cmhc toronto q4 2014outlook
TRANSCRIPT
-
8/10/2019 CMHC Toronto Q4 2014Outlook
1/44
TORONTO HOUSING MARKET
CANADA MORTGAGE AND HOUSING CORPORATION
HOUSING OUTLOOK CONFERENCE
Optional
City photo Optional
ous ng mar e n e gence you can coun
on
-
8/10/2019 CMHC Toronto Q4 2014Outlook
2/44
Outline
High Rise vs. Low Rise
CANADA MORTGAGE AND HOUSING CORPORATION
-
8/10/2019 CMHC Toronto Q4 2014Outlook
3/44
More MLS Sales Next Year
100,000
Total MLS Sales
89,2
55
88,2
14
91,7
60
88,1
57
88,9
46
92,5
00
96,0
0
92,0
00
80,000
90,000
76,3
87
70,000
60,000
2008 2009 2010 2011 2012 2013 2014F 2015F 2016F
CANADA MORTGAGE AND HOUSING CORPORATION
MLS is a registered trademark of the Canadian Real Estate Association (CREA)Source: CREA, CMHC forecasts (F)
-
8/10/2019 CMHC Toronto Q4 2014Outlook
4/44
Supply Will Keep the Resale Market Balanced
Sales-to-New Lis tings Ratio
100%
80%
40%
20%
2
004Q1
2
005Q3
2
007Q1
2
008Q3
2
010Q1
2
011Q3
2
013Q1
2
014Q3
01
6Q01F
CANADA MORTGAGE AND HOUSING CORPORATION
Source: CREA, CMHC forecasts (F)
2
-
8/10/2019 CMHC Toronto Q4 2014Outlook
5/44
Home Price Growth to Mirror Inflation
9.1%10%
Average MLS Price Growth
7.5%
6.6%
4.8%
7.0%
7.9%
7.0%
5.0%
6.5%
6%
7%
8%
4.3%
2.2%1.8%
2%
3%
4%
.
0%
1%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014F 2015F 2016F
CANADA MORTGAGE AND HOUSING CORPORATION
Source: CREA, CMHC forecasts (F)
-
8/10/2019 CMHC Toronto Q4 2014Outlook
6/44
New Home Sales Slowly Trending Up
50,000
60,000
Low Rise Sales
30,000
40,000
High Rise Sales
10,000
20,000
0
2000M01
2001M01
2002M01
2003M01
2004M01
2005M01
2006M01
2007M01
2008M01
2009M01
2010M01
2011M01
2012M01
2013M01
2014M01
CANADA MORTGAGE AND HOUSING CORPORATION
Source: Realnet Inc.
-
8/10/2019 CMHC Toronto Q4 2014Outlook
7/44
Condominium Apartments to Dominate Housing Starts
50,000
18,00
17,5
30,000
40,000
9,700
8,500
0
0
10,000
,
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014F2015F2016F
Apartment Semi-detached Row Single-detached
CANADA MORTGAGE AND HOUSING CORPORATION
Source: CMHC Starts & Completions Survey, CMHC forecasts (F)
-
8/10/2019 CMHC Toronto Q4 2014Outlook
8/44
Job Market Will Lend Support to Home Buying
Toronto CMAUnemployment Rate (%)
87.9
8.5
9.0
9.5
10.0
.
6.0
6.5
7.07.5
.
5.0
5.5
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014F2015F2016F
CANADA MORTGAGE AND HOUSING CORPORATION
Source: Statistics Canada, CMHC forecasts (F)
-
8/10/2019 CMHC Toronto Q4 2014Outlook
9/44
Employment Growth by Industry
Accommodationandfoodservices
Construction
Business,buildingandothersupportservices
, .
Healthcareandsocialassistance
Publicadministration
Educationalservices
F.I.R.E.
