Guelph CA

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Guelph CA

• Housing Market Overview

January 10, 2007 Guelph Real Estate Pulse
Conference
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Presentation Outline
Mortgage Rates
Jobs
People
Housing Demand
Consumer Confidence
Resale Home Market
New Home Market
Rental Market
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Oil Prices Canadian High
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Moderate Economic Growth in 2007
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Inflation Remains Subdued
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Mortgage Rates will Remain Low
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Job Growth Slows
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Manufacturing Sector Rebounds
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Consumers are Upbeat
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Guelph Attracts Migrants
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People Moving From the GTA
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What does 300,000 buy?
Mississauga
Guelph
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Presentation Outline
Mortgage Rates
Jobs
People
Housing Demand
Consumer Confidence
Resale Home Market
New Home Market
Rental Market
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Half of Intending Home Buyers Will Have a High
Ratio Mortgage
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High Ratio Mortgages More Popular with Younger
Home Buyers
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High Ratio Mortgages Most Common with
Less-Expensive Home Purchases
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Toronto Home Buyer Intentions are in Line with
Average
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First-Time Buyer Pool Shrinking
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Pre-Owned Homes Most Popular Choice
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Single-Detached Homes Most Popular Choice
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Theoretical Housing Cycle
Peak
Maturing Phase
Mature Peak
Contraction (Slowdown)
Expansion (Boom)
Trough
Trough
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Buyers Market

• Supply exceeds demand/days to sell rising (75-100
  days)
• Sales /new listings lt 0.35
• Sales /active listings lt 0.20
• Prices declining
• High risk

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Balanced Market

• Supply balances demand/days to sell stable (60-75
  days)
• Sales/new listings 0.35 - 0.55
• Sales/active listings 0.20 - 0.32
• Prices stable
• Moderate risk

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Sellers Market

• demand exceeds supply/days to sell falls (30-60
  days)
• shortage of product
• sales/new listings 0.55 - 0.75
• sales/active listings 0.32 - 0.40
• prices rising
• low risk

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Overheated Market

• many buyers few vendors/days to sell low (days)
• extreme product shortages
• bidding wars
• speculation
• sales/new listings consistently gt 0.75
• sales/active listings consistently gt 0.40
• prices unsustainable/volatile
• high risk

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Strong Ontario Resale Home Market
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Guelph Home Sales Record in 2005
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Sales Plateau at High Level
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More Choice For Buyers
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Guelphs Resale Market Closer to Balancedless
upward pressure on home prices
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Guelph Home Prices at Record Highs
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But Remain Affordable
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Strong Equity GainsGuelph Home Prices up more
than 50 since 98
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Guelphs Home Priceonly slightly higher than
neighbouring centres
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Strong Price Growth in Most Areas
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Presentation Outline
Mortgage Rates
Jobs
People
Housing Demand
Consumer Confidence
Resale Home Market
New Home Market
Rental Market
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Strong Ontario New Home MarketOntario home
starts edging lower
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Affordable New Home Segment GrowingShare of
multiple family home starts rising
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Strong Guelph New Home MarketGuelph home starts
down from 2004s 30-year high
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Single-Detached Homes First choice for
homebuyers, but
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Multi-Family Segment Growing
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Reurbanization vs Greenfield Development

• Reurbanization
• Involves redeveloping already ubanized areas
  through various means such as brownfield/greyfield
  redevelopment, infill development,
  intensification and adaptive use
• Greenfield Development
• New urban development on lands on which the
  previous primary activities included farming,
  aggregates or forestry

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Why Reurbanization?

• Why is reurbanization happening?
• Ontario Places to Grow
• Shrinking greenfield land in urban boundaries
• Infrastructure already in place
• Reduce sprawl
• Revitalize cities
• Better for the environment
• What does this mean for Guelph?
• Intensification
• More multiple family homes
• New opportunities for builders

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Ontario Places to Grow

• Highlights
• Direct a significant portion of new growth to the
  built-up areas of the community through
  intensification
• Focus intensification in intensification areas
• Build compact, transit-supportive communities in
  designated greenfield areas
• Reduce dependence on the automobile
• Ensure the availability of sufficient land for
  employment
• Direct development to settlement areas
• Direct major growth to settlement areas that
  offer municipal water and wastewater systems
• Prohibit the establishment of new settlement
  areas

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Population Growth by Age Points to Changing
Market Opportunities
Adult lifestyle/move-down buyers
Move-up buyers
First-time buyers
First-time renters
Seniors housing/renter
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Presentation Outline
Mortgage Rates
Jobs
People
Housing Demand
Consumer Confidence
Resale Home Market
New Home Market
Rental Market
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Plenty of Vacancies in Guelph
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Average Rents Almost Unchangedhigh vacancies
keep pressure off rent increases
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Summary

• Demand influenced by employment growth, mortgage
  rates, and in-migration
• Economic and demographic factors driving strong
  local housing demand
• Lower new home construction in response to a more
  balanced resale market
• Ownership has remained affordable to date, even
  with rising home prices
• Vacancies have been high as ownership has become
  an option for more and more people

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Contact Information

• Erica McLerie
• CMHC Housing Market Analyst
• Market Analysis Centre
• Direct Line [phone]
• emclerie_at_cmhc.ca