Canadians remain confident in housing market: survey

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Canadians overall are not influenced by the speculation that the Canadian
economy will be negatively affected by the U.S. economic downturn,
according to a report released today by the Canadian Association of
Accredited Mortgage Professionals (CAAMP). According to the report,
Canadians have shown themselves to be keen observers of the fallout from
the subprime mortgage meltdown south of the border. Awareness of the U.S.
housing crisis is up from last year, as only 11% of those surveyed said
they were not at all aware of the U.S. housing crisis, compared with 22%
who were in the dark in the fall of last year. When it comes to choosing
the best time to purchase, the survey results were mixed. One-third of
respondents said now was a good time to buy a house, one-third said it was
not a good time and the final third were neutral. "This report indicates
mortgage consumers are educated, informed, and attuned to local market
conditions," said Jim Murphy, president and CEO of CAAMP. "Canadians are
aware of the strength of the economy and remain confident in our housing
and mortgage markets." The most positive attitudes are in the Atlantic
region, the survey showed, where 49% of residents feel it is a good time to
purchase a home. Meanwhile, in western Canada, consumers are making
decisions based on rising housing prices and deteriorating affordability.
For example, 70% of Saskatchewan residents have reacted to the province's
current hot housing market and felt it was not an appropriate time to
purchase a home-which is even higher than the 60% who held this view in the
Fall of 2007. Canadians have yet to react to suggestions that the economy
will soon start feeling the impact of higher energy and food prices, and
that Ontario is hovering close to a recession, according to the CAAMP
survey. "Job creation in Canada is still very strong. Moreover, the housing
market doesn't respond immediately to swings in employment; it takes people
time to react to changes in personal circumstance," said CAAMP chief
economist Will Dunning. "Even if recent forecasts are right and the labour
market in Canada should start to weaken, momentum from past job creation
should result in continued strong housing demand well into 2009," he added.
Alternative mortgage products, including longer amortization periods, no
down-payment mortgages, and interest-only mortgages, continue to grow in
popularity in Canada. In 2007, CAAMP found that 37% of recent home
purchases had been funded with extended amortization mortgages. In the
current survey the most positive opinions are held by people who are most
likely to be in a position to use extended amortization products - renters
looking to buy. Younger Canadians looking to become first-time home owners
are most interested in alternative mortgage products and while cautious and
conservative, they are optimistic about the overall future of these
options. "CAAMP members are committed to working with consumers to ensure
they have the mortgage solution that is affordable and best suited for
their unique needs," said Andrew Moor, chairman of CAAMP. In addition, the
report says that the arrears rate for residential mortgages remains close
to the very low levels that have held since mid-decade, about one quarter
of a percentage point. Canada has certainly not experienced the sharp
increase in arrears and defaults that has occurred in the United States. As
well, CAAMP reports that the mortgage market and volume of mortgages
outstanding continues to expand. More than 11% growth is forecast for 2008
for a total of $913 billion, up from $821.5 billion in 2007. With this
growth comes a shift in mortgage lending activity. Residential mortgages
are provided by a wide variety of lending institutions, ranging from the
chartered banks to credit unions, caisses populaires, and insurance
companies, among others. "Mortgage brokers are fast becoming a trusted
source and are growing in popularity with first time buyers and
increasingly with other consumers," said Moor. "More than one-third of
mortgage transactions for new homeowners came through brokers." The report,
"Housing and Mortgage Market Trends in Canada," was authored Dunning and is
based on information gathered by Maritz Research in an online survey
conducted in April 2008.

Lee Politano
Manager Residential Mortgages
TD Canada Trust
Tel 780 264-1749
www.tdcanadtrust.com/msf/leepolitano
"Making the impossible...POSSIBLE!!"

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