!(Ann
ualized
)
Source:!Toronto!Real!Estate!Board
TREB!MLS®!Annualized!Sales/Listings!Trend:!Historic!&!Forecast
MLS!SalesMLS!New!ListingsSales"to"New!Listings!Ratio
Market!Tightness!Correlates!With!Price!Growth
"10%
"5%
0%
5%
10%
15%
20%
20%
30%
40%
50%
60%
70%
80% Annual!A
verage!Price!ChangeSales"to"New
!Listings!Ratio
Source:!Toronto!Real!Estate!Board
Sales"to"New"Listings!Ratio!vs.!Average!Annual!Price!Change
Sales"to"New!Listings!Ratio!(Left!Axis)
Annual!Average!Price!Change!(Right!Axis)
After!Very!Strong!Price!Growth!in!2009…
200,000
250,000
300,000
350,000
400,000
450,000
Source:!Toronto!Real!Estate!Board
TREB!MLS®!Average!Price!Trend:!Historic!&!Forecast
…the!Average!Price!Trend!Will!Flatten
200,000
250,000
300,000
350,000
400,000
450,000
Source:!Toronto!Real!Estate!Board
TREB!MLS®!Average!Price!Trend:!Historic!&!Forecast
Components!of!Affordability
Average Price +7%
Economic!Recovery!is!Underway!in!Canada
"1.2%
"0.8%
"0.4%
0.0%
0.4%
0.8%
Source:!Statistics!Canada
Canadian!Real!GDP,!MonthlyMonth"Over"Month!Per!Cent!Change
GDP!Growth!Will!Continue!in!2010
"8%
"6%
"4%
"2%
0%
2%
4%
6%
Source:!Statistics!Canada;!Bank!of!Canada!Baseline!Forecast
Canadian!Real!GDP,!QuarterlyAnnualized!Quarter"Over"Quarter!Per!Cent!Change
Components!of!GDP!Growth
"8%
"6%
"4%
"2%
0%
2%
4%
6%
Source:!Statistics!Canada;!Bank!of!Canada!Baseline!Forecast
Canadian!Real!GDP,!QuarterlyAnnualized!Quarter"Over"Quarter!Per!Cent!Change
FACT:!More!than!60!per!cent!of!Canadian!GDP!is!accounted!for!by!personal!expenditure
Consumer!Price!Growth!Moving!Toward!BoC!Target
"2%
"1%
0%
1%
2%
3%
4%
Source:!Statistics!Canada
Canadian!Consumer!Price!Index!(CPI)Year"Over"Year!Per!Cent!Change
CPI!Annual!Per!Cent!Change
Core!CPI!(Bank!of!Canada)!Annual!Per!Cent!Change
Bank!of!Canada!Will!Increase!the!Overnight!Rate
0%
1%
2%
3%
4%
5%
6%
Source:!Bank!of!Canada
Bank!of!CanadaTarget!for!the!Overnight!Lending!Rate
Slope!of!Yield!Curve!Changing
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
Bill/Bon
d!Yield
Source:!Bank!of!Canada;! TREB! Forward!Rate!Calculations
Canadian!Government!of!Canada!Bill/Bond!Yield!CurveSpot!and!Derived!Forward!Rates
Spot
December!2010!Forward!Curve
Variable!and!Fixed!Mortgage!Rates!Will!Increase!Disproportionately
0123456789
Jan"00
Jul"0
0
Jan"01
Jul"0
1
Jan"02
Jul"0
2
Jan"03
Jul"0
3
Jan"04
Jul"0
4
Jan"05
Jul"0
5
Jan"06
Jul"0
6
Jan"07
Jul"0
7
Jan"08
Jul"0
8
Jan"09
Jul"0
9
Jan"10
Jul"1
0
Per!C
ent
Source:!Bank!of!Canada;! TREB! Forecast
Prime!Rate!and!5"Year!Fixed!Mortgage!RateHistoric!and!2010!Forecast
Average!5"Year!Fixed!Mortgage!RatePrime!Rate
Rates!Will!Still!Be!Very,!Very!Low!Historically
2%
7%
12%
17%
22%
Source:!Statistics! Canada;! TREB! Forecast
Average!5"Year!Fixed!Mortgage!Rate:!Historic!&!Forecast
Components!of!Affordability
Average Price +7%
Components!of!Affordability
Average Price +7%
Mortgage Rates
Up
GTA!Employment!Will!Start!to!Improve!in!2010
"2%
"1%
0%
1%
2%
3%
4%
2,650
2,700
2,750
2,800
2,850
2,900
2,950 Employm
ent!Annual!Per!cent!Change
Actual!Employmen
t!(,0
00s)
Source:!Statistics! Canada,! TREB! Forecast
Toronto!CMA!EmploymentActual!and!Annual!Per!Cent!Change
Annual!Per!Cent!Change!(Right!Scale)
Actual!Employment! (Left!Scale)
GTA!Unemployment!Will!Be!Above!Average!in!2010
5%
6%
7%
8%
9%
10%
11%
Source:!Statistics!Canada;! TREB! Forecast
Toronto!CMA!Unemployment!Rate(Seasonally!Adjusted!Trend)
Earnings!Trend!Will!Remain!Flat
$740
$760
$780
$800
$820
$840
$860
$880
Source:!Statistics! Canada;! TREB! Forecast
Toronto!CMA!Average!Weekly!Earnings
Household!Income!In!Line!with!2010
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
Source:!Statistics!Canada;! TREB! Estimates!and!Forecast
Toronto!CMA!Average!Household!Income
Components!of!Affordability
Average Price +7%
Mortgage Rates
Up
Components!of!Affordability