Trade
Professional,scientific
and
technical
services
ransportat onan ware ous ng
Otherservices
Manufacturing
Information,cultureandrecreation
CANADA MORTGAGE AND HOUSING CORPORATION
15.0% 10.0% 5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%
CANADA MORTGAGE AND HOUSING CORPORATION
Source: Statistics Canada
-
8/10/2019 CMHC Toronto Q4 2014Outlook
10/44
Em lo ment rowth b a e rou
120
125
105
110
dex
90
95
100I
80
85
2008Q1 2009Q1 2010Q1 2011Q1 2012Q1 2013Q1 2014Q1
CANADA MORTGAGE AND HOUSING CORPORATIONSource: Statistics Canada
CANADA MORTGAGE AND HOUSING CORPORATION
Renters FTB Repeat
-
8/10/2019 CMHC Toronto Q4 2014Outlook
11/44
Incomes Rising
$913
$900
$950 Avg. Weekly Earn ings, Toron to CMA
$800
$850
$700
$750
$600
$650
CANADA MORTGAGE AND HOUSING CORPORATION
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
CANADA MORTGAGE AND HOUSING CORPORATION
Source: Statistics Canada
-
8/10/2019 CMHC Toronto Q4 2014Outlook
12/44
E uities at All-Time Hi hsTSX 300 Index, 2009-present
$16,000
$18,000
$10,000
$12,000
$14,000
$6,000
$8,000
0
$2,000
$4,000
CANADA MORTGAGE AND HOUSING CORPORATIONCANADA MORTGAGE AND HOUSING CORPORATION
Source: TSX
2009 2010 2011 2012 2013 2014
-
8/10/2019 CMHC Toronto Q4 2014Outlook
13/44
Contributors to USA GDP rowth
5
6
ein
GDP
2
3
NetExports
Investment
Governmentn
tochang
2
1
0
Consumption
Contributi
4
3
CANADA MORTGAGE AND HOUSING CORPORATIONSource: US Bureau of Economic Statistics
CANADA MORTGAGE AND HOUSING CORPORATION
-
8/10/2019 CMHC Toronto Q4 2014Outlook
14/44
New home sales: USA
1,400
1,600
800
1,000
1,200
berofsales
400
600Num
0
CANADA MORTGAGE AND HOUSING CORPORATIONSource: US Census Bureau
CANADA MORTGAGE AND HOUSING CORPORATION
-
8/10/2019 CMHC Toronto Q4 2014Outlook
15/44
Existin home avera e rice: USA
180
190
200
150
160
170
iceindex
120
130
140Pr
100
110
CANADA MORTGAGE AND HOUSING CORPORATIONSource: S&P Shiller Home Price Index
CANADA MORTGAGE AND HOUSING CORPORATION
-
8/10/2019 CMHC Toronto Q4 2014Outlook
16/44
Ontario ex orts oods to destinations
1%Mexico
1%PRC
6%
2%
UK
HongKong
78 %USA
CANADA MORTGAGE AND HOUSING CORPORATIONSource: Government of Ontario
CANADA MORTGAGE AND HOUSING CORPORATION
0% 20% 40% 60% 80% 100%
-
8/10/2019 CMHC Toronto Q4 2014Outlook
17/44
Ontario ex orts to oods
1%Nickel
2%Medications Packaged forRetail
10%
6%
Gold
MotorVehicleParts
28 %Autos
CANADA MORTGAGE AND HOUSING CORPORATIONSource: Government of Ontario
CANADA MORTGAGE AND HOUSING CORPORATION
0% 5% 10% 15% 20% 25% 30%
-
8/10/2019 CMHC Toronto Q4 2014Outlook
18/44
Exchan e rate: USD/CAD
1.00
1.05
0.95
0.90
0.80
0.85
CANADA MORTGAGE AND HOUSING CORPORATIONSource: Bank of Canada
CANADA MORTGAGE AND HOUSING CORPORATION
09/01/2012 09/11/2012 09/09/2013 09/07/2014
-
8/10/2019 CMHC Toronto Q4 2014Outlook
19/44
5Y osted mort a e rate
7.50
8.00
6.00
6.50
7.00
age
4.50
5.00
5.50
Perc
en
3.00
3.50
4.00
CANADA MORTGAGE AND HOUSING CORPORATIONSource: Bank of Canada, CMHC forecast
CANADA MORTGAGE AND HOUSING CORPORATION
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015F
-
8/10/2019 CMHC Toronto Q4 2014Outlook
20/44
Core Consumer Price Index
dex 3.0%
3.5%
changeini
2.0%
2.5%
r-over-year
1.0%
1.5%
Ye
0.0%
0.5%
CANADA MORTGAGE AND HOUSING CORPORATIONCANADA MORTGAGE AND HOUSING CORPORATION
Source: Bank of Canada
2010 2011 2012 2013 2014
-
8/10/2019 CMHC Toronto Q4 2014Outlook
21/44
Outline
Outlook
High Rise vs. Low
Risks to Forecasts
CANADA MORTGAGE AND HOUSING CORPORATION
-
8/10/2019 CMHC Toronto Q4 2014Outlook
22/44
Single-Detached Home Prices Outpacing Others
140
Index (Jan 2011=100)
100
110
120
70
80
90
Singledetached
Townhouse
50
60
Jan2011 Jan2012 Jan2013 Jan2014
CANADA MORTGAGE AND HOUSING CORPORATION
Source: CREA HPI Index for MLS sales, CMHC calculations
-
8/10/2019 CMHC Toronto Q4 2014Outlook
23/44
Condominium Apartments Remain the Affordable Choice
Monthly Carrying Costs
$4,000
$4,500 CondoApartment,5%DownPayment
Singledetached,
5%
Down
Payment
PurposeBuiltTwobedroomApartmentRent
$2,500
$3,000
$3,500TwobedroomRentalCondominiumApartmentRent
$1,000
$1,500
$2,000
Assumptions:
$0
$500
2006 2007 2008 2009 2010 2011 2012 2013
CANADA MORTGAGE AND HOUSING CORPORATION
oron o ea s a e oar ) average s nge- e ac e an con omn um apar men un pr c e. rs me uyer uses e pre- , = r, pre , = r,2008-2010, AM=35, 2011, AM=30, 2012 and after, AM=25) and 5% down payment, and 5-yr lending rate for up to 2010M03. From 2010M04, uses the Chartered Bank conventionalmortgage rate, 5-yr
-
8/10/2019 CMHC Toronto Q4 2014Outlook
24/44
More High Rise Sales Sites
Number of Active Sales Sites
600
400
500
200
300
Low Rise Active Sites
0
100
Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14
High Rise Active Sites
CANADA MORTGAGE AND HOUSING CORPORATIONSource: Realnet Inc.
