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Busy spring real estate market expected

March 29, 2012 Bidding Wars, First Time Buyers, General Real Estate, Move Up Buyers, National Real Estate, Toronto Real Estate

The Canadian Press

Major Canadian housing markets have continued to show “exceptional resiliency” so far this year, setting the stage for a busy spring, according to a major Canadian real estate organization.

In its market trends reports, Re/Max said its survey has found that 12 of 15 Canadian centres, or 80%, reported sales activity in January and February that was ahead of last year’s levels.

More than half of the cities reported double-digit increases, “with the strong demand and diminished supply setting the stage for a heated spring 2012.”

Re/Max said low interest rates, coupled with strong consumer confidence levels and a mild winter played a significant role in the upswing, ushering in an early start to the spring market.

Average prices climbed in 14 of 15 markets, with three markets — Toronto, Winnipeg and St. John’s, N.L. — posting gains in excess of 10%.

However, tighter inventory levels at entry-level prices have sparked bidding wars — particularly in the Winnipeg and the Greater Toronto Area — with similar conditions starting to emerge in Saskatoon, Regina, London-St. Thomas, Hamilton-Burlington, Ottawa, St. John’s and Halifax-Dartmouth.

Comment: In Toronto, we are seeing an average sale price that is 100% of asking. We are also seeing fully 50% of houses in the $600-900,000 range going for OVER asking. Demand is so far ahead of supply right now, this is the tightest sellers market I have ever seen.

“Given the current economic climate, the strength of the country’s housing market clearly reflects the value Canadians place on home ownership,” said Michael Polzler, executive vice-president of Re/Max.

In terms of sales volumes, the best performing markets heading into the traditionally busy spring period were Halifax-Dartmouth, up 35%, Saskatoon (21%), Saint John, N.B., (20%), Regina (16%), St. John’s (12.5%), Greater Toronto Area (12%) London-St. Thomas (11%) and Edmonton (11%).

Only Vancouver, Kitchener-Waterloo, and Winnipeg have experienced softening in housing activity so far this year. Sales are down 16% in the Greater Vancouver, 4.5% in Kitchener-Waterloo, and Winnipeg down 0.2%.

Meanwhile, despite expectations of continuing strong sales, price gains are likely to be “much more moderate that in years past,” said Elton Ash, regional -vice-president for Re/Max in Western Canada.

Comment: What? 14 of 15 cities have prices moving up (but for Vancouver, which is a different story entirely) with 3 – 20% – showing gains of 10% or more. We have 12 of 15 cities with higher sales volume than last year. And we are going to a moderate price growth this year? I don’t think so…

“We expect this will remain the trend moving forward, in line with the Canadian economy, as GDP growth also moves ahead at a more subdued pace.”

However, Ash said local conditions vary, with inventory shortages driving prices in some markets while others, such as in the case of Saskatchewan and Newfoundland, the local economy has shown extraordinary strength.

“On the whole, this is a very stable and healthy housing market in line with traditional norms, with few exceptions,” he said.

Re/Max said first-time buyers have been driving demand in both the smaller and major markets, in turn sparking strong sales activity among move-up purchasers at higher prices.

“As a result, the upper-end of the market has also held up well. There’s no question that the spring 2012 market will see all segments working in tandem.”

Comment: It is only low supply that will keep 2012 from breaking sales records in Toronto, trust me. And if we do not see price gains in the 8-10% range, I will eat my hat. Or your hat… I don’t wear a hat…

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Contact the Jeffrey Team for more information – 416-388-1960

Laurin & Natalie Jeffrey are Toronto Realtors with Century 21 Regal Realty.
They did not write these articles, they just reproduce them here for people
who are interested in Toronto real estate. They do not work for any builders.
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Canadian housing boom among longest in Western world

December 27, 2011 National Real Estate

Steve Ladurantaye – Globe and Mail

Canada’s housing boom is among the most long-lived in the Western world at 13 years, but the next few years could chip away at the gains that have seen the average house increase in value by 85% since 1998.

