######################################## #Written by David Tam, 1999. # #davidkftam@netscape.net Copyright 1999# ######################################## From tamda@ecf.toronto.edu Mon Jul 12 18:22:57 1999 Date: Mon, 1 Feb 1999 13:59:25 -0500 (EST) From: David Kar Fai Tam To: APS 424S Subject: #9-02/02/99-"25% plan to buy home in 2 years: survey" The Globe and Mail, Wednesday, January 27, 1999. B6. This article reports on a survey result showing that the housing market looks pretty bright in the near future. According to a survey, 25 % of Canadians planned to purchase a home within the next 2 years. Almost 40% of those between the ages of 25 and 34 are planning to do so. BC, Alberta, and Ontario will see most of the benefits. As well, the sale of new homes for the Greater Toronto Area hit a ten year record high in 1998. These conditions are encouraged by low interest rates, which means it costs less to take out a mortgage and buy a new house. Also, the announced provincial and federal income tax cuts will help increase disposal income and further encourage the housing market. I believe that housing market activity can provide a fairly general sign of how the economy is doing. It's a very good sign that so many Canadians are thinking about house purchases in the near future. It means they have had steady employment, have saved quite a bit a money, have a high standard of living, and have a high level of disposal income. Acting much like the construction index, which shows actual construction statistics, this indicator probably is a good indicator of future economic trends rather that immediate trends. If Canadians plans two years in advance, they are predicting fairly rosy pictures and believe the economy will remain good. The construction and purchase of new homes drives quite a bit of the economy. For instance, furniture and various services will become higher in demand. Construction of related infrastructure also increases, industries providing raw construction materials will increase, new businesses to support the new housing developments will be started, etc. This type of housing activity triggers a lot of other economic activity. This will mean good news to the Canadian businesses. In terms of demographics, there is probably a lot of useful marketing information that can be extracted. Trends due to more family living in houses rather than rented apartments, may mean changes in consumer buying habits. Smart Canadian entrepreneurs and existing business will realize new opportunities due to these changes.