2010 Member Forums

 Housing Market Outlook

       Jason Mercer
Senior Manager, Market Analysis
        jmercer@trebnet.c...
Part 1: Resale Market Outlook

Part 2: Resale Market Breakdown

Part 3: New Home Market

Part4: Rental Market

Part 5: TRE...
Immigration!Drives!Population!Growth
GTA!Most!Diverse!Metropolitan!Area!in!the!World


Share!of!Foreign"Born!Population
in!Major!Metropolitan!Areas
         To...
Sustained!Population!Growth!is!Projected


Toronto!CMA!Population
Historic!and!Projected
10,000,000

 8,000,000

 6,000,00...
MLS® Sales!Will!Follow!Population!Trend!– Long!Term


GTA!MLS®!Sales
Historic!and!Projected
140,000
120,000
100,000
 80,00...
Affordability!Improved!Markedly!in!2009,!but…


TREB!Affordability!Indicator!
Share!of!Average!Household! Income!Used!for!...
…the!Cost!of!Home!Ownership!will!Rise!in!2010


TREB!Affordability!Indicator!
Share!of!Average!Household! Income!Used!for!...
MLS® Sales!Remaining!Strong!but!Edging!Lower


TREB!MLS®!Annualized!Sales/Listings!Trend:!
Historic!&!Forecast
           ...
More!Home!Owners!Will!List!


TREB!MLS®!Annualized!Sales/Listings!Trend:!
Historic!&!Forecast
                            ...
Market!Conditions!Not!as!Tight!in!2010


TREB!MLS®!Annualized!Sales/Listings!Trend:!
Historic!&!Forecast
                 ...
Market!Tightness!Correlates!With!Price!Growth


Sales"to"New"Listings!Ratio!vs.!Average!Annual!Price!Change
              ...
After!Very!Strong!Price!Growth!in!2009…


TREB!MLS®!Average!Price!Trend:!Historic!&!Forecast
450,000

400,000

350,000

30...
…the!Average!Price!Trend!Will!Flatten


TREB!MLS®!Average!Price!Trend:!Historic!&!Forecast
450,000

400,000

350,000

300,...
Components!of!Affordability




 Average
  Price
  +7%
Economic!Recovery!is!Underway!in!Canada


Canadian!Real!GDP,!Monthly
Month"Over"Month!Per!Cent!Change
 0.8%

 0.4%

 0.0%
...
GDP!Growth!Will!Continue!in!2010


Canadian!Real!GDP,!Quarterly
Annualized!Quarter"Over"Quarter!Per!Cent!Change
 6%
 4%
 2...
Components!of!GDP!Growth


Canadian!Real!GDP,!Quarterly
Annualized!Quarter"Over"Quarter!Per!Cent!Change
 6%
 4%
 2%
 0%
  ...
Consumer!Price!Growth!Moving!Toward!BoC!Target


Canadian!Consumer!Price!Index!(CPI)
Year"Over"Year!Per!Cent!Change
 4%
 3...
Bank!of!Canada!Will!Increase!the!Overnight!Rate


Bank!of!Canada
Target!for!the!Overnight!Lending!Rate
6%

5%

4%

3%

2%
...
Slope!of!Yield!Curve!Changing


Canadian!Government!of!Canada!Bill/Bond!Yield!Curve
Spot!and!Derived!Forward!Rates
       ...
Variable!and!Fixed!Mortgage!Rates!Will!Increase!
               Disproportionately


Prime!Rate!and!5"Year!Fixed!Mortgage!...
Rates!Will!Still!Be!Very,!Very!Low!Historically


Average!5"Year!Fixed!Mortgage!Rate:!Historic!&!Forecast
22%


17%


12%
...
Components!of!Affordability




Average
 Price
 +7%
Components!of!Affordability




Average     Mortgage
 Price       Rates
 +7%          Up
GTA!Employment!Will!Start!to!Improve!in!2010


Toronto!CMA!Employment
Actual!and!Annual!Per!Cent!Change
                  ...
GTA!Unemployment!Will!Be!Above!Average!in!2010


Toronto!CMA!Unemployment!Rate
(Seasonally!Adjusted!Trend)
11%
10%
  9%
  ...
Earnings!Trend!Will!Remain!Flat


Toronto!CMA!Average!Weekly!Earnings
$880
$860
$840
$820
$800
$780
$760
$740



Source:!S...
Household!Income!In!Line!with!2010


Toronto!CMA!Average!Household!Income
$100,000

 $90,000

 $80,000

 $70,000

 $60,000...
Components!of!Affordability




Average     Mortgage
 Price       Rates
 +7%          Up
Components!of!Affordability




Average     Mortgage      Hhld
 Price       Rates      Income
 +7%          Up          Fl...
Components!of!Affordability




Average     Mortgage      Hhld    Taxes
 Price       Rates                  &
            ...
The!Average!Home!Will!Be!Affordable!in!2010


TREB!Affordability!Indicator!
Share!of!Average!Household! Income!Used!for!Mo...
The!Average!Home!Will!Be!Affordable!in!2010


TREB!Affordability!Indicator!
Share!of!Average!Household! Income!Used!for!Mo...
Part 1: Resale Market Outlook

Part 2: Resale Market Breakdown

Part 3: New Home Market

Part4: Rental Market

Part 5: TRE...
Share!of!Condominium!Apartment!Sales


High"Rise!Share!of!Total!MLS®!Sales
 24%

 23%

 22%

 21%

 20%

 19%
           2...
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: TRE...
New!Home!Sales!Follow!Resale!Market


GTA!MLS®!and!New!Home!Sales:!Annual!Growth/Decline
 200%
                    MLS!Sal...
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


Remaining!New!
                                                            Central:
Low"...
New!High"Rise!Available!For!Sale


Remaining!New!
High"Rise!Inventory            North:
Total:!14,344!(Dec.31/09)    1,752...
Condominium!Apartment!Construction!Trends


Condominium!Apartment!Completions!and!
Units!Under!Construction
40,000
       ...
Part 1: Resale Market Outlook

Part 2: Resale Market Breakdown

Part 3: New Home Market

Part4: Rental Market

Part 5: TRE...
Historic!Condominium!Apartment!Vacancies


GTA!Rental!Condominium!Apartment!Vacancy!Rate
1.6%
1.4%
1.2%
1.0%
0.8%
0.6%
0.4...
Purpose"Built!Vs.!Condo!Apartment!Vacancies


Rental!Vacancy!Rates:
Purpose"Built!vs.!Condominium!Apartments
5%
          ...
Part 1: Resale Market Outlook

Part 2: Resale Market Breakdown

Part 3: New Home Market

Part4: Rental Market

Part 5: TRE...
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            !   Increased RECO
!   New Home Page               Advocacy
!   Neighbour...
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TREB Housing Outlook 2010

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TREB Housing Outlook 2010

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

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