CHBA - Lethbridge Region
CMHC Announces Premium Increase
Today’s announcement by CMHC increases the premiums on mortgage insurance on average by approximately 15%. Mortgage insurance is required for purchasers with less than 20% down payment. The link below to the CMHC web site also includes a backgrounder which highlights the impact on monthly mortgage payments. While borrowers with only 5% down will be the most impacted, the overall effect on monthly carrying costs is relatively modest and should not have a notable impact on the housing market. CMHC’s private sector competitors (Genworth and Canada Guaranty) have said publicly they favour an increase in premiums to bolster profitability. However, they could forgo the full increase announced by the crown agency to increase their market share. Realtors will use this announcement to create some level of urgency in the market, encouraging buyers to act before May 1st to avoid the increase in fees. This may cause a slight surge in the market during a time of year when sales traditionally begin to trend upward.
Alberta’s Housing Starts Outlook – February 2014
Richard Goatcher, Economic Analyst, CHBA – Alberta
For Alberta’s new home builders 2013 was a very active year, with total housing starts across the province reaching 36,011 units according to CMHC, an increase of 8% over 2012 and representing the best year since 2007. Single-family starts rose by 5% to 18,431 units while multi-family (semi, row and apartment) activity ended the year up almost 11% to 17,580 units.
2014 should be another busy year for Alberta’s new home builders and renovators. Residential building permit values, according to Statistics Canada, were up by 28% year-over-year in the fourth quarter of 2013 to $2.5 billion. Net migration levels were at record levels during the year ending October 1st and the labour market remains strong. Resale markets were generally balanced at year end, with some locations (notably Calgary) favouring sellers. Existing (MLS) home sales in 2013 were the best since 2007 according to the Alberta Real Estate Association (AREA), and this will help bolster demand for renovations going forward. As well, CMHC has reported that rental apartment vacancy rates were down in most locations across the province last fall with rents moving higher.
A sample of the CHBA - Alberta membership was polled in January on their expectations for new housing activity in 2014. The members produced a consensus forecast of 34,350 housing starts province-wide, for a decrease of almost 5% from 2013. However, activity this year will remain well above the five-year average of 28,500 total units tallied between 2009 and 2013.
Most of the pull-back in 2014 is expected in the multi-family segment, where starts are forecast to decline by 7% to 16,350 units. Some builderssurveyed in Edmonton saw last year’s multi-unit production, a 35-year high and the second best on record,leading to fewer starts in 2014 –particularly apartments. Single-detached starts this year are expected to reach 18,000 units province-wide, representing a 2% reduction from last year. The five-year average for single-detached starts during 2009 and 2013 was close to 16,660 units, so 2014 will nonetheless represent another healthy year for the industry.
While CHBA members are forecasting a modest pull back, CMHC expects activity will increase this year. The First Quarter Housing Market Outlook released February 6 predicted total housing starts in 2014 will reach 37,100 units, representing an increase of 3% from all of 2013.
An expected slowdown in multi-family starts in the Edmonton region this year will be offset by increased multi-unit activity in Calgary. CMHC is calling for 36,400 total housing starts in Alberta during 2015, for a decrease of 2% from 2014.
Connect to Info on New Home Warranties
Joan Maisonneuve, Manager, Policy and Industry Issues, CHBA – Alberta
Recent sessions on Alberta’s new mandatory home warranty program held by each of the six CHBA Locals attracted almost 800 people with many great questions so we know our Members are eager for information.
CHBA – Alberta will post information, presentations, documents and links on our website and distribute material through the Locals to help builders and renovators get ready for the February 1, 2014, implementation of the New Home Buyer Protection Act.
The links below include the recent CHBA – Alberta presentation, along with the legislation and regulations for the program. We will add additional links as more information is released.
Updates - Check Here for the Latest Information