Here's a good article from the Ottawa Citizen, by John Morrissy:
Canada's housing market showed signs of life in February after months of declines, with resales rising 8.6 per cent from January thanks to lower mortgage rates and prices, the Canadian Real Estate Association reported Monday. Despite February's gains, sales are still down 31 per cent year over year, as are prices, which have fallen 9.2 per cent in the past 12 months, the national group said. "It looks like the Category 5 hurricane which had been pounding the home resale market has been downgraded to 'just' a Category 4," said BMO Capital Markets economist Douglas Porter.
A total of 28,669 homes changed hands in February on a seasonally adjusted basis via the industry group's multiple listing service. The increase represents the first month-to-month uptick in home-resale activity since September 2008. "Typically, the spring market we're moving into generates more activity, and this year there are the benefits from historically low mortgage rates and improved affordability in most markets," said CREA president Calvin Lindberg.
CREA cautioned that listings remain high, although the number is trending lower, with 65,060 units listed for sale in February, down 10.9 per cent from the same month a year ago. "The housing supply is expected to continue easing, but it will take time before it realigns with lower demand," said CREA chief economist Gregory Klump. "Economic uncertainty is keeping home buyers in a cautious mood, so homes are taking longer to sell than in recent years. "Lower sales activity at the higher end of the price spectrum will keep the national MLS residential average price under downward pressure."
The national average price for home sales via the MLS was $281,972.
Mortgage rates, meanwhile, are near historic lows. On Friday, for instance, TD Canada Trust lowered its seven-year fixed mortgage rate by 0.2 points to 6.8 per cent.
CREA said February's 9.2 per cent annualized price decline is smaller than year-over-year drops posted in the past four months. It is also the first time the pace of decline decelerated since turning negative in July 2008. "The report does offer some hope that the decline in Canadian home prices may have stabilized somewhat in February after appearing to have accelerated in the latter months of 2008," said TD Securities economics strategist Millan Mulraine. "Not surprisingly, the biggest decline in prices were in Calgary (down 10.8 per cent year over year), Greater Vancouver (down 13 per cent), and Windsor (down 15.7 per cent). However, prices in Toronto (down 5.4 per cent) were also lower, while prices in Montreal (up 2.2 per cent) and Quebec City (up 9.3 per cent) continue to rise, albeit at a more modest clip," Mulraine said.
Prices in Ottawa were off a modest 0.9 per cent.
Nevertheless, Porter added: "Even with a moderate improvement in February home sales from the exceedingly weak levels around the turn of the year, it's still a clear-cut buyer's market in most regions of the country. And, that doesn't look likely to change anytime soon." Sales picked up out West with British Columbia reporting a 14.4-per-cent increase, while Alberta posted an 11.9-per-cent rise. Sales in Ontario and Quebec were in line with the national average. Manitoba had the biggest drop, down 11.8 per cent last month.
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New construction in Ottawa fell 57% in February due to the economic downturn. The Canada Mortgage and Housing Corp. stated that work was started on 137 units this year compared with 317 units in February 2008.
There were no construction starts in apartment units compared to 56 starts in February 2008. On single family houses, construction fell by 59 per cent and on row-housing units by 36 per cent.
In all of Canada, housing starts fell by 12 per cent last month.
Canada Mortgage and Housing Corp. says the downturn in the economy will drive home construction to a nine-year low in 2009, a marked decline from the Crown corporation's November forecast.
But Bill Clark, senior economist with CMHC, said it was impossible last quarter to predict the severity of Canada's economic decline.
Three months ago, CMHC forecast that there would be 177,975 new homes built this year. Yesterday, the figure was adjusted to 160,250 -- a level not seen since 2000. The forecast would mean a 24-per-cent decline from the 211,056 units constructed last year.
"There (have been) some issues that have come up in the economy that were not foreseen, that's been the case for much of the forecasting," said Mr. Clark.
The drop in construction would mark the end of arguably the strongest housing market in Canadian history, a seven-year run of more than 200,000 units built each year. It would also mean the industry is now building fewer than the 175,000 units the country needs based on demographic estimates.
"There have been also a lot of new listings lately," said Mr. Clark, referring to the market for existing home sales, as one of the reasons for the contraction in new construction.
He says consumers have a wider choice in the existing home market and that's driving them away from buying a new home.
CMHC's forecast says existing homes sales will drop almost 15 per cent this year from 2008 while the average sale price will fall by 5.2 per cent to $287,900.