Average Price +7%
Hhld Income
Flat
Mortgage Rates
Up
Components!of!Affordability
Average Price +7%
Hhld Income
Flat
Mortgage Rates
Up
Taxes&
UtilitiesUp
The!Average!Home!Will!Be!Affordable!in!2010
25%
30%
35%
40%
45%
50%
55%
Source:!Toronto!Real!Estate!Board!Data!and!Calculation;! Statistics!Canada
TREB!Affordability!Indicator!Share!of!Average!Household! Income!Used!for!Mortgage!Principal! and! Interest,!Property!Taxes!and!Utilities!on!the!Average!Priced!GTA!Resale!Home
The!Average!Home!Will!Be!Affordable!in!2010
25%
30%
35%
40%
45%
50%
55%
Source:!Toronto!Real!Estate!Board!Data!and!Calculation;! Statistics!Canada
TREB!Affordability!Indicator!Share!of!Average!Household! Income!Used!for!Mortgage!Principal! and! Interest,!Property!Taxes!and!Utilities!on!the!Average!Priced!GTA!Resale!Home
Part 1: Resale Market Outlook
Part 2: Resale Market Breakdown
Part 3: New Home Market
Part4: Rental Market
Part 5: TREB Member Resources
Share!of!Condominium!Apartment!Sales
19%
20%
21%
22%
23%
24%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009Source:!TREB
High"Rise!Share!of!Total!MLS®!Sales
Resale!Condo!Apartment!Affordability
Resale!Condo!Apartment!Affordability
Resale!Condo!Apartment!Affordability
Resale!Single"Detached!Affordability
Resale!Single"Detached!Affordability
Resale!Single"Detached!Affordability
Part 1: Resale Market Outlook
Part 2: Resale Market Breakdown
Part 3: New Home Market
Part4: Rental Market
Part 5: TREB Member Resources
New!Home!Sales!Follow!Resale!Market
"100%
"50%
0%
50%
100%
150%
200%
Jan"07
Mar"07
May"07
Jul"0
7
Sep"07
Nov"07
Jan"08
Mar"08
May"08
Jul"0
8
Sep"08
Nov"08
Jan"09
Mar"09
May"09
Jul"0
9
Sep"09
Nov"09
Source:!Toronto!Real!Estate!Board;!RealNet!Canada! Inc.
GTA!MLS®!and!New!Home!Sales:!Annual!Growth/Decline
MLS!Sales!(Annual!Per!cent!Change)
New!Home!Sales!(Annual!Per!Cent!Change)
Check!Out!RealNet!Portal
Builders!Are!Cooperating!With!REALTORS®
Builders!Are!Cooperating!With!REALTORS®
Builders!Are!Cooperating!With!REALTORS®
New!Low"Rise!Available!For!Sale
North:(2,805)!39%
East:2,370!(33%)
West:1,982!(27%)
Central:75!(1%)
Remaining!New!Low"Rise!InventoryTotal:!7,232!(Dec.31/09)
New!High"Rise!Available!For!Sale
Central:!6,571!(46%)
West:!4,440!(31%)
East:1,581!(11%)
North:1,752!(12%)
Remaining!New!High"Rise!InventoryTotal:!14,344!(Dec.31/09)
Condominium!Apartment!Construction!Trends
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009Source:!CMHC
Condominium!Apartment!Completions!and!Units!Under!Construction
Completions
Average!Number!of!Units!Under!Construction
Part 1: Resale Market Outlook
Part 2: Resale Market Breakdown
Part 3: New Home Market
Part4: Rental Market
Part 5: TREB Member Resources
Historic!Condominium!Apartment!Vacancies
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
1.6%
Source:!CMHC
GTA!Rental!Condominium!Apartment!Vacancy!Rate
Purpose"Built!Vs.!Condo!Apartment!Vacancies
0%
1%
2%
3%
4%
5%
Halton Peel Toronto York DurhamSource:!CMHC
Rental!Vacancy!Rates:Purpose"Built!vs.!Condominium!Apartments
Condo!Apartment!Vacancy!Rate
Purpose"Built!Rental!Vacancy!Rate
Part 1: Resale Market Outlook
Part 2: Resale Market Breakdown
Part 3: New Home Market
Part4: Rental Market
Part 5: TREB Member Resources
TREB!Housing!Market!Charts
TREB!Housing!Market!Charts
TREB!Housing!Market!Charts
TREB!Housing!Market!Charts
TREB!Economic!Commentaries
TREB!Economic!Commentaries
TREB!Economic!Commentaries
Thank You!
Any Questions?
What’s on the Radar?! Social Media! New Home Page! Neighbourhood
Designations! President’s FAQs on
TMLS! Member Forums! Name Change
Awareness! Competition
Settlement/Litigation
! Increased RECO Advocacy
! Electronic Signatures! Buyer Representation
Ad Campaign! Increased
Representation at OREA
! Sample PSC and DIS cases
! Increased Election participation
! Possible Bar Coding solution