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CMHC Cautiously Optimistic

CMHC cautiously optimistic    

According to the Canada Mortgage and Housing Corporation (CMHC), the key factors currently driving Fraser Valley’s housing market are mortgage rates, the employment rate, population growth and demographics. And although consumers have pulled back on spending during this recession, BC’s economy and that of the Lower Mainland remain strong, boding well for 2010.

CMHC’s BC regional office invited key housing industry representatives, including the Fraser Valley Real Estate Board, to a roundtable meeting regarding Fraser Valley’s housing market on June 17 in Abbotsford. Christine Caldwell, Chair of FVREB’s Government Relations committee attended on behalf of Fraser Valley REALTORS®.

"This was my first CMHC roundtable and I found it to be very informative. Not only did all participants share their expertise, CMHC’s economists presented detailed statistics and projections specific to Fraser Valley."

Caldwell says key facts she found interesting included:

  • Interprovincial migration will bring 35,000 people to Greater Vancouver and 1,000 to Abbotsford this year
  • Average weekly wages have grown in the last year (Greater Vancouver +5%, Abbotsford +3%)
  • Housing affordability is improving
  • Although unemployment is up, the situation is already starting to improve
  • $1.8 billion dollars in major projects are proposed for the Fraser Valley
  • Last year, 500 people attended the Greater Vancouver Home Builders’ Association First-Time Home Buyer seminar, this year over 800

Caldwell adds that although CMHC predicts home prices in the Valley will remain "flat for some time", they are projecting a 2% increase in home sales in 2010.

"This session really brought home to me how much the ‘big economic picture’ affects our industry and how fortunate we are that Canada has weathered this economic storm as well as it has and is considered a leader in the world’s recovery."

CMHC outlined how low interest rates and softening prices will encourage homebuyers to enter the market, which according to Fraser Valley member market polls is exactly what has happened over the last two months.

However, CMHC cautions that the unemployment rate, which has already risen, will continue to move up through 2009, dampening homeownership demand. Its roundtable presentation projects total employment will decline by one per cent in Fraser Valley this year and stabilize in 2010.

On the positive side, CMHC says the non-residential construction sector will provide some stability, as infrastructure projects in the pipeline are expected to boost the economy. The completion of the Abbotsford Regional Hospital last year will be a key driver for health care and services in the region. Job growth in these industries will off-set some of the job losses occurring in the warehousing, transportation and retail trade sectors.

Created: 08/13/2009 Modified: 08/13/2009

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