The agency is predicting a modest recovery in 2010 with sales up about nine per cent but the average sale price will only improve by $200.
Benjamin Tal, a senior economist with CIBC World Markets, says the lack of liquidity in the housing market makes it very difficult to forecast where prices will eventually settle.
"The resale market is basically paralyzed," said Mr. Tal, referring to the fact that year-over year sales are down as much as 50 per cent in some markets like Vancouver.
"The market is in a state of shock.
"Nothing is happening. The prices we are getting now are just a rough proxy. It's not an accurate reading."
CMHC is predicting that average Ottawa resale housing prices will rise just 0.5 per cent to $292,000 this year as sales fall 13 per cent and construction starts drop 17.7 per cent.
But it predicted the capital will recover quicker than other big cities because jobs and incomes will continue to grow slowly.
CMHC said that despite the slowdown in the resale market, the Ottawa market is benefiting from a stronger balance between listings and sales and moderate price increases in the past.
CHMC is predicting Ottawa housing prices will rise by an average of $5,000 in 2010 to reach $297,000.
© Copyright (c) The Ottawa Citizen
Ontario's governement introduced what they call the "Green Energy Act" today. Part of this plan calls for homeowners to obtain an energy audit before they put their house up for sale.
So far, we don't know when this audit will be mandatory. The government wants to make sure there are enough auditors working before the plan goes ahead. The audit will cost about $300.00.
Some of the benefits for homeowners include the availability of no or low-interest loans to build a small-scale energy saving project such as rooftop solar panels or micro wind turbines.
Market Comment
Here is a summary by Lynn Fraser of Mortgage Intelligence, whom I personally endorse.
Long term rates have dropped to hit 50 year lows with several lenders in the 4.29-4.39% range on 5 year funds. Variable rate mortgages are running around 3.75-3.80%.
With rates so low, everyone with an existing mortgage should be exploring whether or not to refinance. We have had several situations where savings after paying the penalty exceeded $10,000!
The next meeting of the Bank of Canada is on March 3rd, 2009.
The Bank prime is at 3.00%.
Mortgage Rate Shopping
The rates below are a summary of the industry as of today. They do not necessarily reflect the best possible rates we can obtain, but not reflect a snap shot of extremely good rates in today’s market. They are provided to you to give you an overview of market conditions. The reason we do not show the lowest possible rates for all products, is to avoid the possibility of a "bait and switch" taste happening to you. There are many factors which effect what rate is best for you.
What is your mortgage plan/strategy? What are your short and long term mortgage goals? What is your tolerance for risk?
These are just a few of the thought provoking questions you should be asking yourself before you decide what rate is best for you.
Term | Bank
Posted Rate | Mortgage
Intelligence | Payment
Factor * |
6 month | 5.20 | 5.20 | 5.14 |
1 Year | 5.00 | 3.89 | 4.34 |
3 Year | 5.75 | 4.09 | 4.46 |
5 Year | 5.79 | 4.34 | 4.61 |
7 Year | 7.00 | 5.90 | 5.59 |
10 Year | 7.15 | 6.05 | 5.69 |
15 Year | - | - | - |
18 Year | - | - | - |
25 Year | - | - | - |
Variable Rates as low as... | Prime Plus .75% | | |
Bank Prime | 3.00 | | |
| | | * payment per $1,000 of mortgage | |
Rates updated as of Wednesday, February 18 *
* Above rates subject to changing market conditions & O.A.C. E. & O. E.
* Payment factor is based on a 35 Year Amortization
Here's another great article by Bob Arron:
Earlier this month, the Supreme Court of Canada issued a decisive ruling that clarifies once and for all that the interest paid on a mortgage taken out to purchase a principal residence cannot be tax deductible under any circumstances (unless part of the house is used for business purposes.)
The ruling in the case of Lipson v. Canada relates to a complicated series of transactions put into place by Earl and Jordanna Lipson back in 1994.
Initially, Jordanna borrowed $562,500 from the Bank of Montreal to buy shares in her husband's company at market value. She paid the proceeds of the share purchase loan directly to her husband.
The next day, the couple bought a home for $750,000 and obtained a Bank of Montreal mortgage on it for another $562,500. Right after the house closing, the Lipsons used the proceeds of the mortgage to pay off the share purchase loan completely.
