Ontario’s existing home market is forecasted by the CMHC to have a near record year as high new
detached home prices, more choice in the resale market and residential land constraints will drive activity
in the existing home market.

Growth in Ontario’s economy will lag behind the Canadian average. Ontario economic
growth will drop to 1.8 per cent this year before rising to 2.4 per cent in 2009. Growth
will be down from a ten year annual average of 3.5 per cent. Ontario’s goods sector,
particularly auto assembly, auto parts and forestry, will continue to weigh on growth through the first half
of 2008 due largely to slower U.S. economic growth and a high Canadian dollar.

The goods sector will continue to downsize its workforce, however, some of these workers will be taken in by stronger consumer driven services. Low interest rates, healthy consumer confidence and rising incomes will support consumer spending, domestic demand and growth across the province. The economic growth gap between the west and Central Canada will narrow. Ontario’s population growth will be largely driven by international migration, even though Ontario’s share of international migration has dropped recently relative to the rest of Canada.

After record sales activity in 2007, Ontario existing home sales will move slightly lower to 208,000 in 2008 and 201,500 unit sales 2009 . While rising mortgage carrying costs will dampen home sales, more choice across broader price ranges will keep resale volumes well above historical norms.

The average MLS price in Ontario will rise by 6.2 per cent and 2.9 per cent in 2008 and 2009 respectively.
Price growth will be running above inflation in the immediate term thanks to tighter resale market
conditions. However, a more balanced resale market resulting from higher listings points to weakening
price pressures longer term.

Average
Residential Resale
Price

Mortgages
approved by
lenders, residential
2006

Life and
companies
other

Source: Stats Canada, CMHC
2007 E = estimated by the CMHC
* Canada calculation excludes Yukon and Northwest Territories
Data based on application received date
Mortgage approval data are gross and may not fully capture lending activities of credit unions, caisses populaires, other smaller
institutions and privately-insured loans in some areas
Quebec data is understated due to low response rate to the surveys in that province.
*Conventional Lending data only