Housing Market Increasing Inequality Says OECD
A new report from the Organization for Economic Co-Operation and Development says that Canada’s overheating housing market is increasing inequality. The study, the first for two years, is generally positive about the economy, highlighting growth predictions for this year and next, but the OECD says that too many Canadian’s are living in cities where property is unaffordable. It says that it would not take much of a slide to cause a drop in consumer consumption or a credit crunch by lenders. The report also questions why the Canada Mortgage and Housing Corporation insures 100 per cent of high risk mortgages compared to equivalent schemes elsewhere which protect between 10 and 30 per cent. The OECD warns of a two speed economy and the lack of skilled workers in some regions. Read the full story.
Rents Up Says CMHC
Finding rental property in many urban areas of Canada is hard going according to the latest rental market report from the Canada Mortgage and Housing Association. Alberta, as an example, has some areas where vacancy rate is zero, and the average in the province in April was 1.8 per cent, marginally up on a year before. As the laws of supply and demand dictate, rents have risen as a result, with the CMHC finding the average rent rose by 5.5 per cent year on year. Read the full story.
Royal Bank Predicts Growth in the West
The Royal Bank has released its predictions for the economy for this year and next and Alberta is where most growth will be seen, especially in the jobs market. There is also good news on exports for Ontario, while Newfoundland will see the lowest growth this year. Saskatchewan, which was boosted by agriculture last year, will see slower growth this year before recovery in 2015. The growing workforce in Alberta will be likely to add further demand for housing in the province with the resulting effect on prices. Read the full story.
Housing Crash ‘Unlikely’
A poll by Reuters predicts that house prices will continue to rise but that a crash is unlikely. The survey asked 25 analysts for their predictions, and more than half think that the market will peak this year, but hasn’t yet. They also predict that, although the housing market is overvalued, as interest rates rise, the market will cool. The consensus is that we will not see a crash largely because of tougher lending regulations. Read the full story.
Site Thefts Add $1000 to House Cost
Summer always sees an increase in thefts from construction sites, with appliances, tools and raw materials all in the sights of thieves. The CEO of the Nova Scotia Builders’ Association says that the cost adds around $1000 to the cost of a new property. Although bigger developments can afford to hire security firms to protect sites from theft and vandalism, the smaller sites, such as a one-off build, can’t justify the cost. Collectively the cost of thefts from sites runs into millions of dollars. The police are targeting thieves, with additional traffic stops and checkpoints in areas that are frequently affected. Read the full story.