In 1994, 1995 and 1996, the husband deducted from his taxable income a total of more than $104,000 in interest expenses on the mortgage loan.
The Minister of National Revenue disallowed the deductions and reassessed Lipson accordingly. The government's position was that the complicated series of transactions amounted to "abusive tax avoidance."
In this country, evading tax is illegal, but avoiding tax is – generally – acceptable, except when the avoidance is abusive. If the minister believes a tax avoidance scheme is an abuse and misuse of the Income Tax Act, the government can invoke the general anti-avoidance rule (GAAR) and deny the taxpayer's claimed deductions. That's what happened in the Lipson case.
When his deductions were disallowed under the GAAR rules, Earl Lipson took the minister to Tax Court, then the Federal Court of Appeal and ultimately, the Supreme Court of Canada.
In a 36-page judgment with two separate dissents, the Supreme Court sided with the government and the two lower courts in a 4-3 ruling.
The Lipson case may have serious ramifications for taxpayers who use schemes like the Smith Manoeuvre to attempt to convert the interest on their principal residence mortgage to a tax-deduction.
The seductive pitch for the Smith Manoeuvre on the promoter's website, www.smithman.net, reads, "Go ahead, make your mortgage tax deductible. Yes, it can be done. Yes, it's legal."
The essence of the Smith Manoeuvre strategy is that each month the homeowner pays down a little bit of the principal owing on the home mortgage, and then borrows it back. The borrowed money is then invested and the carrying charges on that newly borrowed money only are tax-deductible.
But, according to Melanie and Robert McLister at canadianmortgagetrends.com, "it's not for everyone. There are both investment risks and serious tax risks. Your (investment) returns could be insufficient, CRA (Canada Revenue Agency) could invalidate your application of the strategy, or you could wind up in a negative amortization scenario if your house value falls."
(A negative amortization occurs when the balance owing on the mortgage exceeds the value of the house.)
In my opinion, strategies like the Smith Manoeuvre are far too risky for the average homeowner.
After the Lipson decision was released, tax specialist Dan White wrote me to say that taxpayers simply "cannot convert their mortgage to tax-deductible interest. The final verdict is in. ... The primary purpose of an activity dictates the final results in tax deductibility.
"They can borrow money against their house to invest and write off the interest ... so long as it is not just a manoeuvre."
Anyone tempted to participate in the Smith Manoeuvre or other strategies to try and make interest on a home mortgage tax-deductible should obtain tax advice from a qualified accountant or tax lawyer who is not selling anything except unbiased advice.
Tax advisers who make a commission from selling participation in schemes like the Smith Manoeuvre may be in a conflict of interest and their advice may not be impartial.
Above all, taxpayers should not be misled by promises, which appear to make all their home mortgage interest tax-deductible.
Here's another great article by Bob Arron.
The fallout from mortgage fraud cases in recent years continues to occupy the attention of lawyers, judges and the innocent parties involved.
Back in 2006, Paul Reviczky rented out a house he owned on Sheppard Ave. W. to a person who turned out to be a fraudster. Using a forged power of attorney in favour of Reviczky's non-existent grandson, the bogus tenant listed the property for sale on the Multiple Listing Service.
The house was eventually sold to Pegman Meleknia without the knowledge of the true owner, and the "tenant" disappeared with the sale proceeds.
Real estate lawyer Satwant Singh Khosla had acted for Meleknia, the innocent purchaser. HSBC Bank Canada financed the transaction by giving Meleknia a first mortgage that was title-insured by Stewart Title Guaranty Company.
On closing, HSBC advanced the mortgage money to Khosla, who deposited it into his trust account at the Royal Bank of Canada. Khosla then drew a certified cheque in favour of Paul Reviczky for $429,861.06, representing the balance of the purchase price.
The cheque was certified by RBC and handed over to the fraudster on closing. He forged the signature of Paul Reviczky on the back of the cheque, and deposited it into an account at the Korea Exchange Bank of Canada (KEBOC) in the name of Aaron Paul Reviczky, the fictitious grandson. He then disappeared with the money.
It took two separate court hearings last year for Reviczky to get clear title restored to his own name. Last December, a court ruled that the HSBC mortgage, which financed Meleknia's purchase, was invalid because the bank failed to scrutinize the bogus power of attorney. Following that ruling, Stewart Title paid off and discharged the HSBC loan. At the same time, it also reimbursed Meleknia for his losses in purchasing a house that the seller didn't own.
