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 May 22, 2008 Balanced view of real estate market Canadians overall have not changed their opinions about the housing market. They are knowledgeable, but not influenced by the speculation that the Canadian economy will be negatively affected by the U.S. economic downturn, according to a report released today by the Canadian Association of Accredited Mortgage Professionals (CAAMP). The report, authored by CAAMP Chief Economist Will Dunning, is based on information gathered by Maritz Research in an online survey in April 2008. The report says that Canadians have shown themselves to be keen observers of the fallout from the subprime mortgage meltdown in the United States. Only 11 per cent of those surveyed said they were not at all aware of the U.S. housing crisis, down one-half compared to 22 per cent who were not aware in the Fall of 2007. Armed with this knowledge, Canadians view their own housing market through the lens of economic conditions and house prices in their own communities. One-third of respondents said now was a good time to buy a house, one-third said it was not a good time, and one-third were neutral. "This report indicates mortgage consumers are educated, informed, and attuned to local market conditions," said Jim Murphy, AMP, President and CEO of the CAAMP. "Canadians are aware of the strength of the economy and remain confident in our housing and mortgage markets." In addition, the report says that the arrears rate for residential mortgages remains close to the very low levels that have held since mid-decade, about one quarter of a per cent. Canada has not experienced the sharp increase in arrears and defaults that has occurred in the United States. Canadians have yet to react to suggestions that the economy will soon start feeling the impact of higher energy and food prices, and that Ontario is hovering close to a recession. "Job creation in Canada is still very strong. Moreover, the housing market doesn't respond immediately to swings in employment; it takes people time to react to changes in personal circumstance," said CAAMP Chief Economist Will Dunning. "Even if recent forecasts are right and the labour market in Canada should start to weaken, momentum from past job creation should result in continued strong housing demand well into 2009," he added. Alternative mortgage products, including longer amortization periods, no down-payment mortgages, and interest-only mortgages, continue to grow in popularity in Canada. In 2007, CAAMP found that 37 per cent of recent home purchases had been funded with extended amortization mortgages. In the current survey, the most positive opinions are held by people who are most likely to be in a position to use extended amortization products - renters looking to buy. Younger Canadians looking to become first-time homeowners are most interested in alternative mortgage products and while cautious and conservative, they are optimistic about the overall future of these options. "CAAMP members are committed to working with consumers to ensure they have the mortgage solution that is affordable and best suited for their unique needs," said Andrew Moor, AMP, Chairman of CAAMP. "Mortgage brokers are fast becoming a trusted source and are growing in popularity with first time buyers and increasingly with other consumers," said Moor. "Above one-third of mortgage transactions for new homeowners came through brokers." "Housing and Mortgage Market Trends in Canada" contains a wealth of additional industry data, including regional breakdowns of survey responses, information about Canada's employment rate, the role of job creation in fuelling Canada's housing market, and additional insight into housing forecasts in Canada and the United States. For a full copy of the report, please visit: www.caamp.org. (Source: Vancouver Sun) Go Back To The Market Updates Page Questions? No problem! For more information, please feel free to contact June Conway toll free at +1.888.657.7123. Of course, you could always just email June Here . |
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