-
8/10/2019 CMHC Toronto Q4 2014Outlook
25/44
Condos Help Fill Rental Market Supply
30,000
Number of Starts
15,000
20,000
,Condominium Apartment Starts
Rental Apartment Starts
10766
632
5,000
10,000
0
CANADA MORTGAGE AND HOUSING CORPORATION
Source: CMHC Starts & Completions Survey
-
8/10/2019 CMHC Toronto Q4 2014Outlook
26/44
Vacancy Rates to Remain Low Despite Increases in
Average Vacancy Rate (%)
2
2.5
3
.Purpose-Built Rental Apartments
Rental Condominium Apartments
1.9 1.81.9
1
1.5
2
0
0.5
2006 2007 2008 2009 2010 2011 2012 2013 2014F 2015F 2016F
CANADA MORTGAGE AND HOUSING CORPORATION
Source: CMHC Rental Market Survey
-
8/10/2019 CMHC Toronto Q4 2014Outlook
27/44
Prime Renter & FTB Age Categories Show
12.0%
Growth in Employment,Toronto CMA
6.0%
8.0%
10.0% 15 to 24 Yrs
25 to 44 Years
45 to 64 Years
1.8% 1.9% 1.1%
0.0%
2.0%
4.0%
2012 2013 2014
-8.0%
-6.0%
-4.0%
- .
CANADA MORTGAGE AND HOUSING CORPORATION
Source: Statistics Canada, CMHC calculations
-
8/10/2019 CMHC Toronto Q4 2014Outlook
28/44
Growing Long-Term Investor Activity
25.7%30%
Stock of Rental Condominiums
19.2% 18.8%20%
25%
5%
10%
0%
2003 2008 2013
CANADA MORTGAGE AND HOUSING CORPORATION
-
8/10/2019 CMHC Toronto Q4 2014Outlook
29/44
Stronger Price Appreciation for New Condos
$554$550
$600
Average Sale Price Per Square Foot, SA
$455
$400
$450
$500
$200
$250
$300
$350
CANADA MORTGAGE AND HOUSING CORPORATION
Source: Urbanation Inc., CMHC Seasonal adjustment
-
8/10/2019 CMHC Toronto Q4 2014Outlook
30/44
Family Circumstances Will Change During
Sales Launch @ Completion & Unit1.5-2 Years 1.5-2 Years
re-cons ruc on ar o ons ruc on ea y orOccupancy
CANADA MORTGAGE AND HOUSING CORPORATION
Source: CMHC
-
8/10/2019 CMHC Toronto Q4 2014Outlook
31/44
Demographic Support for High Rise Homes
Growth in PopulationBaby Boomers
15.8%
.
