Home > market analysis, personal finance, real-estate > A tale of two Housing Forecasts – CMHC vs CREA

A tale of two Housing Forecasts – CMHC vs CREA

Couple housing related news releases this morning… the quarterly Housing Forecast by Canada Mortgage & Housing Corp (CMHC) and a Revised Housing Activity update from Canadian Real-Estate Association (CREA)

I have summarized the house price forecasts for 2010 and 2011 in table below

Forecast Period Canada Mortgage & Housing Corp (CMHC) Canadian Real-Estate Association (CREA)
Average MLS Resale House Price Forecast
2008 Actual 304986
2009 Actual 320362
2010 345500 331600
2011 350800 328600
Annual Percent Change Forecast
2009 Actual 5%
2010 7.80% 3.50%
2011 1.50% -0.90%

CREA President Georges Pahud…

The Bank of Canada recognizes that inflation remains well contained and that economic growth will soften, so interest rates will rise slowly and at a measured pace, which will keep home financing within reach for many homebuyers,” said Georges Pahud, CREA President

What is he drinking? Interest rates have gone up by 50bp (0.5%) on variable mortgages. Bank of Canada (BOC) has not control over fixed rates…I think BOC is responding to avert a potential US style housing bubble not to make housing more affordable…

It is obvious from data that future demand was pulled forward in anticipation of higher interest rates and introduction of HST on new homes.

CMHC maintains its balanced housing outlook for the rest of 2010 and 2011

For non-Canadian  readers:

CMHC is the Equivalent of Fannie/Freddie/Ginnie i.e. buys insured mortgages from from lenders in the form of Mortgage Backed Securities.

  1. July 31, 2010 at 4:54 AM

    extremely interesting! Great info, thanks for sharing!

  1. August 5, 2010 at 9:22 AM

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