"October's annual rate of housing starts, highest since March 1990, is evidence that the housing industry is benefiting from strong employment growth and low mortgage rates this year," said Michel Laurence, Chief Economist at Canada Mortgage and Housing Corporation's Market Analysis Centre. "The increase in the annual rate of housing starts in October relative to September, which was broadly-based across the country, suggests housing and other related industries will remain positive factors for Canadian economic growth in the fourth quarter."

Real estate companies see this strength translating into continued price increases in 2003.

“Low borrowing costs, strong employment growth, and confidence in real estate as an investment are all factors that are expected to positively contribute to healthy market conditions in 2003," says Pamela Alexander, CEO, RE/MAX Ontario-Atlantic Canada, referring to the recently-released RE/MAX Housing Market Outlook 2003 report that indicates Canadian homeowners should realize significant equity gains next year as pent-up demand builds in major centres across the country.

"The limited number of homes listed for sale is the wild card. Today´s lack of inventory will translate into intensified pressure on housing unit sales and prices tomorrow."

As 2002 draws to a close, housing inventory levels are reportedly low in Vancouver, Calgary, Toronto, Ottawa, Montreal, Halifax, and St. John´s.

Compared with a year ago, active listings have dropped 9 per cent in Vancouver and a dramatic 29 per cent in St. John´s. In Toronto, where active listings are down approximately 20 per cent, condominium construction is at peak levels with 24,000 units scheduled for completion by year-end 2003. Given the tremendous number of condominiums coming on-stream, most of the new listings, particularly in the central core, are condominiums.

"Purchasers are experiencing great difficulties finding homes in major Canadian cities," says Alexander. "There´s no question that if demand continues to outpace supply across the country, we could see even greater increases in average price."

The RE/MAX Housing Market Outlook 2003 predicts an increase of close to 10 per cent in the Canadian average price, bringing the national average to just over C$207,000. Home sales, however, are expected to slip marginally from record 2002 levels, settling in at 384,400 units.

Buyers who want to jump into the housing market may get some financial help from the Canada Customs and Revenue Agency's Home Buyers' Plan (HBP). This federal program allows Canadians to withdraw up to C$20,000 from their RRSPs tax-free to buy or build a qualifying home without losing RRSP benefits. Even if you have used the Home Buyers' Plan in the past, you may be eligible.

To preserve the role of your RRSP in providing funds for retirement, you have a period of up to 15 years to repay the withdrawal. Each fall, the CCRA will send you a statement indicating the amounts you have repaid, the amount you have to repay for the next year and the total still unpaid. If, in any year, you do not repay the amount required for that year, that amount will be included in your income for that year.

For more information about this and other Home Buyers' Plan topics, read the pamphlet called "Home Buyers' Plan" from the International tax services office. Form T1036 explains which conditions you must meet to qualify under the Plan.

Details matter to CCRA, so make sure you follow the rules carefully to take advantage of the tax breaks involved.

Published: November 26, 2002

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Strategist and Futurist is The Catalyst -- intent on "Helping The Best Get Better." An internationally-recognized "new retirement" authority, PJ's research, writing and speaking programs focus on decisions Baby Boomers face to achieve a successful future. Author of 6 books, PJ knows that, since home is headquarters for the "new retirement," professionals and consumers need relevant knowledge and insights, along with solid decision-making skills, to protect and enhance this private oasis. As The Catalyst, PJ provides strategic communication, client appreciation and advanced education services to the financial, tourism, lifestyle and service sectors -- and the clients they serve. A frequently quoted financial and business commentator, PJ is a thought-provoking strategic speaker who offers practical, real-life suggestions on leaving "the box" behind and embracing Forward Thinking -- a talent she regularly demonstrates in this column. For more, visit TheCatalyst.com.