16.4%
15.0%
20.0%
.Millennials
2.7%
10.0%
7.7%
5.0%
10.0%
2.7%5.0%
0.0%
-
8/10/2019 CMHC Toronto Q4 2014Outlook
32/44
International Migrants Will Drive Net Migration
120,000
Number of Migrants
60,000
90,000
Net Migration
0
30,000
-30,000
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014f
2015f
2016F
Immigration Interprovincial , Intraprovincial and Non-permanent
CANADA MORTGAGE AND HOUSING CORPORATION
Source: Statistics Canada, CMHC forecasts (F)
-
8/10/2019 CMHC Toronto Q4 2014Outlook
33/44
Record Level of Condos Under ConstructionBut Share of Unabsorbed Units Remains Constant
Share of UnabsorbedUnits at Completion
Number of CondominiumApartments Under
Construction
40,000
50,000
60,000
6%
7%
8%
20,000
30,000
2%
3%4%
0
10,000
0%
1%
2
000
2
002
2
004
2
006
2
008
2
010
2
012
2
014
CANADA MORTGAGE AND HOUSING CORPORATION
Source: CMHC Starts & Completions Survey
Q1
Q1
Q1
Q1
Q1
Q1
Q1
Q1
-
8/10/2019 CMHC Toronto Q4 2014Outlook
34/44
High Level of Condominiums Under Construction willSu ort Stead Pace of Com letions
20,000
Number of Condominium Completions
12
,12
13
,58
13
,3
12
,
14
,94
8
17
,87
8
12
,
14
,47
012,000
14,000
16,000
,
10
,4
09
8,581
3,
1
1,53
3,
187
2,689
1,924
4,8
7,
165 4
,8
08 9
,9
15
9,
7
98
,1
34
1
7,52
8
4 212
389
0,94
2
4,000
6,000
8,000
,
94
07
89
0 8
0
,
CANADA MORTGAGE AND HOUSING CORPORATION
Source: CMHC Starts & Completions Survey
-
8/10/2019 CMHC Toronto Q4 2014Outlook
35/44
.....and In-line With Household Formation
Number of Total Housing Completions
45,000
38,1
21
57 3
6,2
58
6 ,393
33,8
31
,907
3,7
08
,00030,000
35,000
40,000 Average Household Format ion
30,
28,3
531 3
13
15,000
20,000
,
0
5,000
,
2006 2007 2008 2009 2010 2011 2012 2013 2014F
CANADA MORTGAGE AND HOUSING CORPORATION
Source: Statistics Canada, CMHC
-
8/10/2019 CMHC Toronto Q4 2014Outlook
36/44
Can Newly Constructed Condominium Apartments Meet
CANADA MORTGAGE AND HOUSING CORPORATION
-
8/10/2019 CMHC Toronto Q4 2014Outlook
37/44
Low-rise homes still the popular choice:
-
75% of all MLS sales YTD are inlow rise homes in the GTA
55% of all MLS sales YTD are inlow rise homes in the City of Toronto
CANADA MORTGAGE AND HOUSING CORPORATION
Source: TREB
-
8/10/2019 CMHC Toronto Q4 2014Outlook
38/44
Sales of Luxury Homes Driven by Equity
Sales of Single-Detached Homes Priced
$1Mill ion+ as a Share of Total MLS Sales
5%6%
8%
6%
7%
8%
3%
4%
5%
0%
1%
2012 YTD 2013 YTD 2014 YTD
CANADA MORTGAGE AND HOUSING CORPORATION
MLS is a registered trademark of the Canadian Real Estate Association (CREA)Source: TREB
-
8/10/2019 CMHC Toronto Q4 2014Outlook
39/44
More New Low Rise Home Sales in 905 Regions
New High Rise Sales, 2014 YTDNew Low Rise Sales, 2014 YTD
HALTON, 8%
PEEL, 3%DURHAM, 1%
HALTON,
,5%
TORONTO,
YORK, 11%
YORK, 36%
DURHAM,16%
77%
PEEL, 30%
CANADA MORTGAGE AND HOUSING CORPORATION
Source: Realnet Inc.
-
8/10/2019 CMHC Toronto Q4 2014Outlook
40/44
Towns Are the New Singles
6%
6%
7%
Town
Growth in MLS Sales
5%
3%
4%4%
3%
3%
4%
5%Single
2%
0%
1%
2%
-1%-2%
-1%
2011 2012 2013 2014 YTD
CANADA MORTGAGE AND HOUSING CORPORATION
Source: TREB
-
8/10/2019 CMHC Toronto Q4 2014Outlook
41/44
Outline
Outlook
High Rise vs. Low
Risks to Forecasts
CANADA MORTGAGE AND HOUSING CORPORATION
-
8/10/2019 CMHC Toronto Q4 2014Outlook
42/44
Risks To Forecasts
Global pol itical and economic uncertainty
Lower inflow of international migrants
Short-term build up on inventories, especially in the high rise segment
CANADA MORTGAGE AND HOUSING CORPORATION
-
8/10/2019 CMHC Toronto Q4 2014Outlook
43/44
Thank you/Merci
CANADA MORTGAGE AND HOUSING CORPORATION
-
8/10/2019 CMHC Toronto Q4 2014Outlook
44/44
Contact Information
Senior Market Analyst (GTA)
.
Phone:
CANADA MORTGAGE AND HOUSING CORPORATION