Tag Archives: global financial crisis
Dianne Nice – Globe and Mail
After three years of volatility, the Canadian housing market is settling into a more moderate pace of activity.
An RBC report on the Canadian home resale market says home prices will increase by 4.4% this year before they flatten to 0.4% growth for 2012. Home resales are expected to increase by 0.9% this year and remain unchanged next year.
“Our view is that less turbulent economic and policy environments will support a smoother process going forward,” the RBC report says. “The main policy shift will be one toward progressively higher interest rates, which will cool demand but not deep-freeze it.”
Since 2008, the housing market has experienced a lot of volatility due to the global financial crisis and domestic policy changes, including stricter mortgage lending rules and the introduction of the HST in Ontario and British Columbia.
Canadian property values have roughly doubled in the past decade and rebounded quickly to new record-high levels following the 2008 market downturn. In the United States, by contrast, housing prices have still not recovered.
The Alberta resale housing market is expected to post the strongest gains this year with 7% growth, a partial recovery from the 13.6% decline it suffered in 2010. The other Prairie provinces will average 4.5% growth this year, the report says. Alberta and Saskatchewan will see modest increases in real estate prices (0.5% and 2.1%, respectively) for 2012.
For all other provincial markets, price gains next year are forecasted to be at their weakest during a time of economic expansion since the mid- to late-1990s.
“In the case of British Columbia, we expect that extremely poor affordability will cause a partial reversal of the recent substantial gains and forecast an absolute decline of 1.6% (on an annual basis) in 2012,” the report says.
“The perplexing developments in the B.C. market in the past several months — whereby home prices have surged in segments of the Vancouver-area market despite slower resales — are expected to be partly reversed in the coming year, making British Columbia the only province experiencing a price decline (on an annual basis) in our forecast for 2012,” the report says.
Resale activity in Ontario and the Atlantic provinces is expected to be flat this year and weaker next year.
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Canada News Wire
Sales of new high-rise condominium suites held firm in June while sales of new low-rise homes retreated due to record-low inventory levels of that product type, the Building Industry and Land Development Association (BILD) announced today.
According to RealNet Canada Inc., BILD’s official, independent source of new home market intelligence, there were 2,920 new homes and condos sold in June 2010. While high-rise condo sales remained right in line with 2009 (and 2008), low-rise (single-detached, semi-detached town-home) sales were off by 46%, resulting in a 26% decrease in total new home sales June/June. “It’s a tale of two markets,” quipped BILD President and CEO Stephen Dupuis.
With the first half of 2010 in the books, the recovery in new home sales is revealed by a 69% increase in total new home sales driven by a dramatic 142% increase in sales of high-rise condominium suites. Even compared with January-June 2008, total new home sales are up a healthy 22%.
“By this point last year, the new housing market was nearing full recovery from the global financial crisis. We’re now comparing apples with apples and on that basis, the new home market appears to be on relatively solid footing at this time,” Dupuis said.
He pointed out that the low-rise market is up 29% on a year-to-date basis, with the June decline reflecting an over-shot last year when sales spiked by 60%, as well as the record low inventory levels of detached, semi-detached and townhomes. “With relatively few new project openings thus far this year, low-rise sales have been naturally constrained,” Dupuis stated.
June new home sales were split 60% high-rise, 40% low-rise and through the first six months of the year 53% high-rise, 47% low-rise.
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