Goods News for Our Real Estate Market

But, don't go on a spending spree because the Fed's are eager to raise rates.
The year 2011, will be a strong Real Estate market. Why? Because, Canada is letting in a lot of immigrants, Mortgage rates are very low and have to remain low, not very low, but low (who has a crystal ball, more later). There still is alot of consumers wanting housing because, We, Canada is, Clean, Safe, great infrastructure, good schooling, well organized, Opportunistic, free health care, low interest rates and just a thriving country. And in the future water and Gas will become more important. Except for the emerging markets of Asia and South America we are the envy. And many people from those countries would love to come to Canada. We are nowhere near their population densities.
The government is making a ton of money as the price of gas goes up. They also want to put a stop on the hand outs. We all know the Interest rates are artificially low, so we are OK with some rise. That's the key though. The Bank of Canada can't crank on those rates because yes, we have a lot of our own somewhat fragile economy as well as our Interdependence on other countries, ie. United States.
Our Housing sector has continued to help our economy along, so the Federal government needs this to continue but is looking for job growth as a sign that the rest of the economy is building steam - I think this will be one sign for them to raise interest rates (which affects resale housing).

But raising rates too high, too fast will negatively affect our spending habits. Canadian indebtedness is high on the governments agenda. Households have alot of debt (mortgage, credit cards and lines of credit) they are paying back and as stated by the Bank of Canada and the Federal government.
http://www.theglobeandmail.com/report-on-business/video/bank-of-canada-year-ender/article1837557/
 This too quick, too much rise in interest rates will hurt too many people and will create a housing problem.  It can't happen which is good news for the Real Market in the GTA.

Equalized Housing Market Targeted for 2011

The Canadian Real Estate association has lowered the forecast on Sales activity for much of Canada and in particular Ontario. 

Sales activity in the third quarter of 2010 began on a weak footing, but gained traction as the quarter progressed. Improving momentum for home sales activity suggests the resale housing market is stabilizing, but weaker than expected third quarter activity has reduced CREA's annual forecast.

National sales activity is now expected to reach 442,200 units in 2010, representing an annual decline of 4.9 per cent. While monthly levels for sales activity are stabilizing, year-over-year comparisons are likely to remain stretched well into 2011 due to the record-level activity reported in late 2009 and early 2010.

Lackluster economic and job growth, muted consumer confidence, and the resumption of interest rate increases are expected in 2011. Against this economic backdrop, national home sales activity is forecast to decline by nine per cent to 402,500 units.

"Interest rates are expected to resume their return to more normal levels next year, but will still be at levels that are friendly to the housing market," said Georges Pahud, CREA's President. "For the tenth year in a row, more than 400,000 homes are expected to change hands over the MLS(R) Systems of Canadian real estate Boards and Associations next year."

Levels for sales activity and new listings have swung widely until recent months. Despite their volatility, movements in sales activity and new listings have remained in synch and have kept the resale housing market balanced since early 2010. The overall supply of homes for sale has also been trending lower in recent months. The resale housing market has remained balanced on a national basis and in most provinces, resulting in stable average price trends.

The national average home price is forecast to rise 3.1 per cent in 2010 to $330,200, with increases in all provinces. The small revision to CREA's average price forecast reflects changes to the forecast for provincial sales activity and corresponding provincial contributions to the national average price calculation. The balance between supply and demand is forecast to remain stable, resulting in stable price trends.

Modest average price gains are forecast in 2011 in all provinces except British Columbia, Alberta, and Ontario. Lower sales activity in British Columbia and Ontario are expected to result in a 1.3 per cent decline in the national average price to$326,000.

"Housing demand and supply is stabilizing," said Gregory Klump, CREA's Chief Economist. "That's good news for home buyers, who will feel less hurried to make an offer than they did when transitory factors ignited housing demand in early 2010. It's also good news for home sellers, who will feel more confident about price stability now that the housing market has become balanced."

"Interest rates are widely expected to remain low for some time due to recent downward revisions by the Bank of Canada to its outlooks for economic growth and inflation. Consumer sentiment will likely remain under pressure until economic prospects improve meaningfully," said Klump.

"In the meantime, many households will be focused on paying down their debts before the Bank of Canada resumes hiking interest rates next year," Klump added. "Economic uncertainty is likely to keep potential homebuyers in a cautious mood, so the continuation of low and stable interest rates is unlikely to cause housing demand or prices to swell."

From  CREA via CNW.

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