Tag Archives: sales volume
Composite house price index shows gains after six-month string of declines
Susan Pigg – Toronto Star
The Canadian housing picture looked a little sunnier in March, despite concerns on the Toronto condo front, as the Teranet-National Bank composite house price index increased 0.4% over February after six straight months of decline.
Comment: Which is amazing, since we still have the same mortgage rules that cause the initial drop. But now, we are turning it around, a lot like I said would happen. I said last summer, just wait and watch, people will just save up more for longer and then start buying again. Which is what it appears is now happening.
Most of the country’s major urban centres recorded increases in house prices in March, year over year, which pushed the composite index up 2.6%, according to figures released Wednesday.
Comment: Toronto has had price increases every month, even with the lower sales.
The Toronto house price index was up 4.7% over March 2012, despite a significant softening in the condo sector and the fact house prices, overall, have declined 1.8% since their peak last September, said National Bank economist Marc Pinsonneault.
Comment: Condos are back up, both in sales volume and in price. Don’t call the condo market dead just yet! And we have not yet hit the peak of the year, for prices. You CANNOT compare months, they are all different. April is way higher than December, same as August is lower than September. Compare September 2013 to September 2012 if you want a proper comparison. But he does not, which is why he is using numbers that he knows will give a skewed result.
“There is only one area of real softness and that is the condo apartment market,” stressed Pinsonneault. “For condos, you have the worst market conditions, outside of the recession, that we’ve seen since 1998.”
Comment: No, that is not true. And a rather dumb and outrageous thing to say.
In March there were 4.3 months of condo inventory on the market, much of it in highrise towers that are planned or under construction. That’s the highest active sales-to-listings ratio — a key barometer of the health of a housing market — since the unprecedented 5.5 months worth of condos that were on the market during the 2008 recession, said Pinsonneault in a telephone interview.
Comment: Sure, lowest condo market since 2008, that I can accept (though it is changing in April, this might be totally out of date in a couple of days when we get the full data for April), but worst since 1998 is simply a fabrication.
The historic median level is 3.1 months.
The fact that housing starts have declined significantly just since the start of this year shows that developers are delaying projects for fear of dumping yet more condos on an already overloaded market, noted Pinsonneault.
Comment: NO. It does not. It only proves that they are delaying things. Unless you have asked every single one of them why they are delaying, you cannot make such a blanket statement. The fact that every crane you see means 80% of units sold, and buildings complete with 90% sold – what is being dumped on a market? The new ones are selling like hot cakes, it is just the resales that are slower. And now they are picking up – mid-April saw listings drop, sales rise and prices increase. That is the truth of the matter.
“But I still think some correction is in the offing,” albeit probably less than the 3–5% National Bank is expecting for Canadian house prices overall this year, he added.
Comment: Wrong. Same “correction” everyone has been predicting (except the one ridiculour 25% claim) for years now. Hasn’t happened. Ain’t gonna. Even with Vancouver’s long slow plummet, it is still NOT pulling the national average down.
When it comes to the single-family home market in Toronto, however, demand continued to outstrip supply in March. That has buoyed house prices and seen the active sales-to-listings ratio drop to 2.2 months, below historic averages closer to 3%, said Pinsonneault.
Comment: Demand outstrips supply every month, that is why prices keep rising. That is why there are bidding wars on rentals. And exactly why the entire market is healthy and will keep increasing.
Teranet compiles the composite house price index, which had fallen each of the last six months in the wake of tighter lending rules and minimal economic activity, by looking at select home sales in 11 major markets.
Toronto was among nine regions that saw increases in index prices in March, year over year, ranging from a high of 5.9% in Quebec City and 5.7% in Calgary to 2.3% in Ottawa and 1.5% in Montreal.
Vancouver and Victoria were the only two cities in the survey to see declines over last March. They were 1.5% and 3.5% respectively.
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.