In a report released Tuesday that said the Canadian housing market was the strongest in the developed world in the third quarter, Bank of Nova Scotia economists said “the slow pace of the global economic recovery, intensifying sovereign debt concerns, weak consumer confidence and high unemployment all continue to weigh on residential property markets” in 10 countries it tracks.

The malaise has already set in – of the 10 countries studied in the third quarter, average inflation-adjusted home prices were below year-ago levels in seven of them, and above in three (including Canada, where prices are 4.8% higher).

The other countries to post gains were France at 4.4% and Switzerland at 3.3%. The sharpest declines, meanwhile, were seen in Ireland were prices were down 14.7%.

“Canada remained a notable outperformer, though activity here too shows some signs of cooling. Weak market conditions will likely persist well into 2012,” economist Adrienne Warren wrote.

“While the combination of low borrowing costs and lower home prices have bolstered housing affordability, there is insufficient domestic momentum in the majority of advanced nations to support a significant revival in demand. An oversupply of housing and a more cautious lending environment also will hold back the recovery.”

Merrill Lynch warned Monday that prices could correct by as much as 10% in the next two years in Canada because of weakness in the economy, expressing particular concern about Toronto’s condo market. The Bank of Canada also warned the Toronto market looks overbuilt and could see prices drop.

Comment: Bah, same old thing we have heard since 2003. Trust me, this is what I do every day, the Toronto condo market is in no danger whatsoever. It is now the rental market, 80-90% of renters are in condos now, instead of apartment buildings. And vacancy rates are as low as 3% these days. The investors are rather pleased.

“The cycle of rising real home prices is long, lasting on average 12 years,” Ms. Warren wrote. “Italy’s boom was the shortest at 8 years, while Ireland and Sweden count 15 years. Canada’s ongoing housing boom is in its 13th year… Canada’s residential real estate boom started several years later than many of its counterparts, with the economy still feeling the effects of the deep recession of the early 1990s and weak labour markets through mid-decade.”

From the report:

* “The Canadian housing market remains an outperformer among advanced nations, with real home prices up 4.8% y/y in Q3. While the sector’s continued buoyancy is impressive, monthly data through November suggest prices have leveled off since the spring, with conditions in the majority of local markets in ‘balanced’ territory. Ultra-low interest rates are still attracting buyers, but increased economic uncertainty combined with some recent slowing in the pace of hiring could dampen demand in the new year.

* In the United States, average inflation-adjusted home prices fell 7.5% y/y in Q3, bringing the cumulative decline since the 2005 peak to over 30%. Despite near-record affordability, persistently high unemployment, tight credit conditions and a lingering oversupply of unsold and foreclosed properties suggest a sustainable recovery could still be several years away.

* The French housing market remains the most resilient in Europe. Average inflation-adjusted home prices were up 4.4% y/y in Q3, and are nearing pre-crisis record highs after a brief downturn in 2008-2009. Tight housing supply is underpinning prices, but these continuing gains appear unsustainable in an environment of high unemployment, government restraint and slowing regional exports.

* Switzerland’s housing market also remains relatively buoyant, with average prices up 3.3% y/y in Q3.

* Ireland still holds title to the weakest residential market in our sample, with average inflation-adjusted home prices down 14.7% y/y in Q3 and by a cumulative 44% from their early 2007 highs. The steep and continuous price declines of the past four years have essentially wiped out a decade of price appreciation.

* U.K. house prices are declining again after a brief recovery in 2010. Real home prices have contracted on a year-over-year basis for the past three quarters, falling 6.7% y/y in Q3. Spain’s deep housing slump continues, with average prices down 8.9% y/y in Q3 and almost 25% from their early 2007 peak.

* Prices have also recently dipped into negative year-over-year territory in Sweden, consistently one of the region’s better performing housing markets.