To my surprise, the story did not end with that ruling. Another court case was waiting in the wings.
At the conclusion of last year's litigation, Stewart Title was out-of-pocket all of the money it had paid to HSBC and Meleknia.
Khosla, representing Stewart Title's interest in recovering the money, sued the Korean bank to recover its losses. In the lawsuit, Khosla alleged that by clearing the cheque on the basis of a forged and unauthorized endorsement, KEBOC was liable for damages of $429,481.26 for conversion – in other words, wrongfully taking the money.
KEBOC denied that improper conversion of the funds had taken place. Instead, it pointed the finger at Khosla, the lawyer who wrote the cheque in the first place.
Last May, Khosla applied to the Superior Court for what is known as a summary judgment on its claim against the bank, without having to go to trial.
Khosla argued that the act of conversion is one of "strict liability," which means that the bank would be responsible for cashing the cheque with the forged endorsement, no matter what actions it took or how careful it was.
Earlier this month in Toronto, Justice Frances Kiteley released her decision and agreed with Khosla. KEBOC was held responsible for conversion and was ordered to pay Khosla $429,481.26 plus interest since May, 2006, and costs of $6,000.
Those funds will be paid over to Stewart Title, which had reimbursed HSBC for its losses due to the fraudulent sale of the property and the invalid mortgage from the innocent buyer.
This means that the big loser in the case is not Reviczky, Meleknia, Khosla, HSBC or Stewart Title, but instead the bank which cashed the lawyer's trust cheque on the basis of a forged endorsement.
Since the fraudulent sale of the Reviczky property, the Ontario government has made it much more difficult to use a power of attorney in real estate transactions. Hopefully, in future, the occurrence of this type of fraud will be greatly reduced.
Bob Arron
Here is a good article by Bob Arron that decribes the importance of having a Home Inspection done.
A recent decision of the Small Claims Court in Winnipeg illustrates whether the buyer or seller is responsible for damage to a home, which is discovered on closing.
Hazem Alzawawy was interested in buying a small house in Winnipeg. He found a tiny 612-square-foot, one-bedroom bungalow that was described in the listing with the Winnipeg Real Estate Board as having forced air, natural gas heating.
When he inspected the house there was a furnace in the basement. He assumed it was in working condition because of the information on the listing.
There were also five or six space heaters in the house, but Alzawawy didn't think anything of it since it was not uncommon in Winnipeg to use space heaters as an additional heat source.
In February last year, Alzawawy made an offer to buy the house for $35,000. The offer was accepted and closing took place on April 1, 2007.
On the afternoon of the closing day, the buyer entered the house to find pieces of ice hanging from the faucets and the water in the toilet bowl frozen. All of the space heaters had been removed and the house was extremely cold inside.
Two days later, the new owner discovered a tiny sticker on the furnace indicating that it had been turned off two years earlier. An inspector came from Manitoba Hydro and reported that the furnace was "currently unsafe."
Alzawawy later had the furnace replaced at a cost of $2,750. The work to correct the damage caused by the frozen pipes cost $7,500.
Claiming that the seller – Amelia Mesa – left the house without a working furnace or other heat source, Alzawawy sued for the cost to replace the furnace and repair damage caused by frozen pipes.
At trial, the seller argued that the presence of the space heaters should have alerted Alzawawy to the fact that the furnace was not working, and that the doctrine of caveat emptor (buyer beware) applied to the case.
Justice Shawn Greenberg disagreed.
"In my view," she wrote, "it was reasonable for Mr. Alzawawy to assume, considering the representation in the listing agreement, that the furnace he saw in the house was working. ... I think it is reasonable for a person buying a home in Winnipeg (especially when the purchase and possession are in winter) to assume that the home has a heat source. Mr. Alzawawy was left with a home with none."
Greenberg noted the owner did not testify, and there was no explanation why the listing showed the house had forced air, natural gas when in fact the furnace had been turned off two years earlier.
In holding the seller responsible for $10,000 in damages (the dollar limit in Manitoba Small Claims Court), the judge ruled that the risk of damage passed to the purchaser at 9 a.m. on the day of closing. But since Environment Canada records showed that the temperature was above freezing on that date, she concluded that the freezing must have occurred sometime before the time of closing, "as a result of the defendant's failure to heat the house."
Several lessons may be learned from the case:
Purchase agreements should always provide for an inspection just before closing.
