Housing market seen calm, but for ‘Toronto tornado’
Michael Babad – Globe and Mail
Home sales in Canada climbed 1.4% in February from a year earlier, winning back some earlier slippage and indicating a fairly balanced market. But for what BMO Nesbitt Burns dubbed the “Toronto tornado.”
Overall, the number of new listings rose faster than sales, at 1.9%, the Canadian Real Estate Association said today, while the sales-to-new listings ratio held steady. New listings are now at their highest level since May, 2010.
“A rebound in new listings in Toronto and Montreal, Canada’s two most active markets, offset a retreat in new listings in Vancouver, Canada’s third-largest market,” CREA said.
The regional differences are being noted by economists. Toronto has been pumped by a condo boom, while sales of pricey Vancouver homes has ebbed.
“While sales activity was solid last month, mild weather and the extra day likely pumped the figures,” said Douglas Porter, the deputy chief economist at BMO Nesbitt Burns.
“With the notable exception of Toronto, price increases are lukewarm, the market looks well balanced, and is broadly moderating on its own accord,” he said in a report.
“Just three cities have posted double-digit price increases in the past year (while two have seen drops), but one of those three happens to be Toronto at +10.6%,” he added. “… The flip side of Toronto’s strength is the ongoing moderation in Vancouver. The 18.1% year-over-year drop in sales there is by far the largest in the country, and is the mirror image of massive gains a year ago.”
According to the Toronto Real Estate Board, sales in the Greater Toronto Area were up 16% in February from a year earlier, though there was an extra selling day last month, and average prices up 11%.
Across Canada, year-over-year, CREA said, prices are up 2% as Vancouver cools somewhat but Toronto remains strong.
“In February, 2011, the national average price was stretched upward by a spike in high-end home sales in some of Vancouver’s priciest neighbourhoods, and a replay of that was not expected this year,” said CREA economist Gregory Klump.
“February’s data bear this out, but other factors are now keeping the national average price aloft. The main one is the housing market in Toronto, where a tight balance between supply and demand continues to drive some of the strongest home price gains in the country, particularly for single detached properties.”
A key measure of how consumers can handle their debts is easing somewhat, but that’s because income is rising at a faster pace.
Debt-to-disposable income among Canadian households dipped in the fourth quarter of last year to 152.9% from 154.2%, Statistics Canada said today. Those figures are not seasonally adjusted.
Household debt per capita rose in the quarter, but so too did net worth, and net worth as a percentage of disposable income.
“Household net worth was up nearly 1% in the fourth quarter, led by gains in the values of household holdings of equities (including mutual funds) and pension assets,” the federal agency said.
“Household credit market debt increased in the fourth quarter despite a slower rate of borrowing in consumer credit and mortgages,” it added.
You can slice these things all different ways, but the bottom line is that consumers are stretching themselves thin, as many policy makers, notably Bank of Canada Governor Mark Carney, have warned.
Contact Laurin Jeffrey for more information – 416−388−1960
Laurin Jeffrey is a Toronto Realtor with Century 21 Regal Realty. He did not
write these articles, he just reproduces them here for people who are
interested in Toronto real estate. He does not work for any builders.
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