The only sure cure for Ontario’s sagging housing market is more people moving into the province, a CMHC analyst told brokers last week.
“Economic and job growth are not enough,” said Ted Tsiakopoulos, CMHC’s regional economist for Ontario. “You need population growth to fuel the housing market.”
Alberta has been leading the charge the last few years in new housing starts and prices, riding on the wave of high commodity prices in the oil and gas field – and that trend should continue, says Tsiakopoulos.
“The (population) move west will continue in 2013,” he told some 400 brokers gathered at the recent IMBA
conference in Woodbridge. “The high commodity prices are benefitting resource-rich communities, like in Alberta.”
RBC analysts are predicting a slowing of mortgage loan growth anywhere from 2 to 4 per cent over the next two years from the current 5.4 per cent as home sales and prices cool in the Ontario market. Toronto condo sales have also slowed, with unsold inventory rising to what could be 30,000 units by 2014.
“We have seen a condo correction, especially in Toronto, and fewer housing starts in Ontario,” Tsiakopoulos said. “Developers are recognizing there are unsold condo units, and they are slowing the new builds. The building community is responding as it should.”
Despite a sluggish 2012, Tsiakopoulos remains optimistic Ontario will recover.
“Economic growth will close the housing gap for the province compared to the Canadian average, and Ontario will move closer to the growth numbers shown in the West,” he says. “The economy is showing signs of growth.”