Always have an expert or a home inspector check the furnace and air conditioning, especially if you're buying off-season.
Make sure the purchase agreement contains warranties that the mechanical systems are in good working order.
If you're leaving the house for a holiday in the winter, remember that if the furnace fails or a circuit breaker trips or fuse blows, the heat will turn off – resulting in frozen pipes. Shut the water off at the source and turn a tap on to bleed the pressure out of the system.
Make sure your insurance policy covers damage from frozen pipes.
The biggest decliner was bungalow sales, off 26 per cent. Two-storey houses and condominium apartments fell 16 and 17 per cent respectively but condo townhouses rose 16.7 per cent.
The average price of resale housing rose 1.5 per cent to $288,105 as a decline in condo apartment prices weighed down price increases for townhouses, bungalows and two-storey houses.
Ottawa Real Estate Board president Richard Snell said "while the market in Ottawa may not be booming, it's certainly not a bust either. Sales declined the same amount in January as they did in December, which tells me that buyer confidence is holding steady."
Average prices had declined 1.2 per cent in December to $272,192 as sales of more expensive two-storey houses dropped off.
Some analysts are predicting that Ottawa house prices should at least hold their own this year despite weaker sales here and predictions of more price declines in Toronto, Vancouver and elsewhere.
Last year, Ottawa housing resales fell 5.7 per cent but prices rose an average of 6.3 per cent to $289,766 largely on the strength of healthy market conditions in the first half of the year.
© Copyright (c) The Ottawa Citizen
Canada Mortgage and Housing Corp. said Monday there was a significant decline in condominium townhouse and single-family housing construction across the region, with activity in many suburban areas hardest hit.
But in the old city of Ottawa, there was a big pick-up led by Vanier where work started on 189 condominium apartments and 15 townhouses — the strongest performance so far this decade.
CMHC said housing starts overall fell to 411 units from 502 a year earlier. Single-family housing starts fell 21 per cent, townhouses 35 per cent and apartments 14.5 per cent.
Condominium apartments accounted for 213 of new unit construction or 52 per cent of all construction.
“As the pace of new construction enters a cooler trend more consistent with economic and demographic fundamentals, higher-density construction will become the most sought after dwelling type in Ottawa’s new home market,” said Sandra Pérez Torres, senior market analyst at CMHC.
Consistent with previous years, construction of condominium apartments led the way during the first month of the year, while overall higher-density construction accounted for almost three-quarters of total starts in the Ottawa CMA.
Across Ontario, CMHC said that seasonally adjusted housing starts fell to 50,100 in January from 60,300 in December. Single-family housing led a broad-based decline. Approximately three out of four Ontario urban centres experienced declines from a year earlier.
“A cooler labour market, cautious consumer spending and rising inventories in both existing and new home markets dampened the pace of Ontario residential construction activity,” said Ted Tsiakopoulos, CMHC's Ontario regional economist. “Much of the same can be expected in the months ahead as the housing industry adjusts to a slowing economy.”
© Copyright (c) The Ottawa Citizen
Ottawa's resale housing market continues to perform well despite sales and prices dropping in other Canadian markets.
While the national price average for detached bungalows dropped 4.8 per cent over 2008, in Ottawa the price actually increased by 4.1 per cent to $321,333. Across Canada, condo prices dropped by 5.2 per cent, but in Ottawa, the price rose by 5.2 per cent to $207,167. Two storey houses saw an average decrease of 6.3 per cent in the country, but in Ottawa increased by 3.5 per cent to $317,083.
In Kanata, over the last year detached bungalows increased in price by 1.3 per cent, condos increased by 2.8 per cent and two storey houses saw a price increase of 2.3 per cent.
The real estate market continues to do well in the Ottawa area. The market is expected to be balanced for 2009 meaning an equal advantage to both buyers and sellers.
Here is an excellent article written by Bob Aaron of the Toronto Star!
Is a real estate agent responsible for accurately advertising the lot size? What happens if he or she gets it wrong?
Those were the questions facing clients of mine recently. Last August, Regina and Leon signed an agreement to buy a house in Vaughan for $730,000.
Located between Bathurst and Dufferin Sts. north of Major Mackenzie Dr., the luxury five-bedroom house is 4,200 square feet in size.
It was listed in July 2008 by an agent with a large brokerage in Woodbridge at an asking price of $759,900. The house was purchased from the builder two months earlier for $726,977 plus GST, so even if it had sold for its full asking price, the seller would have lost money.
