"The relationship between average price and income has recently been cited as portending a U.S.-style correction in Canadian home prices," said Gregory Klump, Chief Economist, CREA. "However, such warnings ignore the longer-term relationship between prices and income, and disregard typical Canadian housing market cycle dynamics."

Home prices tend to rise in cycles, characterized by periods of sharp growth and periods of stability. By contrast, income generally follows an orderly upward trend over time. For home prices to keep pace with incomes, they must rise faster during housing booms to make up for periods of little or no price growth. Canadian home prices were stagnant throughout most of the 1990s, while incomes continued rising, making housing more affordable. Over the past decade, home prices have climbed sharply as mortgage interest rates declined.

Klump adds: "The Canadian housing market is now widely thought to be at, or very near, the top of a cycle, and the ratio of home prices to incomes is currently high. This ratio will revert to its long-term average as it always does as part of a normal housing market cycle. History suggests, however, that it will not do so by means of a significant correction in home prices. The more likely scenario is that home prices will stabilize, giving incomes a chance to catch up again."

The correction in U.S. home prices has sparked fears that Canadian home prices may share a similar fate. However, according to Klump, "warnings to this effect ignore solid Canadian mortgage market trends."

Conservative lending practices in the mortgage industry combined with prudent borrowing and accelerated payments among Canadian mortgage holders have been seen throughout the recent housing market cycle. Accelerated accumulation of home equity will provide options for the small proportion of homeowners who may face financial difficulty when their mortgage is renewed at a higher interest rate. These trends are expected to help Canada avoid a U.S.-style housing crisis.

The correction in U.S. home prices is set against a massive oversupply of homes due to distress sales, combined with a drop in housing demand due to unemployment. The unwinding of the housing boom in Canada will be more orderly, characterized by softening sales activity and stable prices.

About The Canadian Real Estate Association The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 99,000 real estate Brokers/agents and salespeople working through more than 100 real estate Boards and Associations.

For more information contact:
Alyson Fair 613-237-7111 or
613-884-1460
Email: afair@crea.ca

Creating Low Maintenance Eco Friendly Lawns (NC)


Mowing is important to maintaining a healthy lawn and electric mowers are the easiest to maintain and the ecological choice as they have no emissions.

by Carson Arthur of HGTV

Most Canadians find that lawn care can be a challenge. However, there are simple ways to having a green lawn without the struggle. All you need is a basic understanding of how a lawn works, the right equipment, and a few tips on lawn care.

The first step to ensuring your lawn will stay green all season long is to check where your grass is growing. Is it in the shade of a tree or in the hot sun all day? A simple tip is to seed the right type of grass for each area. Red and Sheep Fescue grasses are excellent for shady parts, while Perennial Rye Grass and Tall Fescue grass blends are perfect for hot sunny areas. For more information on different types of grass seed check your local garden centre.

The second step is often the least favourite: mowing. However, it doesn't have to be. There are plenty of new mowers out there that make the activity more enjoyable. Take a close look at your current machine and if it's hard to push, loud, and spits out a cloud of smoke each time you start it, consider purchasing a new unit. Electric mowers are the easiest to maintain and the ecological choice as they have no emissions, so it's better for you and the environment. As well, electric mowers are silent making them perfect for an early morning mow, without waking up the neighbourhood. My personal favourite is the new 36V cordless mower from Black & Decker. Cordless mowers are great as you don't have to worry about extension cords and the 36V battery has enough power to cut most lawns on a single charge.

Mowing is important. Grasses are like most plants; if you clip off the growing points they will produce new shoots and become denser. The growing point for grass is in the crown where the new leaves develop. Cutting the crowns will turn thousands of individual grass plants into a tightly woven turf or lawn. The best clipping height is approximately 2” to 2½ ”. You can determine your blade height by placing your mower on the sidewalk and measuring the distance between the blades and the ground. Cutting the grass too short will make it susceptible to weeds, disease, insects and drought.

Along with proper cutting techniques, watering is essential to keeping your lawn green and healthy. My favourite watering tip is to provide no more than 1" of water per week. It's easy to measure with a large margarine container, just make sure the container is under the sprinkler so that it's an accurate measurement of the water on the grass. If you keep your grass cut to the suggested length, it will not need to be watered until the end of June. But a lawn that is cut too short needs be watered more often to compensate for the loss of leaf surface.

Carson Arthur is best known as HGTV's landscaping host from Green Force and Global's Room to Grow. He focuses on creating harmony between urban needs and ecological choices.