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Canadian Housing Market Report

Posted by Sherry Rioux on November 11, 2010

The housing market accounted for one-fifth of Canada’s gross domestic product, or $307 billion in 2009, according to the 2010 edition of the Canadian Housing Observer; the flagship housing report of the Canada Mortgage and Housing Corporation (CMHC).

This annual report is actually an interesting read and provides a comprehensive review of the critical role that housing plays in the Canadian economy.  Here are some of the highlights:

Housing’s Economic Impact
• Housing-related economic activity was $307 billion last year—about 20% of Canada’s GDP
• renovation spending for alterations and improvements grew by 2.8%, reaching about $40.3 billion in 2009
• Real estate comprises over 40% of Canadian household assets
• the average existing home sale generated approximately $6,500 in furniture and appliance sales.
• The energy cost component of shelter costs is about 16% in Ontario

Changing Demographics
• from 2001 to 2006, the number of owner-occupied condominiums in Canada rose 37%, three times faster than owner households overall;
• From 1981 to 2006, the number of owner-occupied condominiums in Canada increased more than five-fold—from 171,000 to 916,000—and the market share of condominiums rose from 3.3 per cent of owner-occupied dwellings to 10.8 per cent.
• Home ownership rates for households with maintainers aged 50 or older have risen substantially, in large measure because of rising condominium ownership rates.
• immigration is strongly linked to population growth
• population growth is a major driver of household growth
• population growth in 2008/2009 hits its highest level since 1991
• In 2009,  the economic downturn reduced employment and slowed disposable income growth.

Mortgage Debt and Home Equity
• Mortgage payments were 33% of average disposable income in Q4 2009, not far from the 31% historical average (This ratio changes when rates and home prices go up and down.)
• The average Canadian homeowner has 74% equity versus just 43% for U.S. homeowners
• 60% of Canadian homeowners have a mortgage.
• 80% of mortgagors have at least 20% equity
• 9% of mortgagors have less than 10% equity
• 18% of homeowners withdrew equity in the 12 months leading up to Oct. 2009, down 22% from the prior year

You can download a full copy of the report here.

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