Unfortunately, the listing agent advertised the lot size as 55 by 110 feet, and those measurements were included in the agreement of purchase and sale. In fact, the frontage as shown on the subdivision plan is only 13.72 metres, or 45 feet. The discrepancy exceeds 18 per cent.
During the period that the offer was conditional on inspection, Regina and Leon were handed what they were told was a survey of the property. In fact, it was a pre-construction siting and grading plan, which shows the lot and proposed location for the house. It contains dozens of measurements of the lot elevations above sea level. Obscured in the small print was an indication of the correct lot frontage.
When the lot size problem was discovered by my clients' real estate lawyer, he referred Regina and Leon to me to see if I could help resolve the problem.
I met with the clients and provided them with a detailed explanation of the law on breach of contract, agent negligence and misrepresentation, as well as the costs and risks of litigation if they didn't close and decided to sue for return of their $20,000 deposit.
Despite my assurances that the law was on their side, Regina and Leon decided to terminate the transaction when we could not negotiate a price reduction to reflect the smaller lot size.
The seller and his lawyer were adamant that my clients were in default, and that the seller was not, because the grading plan had been given to them while the offer was conditional.
My clients reluctantly agreed to forfeit their deposit and sign a release with the seller. This process took several weeks because the seller's lawyer and agent would not agree to a release unless the selling agent and brokerage were also released from liability.
Eventually, the parties agreed directly with each other – and against the adamant advice of the seller's lawyer – to release each other but not the agent.
The house, which could have been sold to my clients in October, is still on the market. It has now been relisted with another agent and another brokerage at $729,900 – $30,000 less than last summer's asking price. Meantime, the owner is carrying the costs of taxes, utilities and a mortgage of $616,000.
The real estate commission on the original transaction was about 5 per cent, or $36,500, half of which would have gone to the listing agent and brokerage. During the negotiations over the lot size, the seller refused to lower the price and the agent refused to budge on the issue of whether he would contribute part of his commission to compensate for the mistake in the listing.
As a result, the agent lost the commission, the client and the listing. Although the seller received my client's $20,000 deposit, the market for luxury homes in Vaughan is softer now and when the house sells, he will clear less money than if he had lowered the price to my clients.
The listing agent now faces litigation for my client's losses, as well as a complaint to the Real Estate Council of Ontario, the licensing body for Ontario real estate agents.
Regina and Leon's story is a classic example of why purchasers should review a survey before signing an agreement to buy a house.
Canada's central bank chief, Mark Carney, predicted that the recession of 2009 will not last as long as previous recessions. The Bank of Canada Governor forcasted a decline of 1.2 per cent in Canada's economy in 2009, followed by an increase of 3.8 per cent in 2010. Canada's recovery is expected to be quicker than other nations because of the relative health of our economy.
It was also noted that the availability of credit in Canadian banks remains healthy which is excellent news for people hoping to secure a mortgage soon.
The Bank of Canada lowered the overnight lending rate by .5 per cent to 1.0 per cent which is a total decrease of 3.5 per cent since December 2007. It is expected that the rate will lower even further after the next Bank of Canada announcement in March.
The rate was lowered in an effort to boost our economy which is expected to contract by 1.2 per cent in 2009.
Most banks are expected to lower their prime rate to 3%. The prime rate is the rate that the banks give to their best corporate borrowers and is the base for lending for everything from mortgages, lines of credit, consumer loans and car loans.
The real estate market for Ottawa for 2009 is expected to be stable. Experts are predicting a balanced market which favours both buyers and sellers.
In 2008, although there was a Canada-wide 15% reduction in home sales, the numbers in Ottawa showed only 5% fewer sales than the previous year.
In 2008, Ottawa real estate prices increased by 7% and this is expected to increase a further 3% in 2009, making the average Ottawa home cost $292 000.
The Ottawa real estate market tends not to follow extremes as we have a high number of post-secondary graduates with healthy incomes.
Ottawa new house construction increased 5.8% from last December. The Ottawa Citizen reported that work started on 471 units this December. This is the fourth year in a row that new housing starts have showed continuous growth. However, this number is expected to decline in 2009 as Canadians are cautious about the state of the economy.
Builders in Canada say that the housing market will "cool", but we do not need to fear a U.S. style real estate market collapse which resulted from unwise lending practices.