Soft Landing Still Likely for Canadian Condo Market

Genworth Canada Releases Summer 2014 Metropolitan Condo Outlook 
TORONTO, Aug. 13, 2014 /CNW/ - Population, economic and employment growth all 
point to a stabilizing of the Canadian condominium market, according to the 
latest Conference Board of Canada condo report commissioned by Genworth 
Canada.  The Summer 2014 Metropolitan Condo Outlook forecasts that while 
pockets of higher risk still exist in Toronto and Vancouver, a broad-based 
downturn is unlikely. 
"The report findings align with our view that the condo market is stabilizing 
and that demographics and affordability continue to drive demand" said Stuart 
Levings, Chief Operating Officer of Genworth Canada.  "As a result of our 
prudent underwriting standards, our portfolio quality in this market remains 
strong and we see value in partnering with our customers to meet the evolving 
needs of young urbanites. 
Despite modest price gains over the next two years in all eight cities studied 
in the report, increases in average household incomes will help to keep 
mortgage costs affordable.  Continued growth in immigration, affordability 
pressures in major cities, and aging baby-boomers looking to downsize are all 
factors that support continued demand for condominiums in urban centres. 
"Our research has long shown that the strong underlying economic factors in 
Canada would help most condominium markets achieve a 'soft landing'" said 
Robin Wiebe, Senior Economist at the Centre for Municipal Studies at The 
Conference Board of Canada and co-author of the report.  "Despite fluctuating 
sales and listing trends, markets are expected to be balanced across the 
country, with a slight lean towards the buyer in Ottawa, Montreal and Quebec 
City." 
To view infographic of national highlights click here. To view infographic of 
regional highlights click here. 
Regional Highlights 


    --  Québec City's stronger economy is expected to stabilize sales
        of existing condominiums this year and then lift them in 2015,
        while condominium starts are expected to fall for the second
        straight year in 2014; lower inventories of unsold new units
        should bring builders back to the market in 2015.
    --  Montréal's condo unit resales are expected to decline in 2014,
        before bouncing back in 2015, while rising inventories of
        unsold new condos will slow the pace of construction
    --  Ottawa's condo resales are expected to improve in 2015 and
        continue rising for several years. Meanwhile condo starts will
        be flat in 2015 and then rise gradually
    --  Toronto's condominium market will cool slightly but avoid the
        collapse many fear due to healthy population growth, a solid
        economy and the desirability of downtown living
    --  Calgary enjoys excellent condo affordability due to its healthy
        average household income (the highest of all eight cities
        studied) and relatively modest condo prices. The city's good
        economy is boosting near-term resale volumes and price growth
        while ongoing economic and income growth will maintain
        Calgary's housing requirements over the following years.
    --  Edmonton's strong economy lifted condo sales sharply in 2013
        and will keep them growing modestly over the next few years.
        While condominium starts are forecast to pull back in 2014,
        following very large jumps in 2012 and 2013, they are expected
        to grow moderately over the rest of the outlook
    --  Vancouver's condominium market is recovering along with the
        overall resale market, although slowing offshore demand
        threatens to expose the area's poor housing affordability.
        Condominium resales will grow modestly throughout the
        medium-term, as will starts after they stabilize this year.
    --  Victoria is expected to see both transactions and prices grow
        in the resale market over the next few years after enduring
        several years of decline; meanwhile, falling starts and
        completions this year will begin trimming new-unit inventories,
        setting the stage for modest starts growth.

Resale prices for condominiums are expected to rise in both 2014 and 2015 in 
all eight cities studied. In both years, Calgary will see the largest growth 
at 6.6 and 3.5 per cent, respectively, and Montreal the lowest at 1.0 and 1.7 
per cent.

Median Resale Condo Price by City: Forecast 
    City            2013    2014f   2015f
    ----            ----    -----   -----
    Québec City $225,185 $227,466 $231,909
                     2.0      1.0      2.0
    Montréal    $264,478 $267,109 $271,769
                    -1.0      1.0      1.7
                    ----      ---      ---
    Ottawa      $259,171 $263,811 $269,852
                    -4.5      1.8      2.3
    Toronto     $308,729 $316,744 $321,540
                     1.1      2.6      1.5
                     ---      ---      ---
    Calgary     $254,633 $271,463 $280,975
                     4.2      6.6      3.5
    Edmonton    $217,288 $225,212 $232,619
                     3.2      3.6      3.3
                     ---      ---      ---
    Vancouver   $367,688 $374,051 $383,434
                     0.4      1.7      2.5
    Victoria    $268,321 $279,027 $290,261
                    -0.1      4.0      4.0
                    ----      ---      ---
    Italics indicate percentage
     change from previous year.
    Sources: The Conference Board
     of Canada; CMHC
    Housing Time Series Database;
     Canadian Real Estate
    Association; Québec Federation
     of Real Estate Boards.
    Average resale prices are used
     for Québec City and
    Montréal; median resale prices
     are used for the rest of
    the metropolitan areas. Resale
     prices in Montréal and
    Québec City cover all condo
     styles, not just apartments.

The Metropolitan Condo Outlook is commissioned by Genworth Canada from the 
Conference Board of Canada. The Report reviews a wide range of condominium 
statistics and offers an in-depth analysis of the trends in the condominium 
market for eight large Canadian metropolitan areas: Québec City, Montréal, 
Ottawa, Toronto, Calgary, Edmonton, Vancouver and Victoria. A copy of the 
report is available at 
http://genworth.ca/en/about-us/about-us-publications.aspx.

About Genworth Canada Genworth MI Canada Inc. (TSX: MIC) through its 
subsidiary, Genworth Financial Mortgage Insurance Company Canada (Genworth 
Canada), is the largest private residential mortgage insurer in Canada. The 
Company provides mortgage default insurance to Canadian residential mortgage 
lenders, making homeownership more accessible to first-time homebuyers. 
Genworth Canada differentiates itself through customer service excellence, 
innovative processing technology, and a robust risk management framework. For 
almost two decades, Genworth Canada has supported the housing market by 
providing thought leadership and a focus on the safety and soundness of the 
mortgage finance system. As at June 30, 2014, Genworth Canada had $5.7 billion 
total assets and $3.3 billion shareholders' equity. Find out more at 
www.genworth.ca.



SOURCE  Genworth Canada 
or to arrange interviews, please contact: Lisa Azzuolo, Director, 
Communications, Genworth Canada, 905.287.5520 or Lisa.Azzuolo@genworth.com 
To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/August2014/13/c3832.html 
CO: Genworth Canada
ST: Ontario
NI: ECO ECOSURV  
-0- Aug/13/2014 10:00 GMT
 
 
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