Spring housing market bounces back

Posted: March 9, 2010 in Buyers, General Information, Sellers
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The Canadian Press

MONTREAL — Young Canadians are expected to give a boost to Canada’s housing market this year as more of them tie the knot, get full-time jobs, and see those opportunities as major reasons to take the plunge and buy a home.

A new study by the Royal Bank suggests that younger Canadians aged 18-to-24 are about to take the market by storm, with about 15 per cent of those surveyed in that age bracket saying they are very likely to buy — almost double the level recorded in 2009.

It’s a marked shift in the attitudes of younger Canadians, who have tightened their budgets over the past few years to cope with tough jobs markets and a recession.

The latest survey shows that overall attitudes are changing as more Canadians return to shopping for homes as the economy recovers, even though it’s considered a seller’s market.

“Confidence in the housing market is back, essentially,” RBC senior economist Robert Hogue said Monday.

Royal Bank said the study found more Canadians are “very likely” to buy a new home in the next two years.

Ten per cent of the 2,047 people of all ages surveyed for the 17th annual RBC home ownership study said they plan to buy a home within two years — up from seven per cent two years ago.

“At this stage last year, there was doom and gloom all around and it definitely affected the housing market,” Hogue said from Toronto.

“As we see more jobs being created and more and more evidence that the recovery is taking hold, and being a reasonable one at that, then it might be another reason to keep the housing market going for a bit.”

Hogue said exceptionally low mortgage rates and improved affordability have been key reasons for the housing resurgence thus far.

More evidence of that resurgence came Monday in the latest housing start numbers from the Canada Mortgage and Housing Corp. It said the seasonally adjusted annual rate of housing starts reached 196,700 units in February, an increase from 185,400 in January.

In the Kitchener census metropolitan area, housing starts increased on a year-over-year basis for the fifth month in a row.

Builders poured foundations for 168 housing units in February, up from 103 a year ago. They started 92 single-detached homes, up from 45 a year earlier.

“A tight resale home market and low interest rates have encouraged homebuyers to consider the new home market,” Edgard Navarrete, the housing corporation’s market analyst for the Kitchener census metropolitan area, said in a news release.

“Any increase in demand for new homes must be met by new construction, as new home inventories are low,” he added.

Kitchener was the busiest local market in February with 104 starts, more than double the 44 recorded a year ago. There were 31 starts in Waterloo, 24 in Woolwich Township, eight in Cambridge and one in North Dumfries Township.

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