John Pasalis in Toronto Real Estate News
The Canadian Mortgage and Housing Corporation anticipates a more balanced real estate market in Toronto for 2009 with sales expected to drop and prices expected to see modest increases. A couple of the factors driving the slowdown in sales include a decline in employment and wage growth in the year ahead. The inflation rate is also expected to drop to roughly 1.4% next year offering consumers some relief.
The CMHC is forecasting sales in the Greater Toronto Area to decline by roughly 8.5% in 2009 to 75,000. The following chart shows the annual sales volume in the GTA including forecasts for 2008 and 2009.
Despite the decline in sales, the CMHC does not anticipate any decline in prices for Toronto in 2009. They are forecasting a modest 1.8% increase in prices next year. The following chart shows the annual percentage change in prices since 1989.
As I’ve mentioned in previous posts, economic forecasts are as much art as they are science and for that reason we need to take them with a grain of salt. There are a lot of different opinions on the outlook for Canada’s real estate market. Merrill Lynch’s David Wolf is probably the most pessimistic economist covering Canada’s real estate market whereas the CMHC is home to some of the more optimistic economists. I tend to lean towards the economists in the middle who are forecasting moderate price declines for 2009.
John Pasalis is a sales associate at Prudential Properties Plus in Toronto and a founder of Realosophy. Email John
The only thing I would add is that both parties have an interest in viewing the positive side, yet Wolf does not maintain one and actually backs his analysis up with macro and microeconomics, whereas the CMHC feebly hides behind 'all real estate is local' -- why?
He's been the subject of a lot of criticism for his bearish views by the bulls - the PR equivalent of muzzling you might say. As if a technical recession weren't enough ...
Posted by: Rob | December 01, 2008 at 06:53 PM
Classic Toronto mentality.
Wait until all of the 2009 layoffs come into effect, and hit the GTA hard.
Prices will fall, everyone needs to just accept it. This is one of the worst economic downturns in recent history (66,000 jobs lost last month in ONTARIO alone). These predictions that Toronto housing will somehow fair better than the rest of the country are just hilarious to read.
Posted by: Ryan | December 08, 2008 at 01:32 PM
Modest Growth in 2009, CMHC says = Dream on for the next 5 years.
I do agree with Ryan comment, my understand is, these type of article is, to boost moral but not realism . the percentage of people own their houses verses ones they pay mortgage and need to have job to pay the mortgage is high, so when mortgage paying house owners start leaving their houses, you will see the reality of the market in 2009-11
Posted by: sean | January 10, 2009 at 11:05 AM