* In Australia, average inflation-adjusted home prices fell 5.7% y/y in Q3. Even so, the slowdown follows strong gains in 2010, leaving prices near record levels. While domestic economic conditions remain relatively solid, some potential buyers have been sidelined by deteriorating housing affordability and a more uncertain global outlook.

* There is still no end in sight to Japan’s two-decade long property slump, with residential land prices down 3.3% y/y in Q3.”

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Contact the Jeffrey Team for more information – 416-388-1960

Average home price rises 6.5% to $352,600

October 18, 2011 Buying Real Estate, General Real Estate, Mortgages and Financial Information, National Real Estate

CBC News

Higher sales in a number of major markets, most notably Toronto, helped push the average price of a Canadian home up 6.5 per cent in September compared with a year earlier.

The Canadian Real Estate Association said Monday the average price for a Canadian home sold in September was $352,600. In June, the average was $372,700.

Market watchers say the national average price in the spring was being skewed upward by sales in some expensive Vancouver and Toronto neighbourhoods.

The 6.5 per cent annual gain is the smallest since January.

CREA stats show the average selling price in September fell by a seasonally-adjusted 0.4 per cent from the month before. Big month-over-month declines were recorded in Victoria (down 9.7 per cent), Saguenay (down 11.9 per cent), and Vancouver (down 3.7 per cent).

Market ‘healthy’

The figures suggest that Canada’s housing market remains in relatively good shape despite some economic headwinds, market watchers say.

“Canadian housing continues to look balanced and healthy, as low mortgage rates and a falling jobless rate are offsetting weaker consumer confidence and tighter mortgage rules,” writes Robert Kavcic, an economist at BMO Capital Markets. “We continue to expect sales and prices to cool in the year ahead, but the landing should be a soft one,” he says.

The number of homes sold in September was up 2.7 per cent from August and was 11 per cent higher than a year ago.

The real estate association says the real estate environment market is balanced in two-thirds of the country’s local markets, meaning that the sales-to-new-listings ratio was between 40 and 60 per cent.

New listings in September were up from August in Toronto, Montreal, Ottawa, Oakville and Vancouver. The number of new listings fell in Edmonton and the Fraser Valley.

“Interest rates are expected to remain low for longer, and evidence suggests that recent changes to mortgage regulations are preventing the kind of excesses they were designed to avert,” said CREA chief economist Gregory Klump.

In January, Finance Minister Jim Flaherty announced tighter mortgage rules to address concerns over high Canadian household debt levels. Among other things, Ottawa lowered the maximum amortization period for a government-insured mortgage from 35 to 30 years. It also lowered the upper limit Canadians could borrow against their home equity from 90 per cent to 85 per cent.
Fixed mortgage rates near record lows

Some mortgage brokers are currently offering fixed five-year mortgages for as little as 3.25 per cent and sometimes lower, according to a Monday post on the mortgage blog, CanadianMortgageTrends.com.

But that blog is also reporting that lenders have recently been dropping the discount they’re offering on variable rate mortgages. “Just weeks ago, you could find variable-rate mortgages at prime minus 0.80 per cent or better,” writes Rob McLister, a mortgage broker who runs CanadianMortgageTrends.com. “Banks are now commonly quoting prime rate [3.0 per cent], for example, with little discounting”.

McLister blames “economic troubles and lender profit motives.”

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Contact the Jeffrey Team for more information – 416-388-1960

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Laurin and Natalie Jeffrey are Toronto real estate agents. We would be happy to help you find your new Toronto home — be it house or condo or loft. We would also be more than pleased to help you sell your current Toronto property.

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The vast majority of content on this blog is not written by Laurin or Natalie Jeffery. It is written by many different authors, for many different publications and websites.

We re-print these articles here as a collection of Toronto real estate news and information. We aim for this blog to be a one-stop shop for people looking for information on Toronto real estate.

We do not claim any of the information we did not write as our own. We do not work for any publication, nor any builder. We are Registered Real Estate Sales People working for Century 21 Regal Realty Inc. Brokerage.