Housing Starts

• Ontario home starts will move lower reaching 51,3251 units but owing to economic uncertainty will range between 48,000 to 53,000 unit starts in 2009.

• Home starts will rise in 2010 but residential construction investment will be tempered by more choice in the resale market.

• Share of single detached homes constructed will remain near historic lows

• Stronger demand for inexpensive housing along with tighter rental markets suggests town home and apartment

construction will hold up better.

• Ontario starts move closer to demographic requirements due to slowing economy.

Resales

• Existing home sales will moderate this year reaching 144, 2001 units, down from over 181,000 units in 2008.

• Existing home sales will range between 140,000 to 146,000 units in 2009.

• Rising affordability will be supported by modest employment gains – helping boost sales in 2010.

• Sales over 2009/10 will move in line with levels earlier in the decade.

Housing Market Outlook - Ontario Region Highlights - Date Released: Second Quarter 2009

Resale Prices

• Accommodating conditions for buyers suggests prices will slow by 5.0 per cent this year and 3.6 per cent in 2010.

• Slowing income growth and higher demand for inexpensive housing are factors weighing on average prices.

Economic Forecasts

• Ontario economy will contract in 2009 before a gradual pickup in 2010.

• Declining automotive and forest product exports, particularly to the US, will weigh on goods sector.

• Ontario domestic demand under pressure owing to cautious consumer spending and slowing private sector business investment.

• Cautious consumer optimism will temper the recovery in 2010 as Ontario’s jobless rate moves higher vis-à-vis recent year levels.

• All Canadian regions will be impacted by contracting global economy.

• A narrowing growth gap between the west and central Canada will temper the net outflow of Ontarians headed west

.

Housing Forecasts

• Urban markets tied to auto production and US trade which include Oshawa, Windsor and St. Catharines-Niagara, will see only modest recovery in 2010.

• Hamilton, Thunder Bay, Ottawa and Kitchener new home markets will enjoy greater starts stability as these centers represent the tightest Ontario resale markets.

• Demand shift to more modestly priced ownership and rental housing will upport high-density construction activity in Toronto, Ottawa and Hamilton.

Mortgage Rates Forecast

• Mortgage rates are expected to be relatively stable throughout 2009, remaining within 25-75 basis points of their current levels. Posted mortgage rates will increase very gradually during the course of 2010, reflecting a rise in government of Canada bond yields. For 2010, the one-year posted mortgage rate will be in the 4.75-6.00 per cent range, while three- and five-year posted mortgage rates are forecast to be in the 5.00-6.75 per cent range. Q1 2009 4.83 % pt. chg from Q1 008 -2.42 2009 (F) 4.80 2010 (F) 5.29 Q1 2009 5.71 % pt. chg from Q1 2008 - .58 2009 (F) 5.64 2010 (F) 5.94 Source: Bank of Canada, CMHC Forecast