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Housing steady as she goes

By Bob Vrbanac

The talk has been that Canada faces a fiscal cliff, depending on how our neighbours to the south deal with their impending political impasse.

If newly re-elected President Barack Obama can’t work out a compromise with the Republicans in the House of Representatives, it could plunge the U.S. economy, and by extension the Ontario and Canadian economies, into recession.

Well, representatives from the Canada Mortgage and Housing Corporation were in Kitchener Thursday to allay some of those concerns.

Ed Heese, an economist who works for the national housing agency, told a packed room at Bingemans that saner heads will prevail.

In fact, he dispelled some of the doom and gloom about the U.S. economy and economic growth, saying that the private sector is starting to make the recovery more sustained with our next door neighbours. And with more than 75 per cent of the Ontario economy still dependent on U.S. trade, that is good news for this area in particular.

Manufacturing still represents 22 per cent of economic activity in Waterloo Region, and despite reports of its demise has actually been growing during the past year.

That growth will be even stronger by late 2013, which is good news for employment. And employment is still the biggest driver in housing demand.

The employment picture, plus the relative affordability of mortgages and no major rate hikes expected over the next five years, and Heese predicted the local housing market will be balanced over the bulk of 2013.

What does that mean? Well, for all of you worrying the housing bubble was about to bust, as is already happening in places such as Toronto and Vancouver, the CMHC predicted price growth in this region of at least one per cent over the next year.

While that isn’t earth shattering, it suggests Kitchener will have a balanced market and that demand will match supply.

Erica McLerie, another senior market analyst who was discussing housing trends on behalf of the CMHC, in fact predicted that home construction and sales will improve in the second half of 2013 as employment conditions improve.

Right now homes sales in the region are a bit down, but the good news is that everything is in balance.

There is no burst housing bubble predicted in Kitchener and area’s near future. The best way they described the next year in Waterloo Region is slow and steady growth.

And that  would be just fine for those of us who would like to tune out the doomsayers.

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