Mortgage rates are expected to remain within 25 to 75 basis points of their current level for the remainder of 2009, according to CMHC’s second quarter Housing Market Outlook, keeping them “very low in a historical context.”

“Movements in mortgage rates are difficult to predict due to volatile economic conditions,” the report stated.

“Nevertheless, rates are expected to remain steady this year and edge higher in 2010.”

Along with mortgage rates, CMHC listed employment, net migration and low birth rate as having key effects on residential construction, and forecast housing starts to decline to 141,900 in 2009 (most notably in Alberta and Saskatchewan) before rebounding to 150,300 in 2010.

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In one of my volunteer positions on a board of directors, we have to vote annually on the salaries of the executive team of the organization. I cannot imagine these people voting on their own salary. It would not be right. I trust that they would do the right thing; I’m just not sold on people voting on their own pay. I do agree with Peter Near’s comments but I cannot agree with the policy of establishing one’s own pay. There are better ways to accomplish a fair pay structure for politicians at any level of government.

I also find myself wondering if there is any end to the game of pay parity with other municipalities. This smells of being a self-serving fantasy that does nothing to control salaries, and provides endless justifications for raising them.

Yes, everyone deserves a fair pay. No, if wages are slightly better somewhere else, these folks aren’t going to jump ship and go work for another municipality that isn’t hiring anyway.

It’s time for a better system. 

For more discussion, visit Mike Cluett’s blog . . .

Intensification, rent control changes and shortage of stock give rise to new projects

It’s hard to imagine a more challenging time for business and markets than the past half year.

With consumers running for cover and the international banking system imploding, what were developers and builders to do?

If you were Brian McCauley, executive vice-president of Vancouver-based Concert Properties, you were negotiating a deal with Diamante Development Corp. worth close to $20 million to acquire a condo site with approvals in place at Bay and Dundas Sts. His company will build the 26-storey, 448-unit project as a high-end rental.

“From a global perspective, Toronto is still a very strong marketplace in spite of the current softening that we’ve all experienced across Canada,” McCauley comments.

It also must be encouraging that Toronto’s apartment vacancy rate is at a seven-year low of 2 per cent, according to Canada Mortgage and Housing Corp. data, while vacancy rates for the subcategory of rented condos, representing newer apartment stock with substantially higher rents, is a microscopic 0.4 per cent, with rents almost 50 per cent higher than those in aging rental buildings.

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