MLS home sales growing stronger

Canadian resale housing activity climbed to the highest level of any third quarter on record.

Actual (not seasonally adjusted) home sales via the Multiple Listing Service® (MLS®) Systems of Canadian real estate boards totalled 135,182 units in the third quarter of 2009, according to statistics released by The Canadian Real Estate Association (CREA). This is the highest level of activity on record for the period from July to September. The number of transactions was up 18 per cent from the third quarter of last year, representing the biggest year-over-year increase since early 2002.

Seasonally adjusted national MLS® home sales numbered 127,941 units in the third quarter, up 12 per cent from the previous quarter. Building on two previous quarterly increases, seasonally adjusted MLS® home sales activity now stands 48 per cent above the low reached in the fourth quarter last year.

"Momentum for sales activity remained strong throughout the third quarter," said CREA President Dale Ripplinger. "Low interest rates, rebounding consumer confidence and an improving overall sense of economic security continue to draw homebuyers to the housing market."

Seasonally adjusted sales activity in the third quarter was up from the previous quarter in over 80 per cent of local markets. Quarterly activity increases in Vancouver (34 per cent), Toronto (11 per cent), and Calgary (19 per cent) contributed most to the national increase in activity.

Some 42,958 homes traded hands via the MLS® Systems of real estate boards in Canada in September 2009 on a seasonally adjusted basis. This represents an increase of 1.5 per cent from August, and lifts seasonally adjusted activity 63 per cent above the low in January.

Actual (not seasonally adjusted) MLS® home sales activity remained strong throughout the quarter. Resale activity in September 2009 posted the fourth consecutive increase from year-ago levels, all of which exceeded 15 per cent. Sales numbered 42,497 in September, up 17 per cent year-over-year and a new record for the month. Year-over-year activity increases in Toronto (28 per cent) and Vancouver (124 per cent) were the driving force behind the increase in actual (not seasonally adjusted) national sales activity in September.

Climbing to $327,736, the national MLS® residential average price rose 11 per cent from the same quarter last year. The national average price continues to be skewed upward by a sustained increase in sales activity, including a sharp rebound in activity at the higher end of the price spectrum, in some of Canada’s priciest markets.

The national MLS® residential average price surpassed all previous monthly levels in September 2009, rising 13.6 per cent year-over-year to $331,602. July and August also posted new average price records for their respective months. A number of provinces set new average price records for the month of September, and Ontario posted the highest average price on record.

The price trend is similar but less dramatic for the weighted national MLS® average price, which compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. The weighted national MLS® average sale price was up 9.3 per cent year-over-year in September 2009.

On a seasonally adjusted basis, the supply of homes coming onto the MLS® market edged up in the third quarter after four consecutive quarterly declines. Seasonally adjusted MLS® residential new listings were up one per cent from the previous quarter to 199,824 units. The increase reflects a quarterly rise in the number of new listings in British Columbia and Ontario, Prince Edward Island, and Newfoundland & Labrador. New listings remained stable or continued to retreat in other provinces.

While the small rise in seasonally adjusted new listings suggests that the number of homes coming onto the market may soon begin to edge higher, the number of new listings remains well down from year-ago levels. Barring a sudden unforeseen spike in levels, new listings are likely to remain down from year-ago levels for some time.

Actual (not seasonally adjusted) new listings were down 12.5 per cent compared to the third quarter of 2008 after posting year-over-year decreases in each of the previous quarters. Newfoundland & Labrador is the only province in which new listings were up from year-ago levels.

An increase in sales activity and fewer new listings are drawing down inventories compared to year-ago levels. There were 208,215 homes listed for sale on the MLS® Systems of real estate boards in Canada at the end of September 2009, down 16 per cent from a year earlier. This is the fifth consecutive year-over-year decline in active listings, and the largest decline in more than six years.

Nationally, the number of months of inventory was 4.9 months in September 2009. This is down slightly compared to August, and remains well down from the recessionary peak of 12.8 months in January 2009. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.

The seasonally adjusted residential dollar volume for MLS® home sales increased 20 per cent on a quarter-overquarter basis to $42.1 billion in the third quarter of 2009, the highest level on record. New provincial records were also set in British Columbia and Ontario, which propelled the national figure to a new high.

"Monthly sales activity remained on a strong upward trajectory throughout the third quarter in British Columbia, while showing signs that it may be topping out in other provinces," said CREA Chief Economist Gregory Klump. "On balance, this suggests that sales activity may be starting to plateau after having climbed rapidly earlier this year."

"Average price increases over the rest of the year are expected to prompt sellers to return to the market after having retreated to the sidelines late last year and earlier this year," he added. "An increase in new listings will help keep a lid on price increases. Price increases over the rest of 2009 and early next year are likely to reflect declining average prices late last year and earlier this year."

Source: The Canadian Real Estate Association

October 15, 2009 in Canadian Real Estate Market | Permalink | Comments (3) | TrackBack

Royal LePage House Price Survey

Lag in seasonal sales cycle brought on by the recession, coupled with undersupply, creates illusion that market is booming.

Canada’s housing market is on the road to recovery but is experiencing a pronounced undersupply of homes for sale in southern Ontario and other regions of the country, according to the Royal LePage House Price Survey. With the recession retreating, the report found that home prices are stabilizing and unit sales are increasingly driven by improved affordability.

The market’s strong showing in the third quarter has led some commentators to refer to the current conditions as the beginning of a real estate boom. Royal LePage cautions that the increase in sales activity and firming of house prices are the product of a normal market correction and not the beginning of another aggressive expansionary cycle.

“The 2009 real estate market has seen sales activity lagging approximately one month behind the typical seasonal patterns,” said Phil Soper, president and chief executive, Royal LePage Real Estate Services. “The economic recession halted the flow of the real estate cycle from the fourth quarter of 2008 through the first quarter of 2009, but it is essentially now back on track albeit delayed. Once housing supply returns to normal levels, we believe the economy will support modest pricing growth into 2010.”

While the Atlantic provinces saw a strong recovery in home prices with double-digit percentage increases year-over-year in some markets in the third quarter of 2009, western provinces have been slower to recover from the significant price corrections that occurred in 2008, particularly in British Columbia and Alberta. Meanwhile, Ontario and Quebec saw home prices stabilize or gain slightly year-over-year with much of the recovery occurring throughout the strong third quarter.

Royal LePage’s third quarter report shows that the average price of a two storey home in Canada was comparable to a year ago (up 0.1 per cent) at $409,335. Average bungalow values increased 0.06 per cent year-over-year to $341,146, while the price of an average condominium increased 0.09 per cent to $243,748.

After the economic crisis created a drought of home sales and declining prices from the fourth quarter of 2008 through the first quarter of 2009, the market began to recover in the spring due to pent up demand and improved affordability. “It appears the market recovered unevenly,” Soper commented. “In the first quarter of 2009 we saw the return of first time buyers, then cautious move-up buyers. In the third quarter, the sales activity of the higher priced regions of the country and higher priced property types picked up momentum and caught up to the lower priced segments.”

A shortage in housing supply is leading to bidding wars in several cities, including Toronto, Richmond Hill, Markham, Montreal, St. John’s (NF), St. John (NB), Moncton, Edmonton, Calgary, North and West Vancouver, and Victoria. Improved affordability is the biggest driver of current real estate activity levels, Soper added. “With the widespread availability of affordable mortgage financing, and only modest increases in home prices, affordability is better now than it has been in a number of years. We expect house prices and interest rates to remain relatively stable into next spring which would keep affordability levels intact.”

Regional House Price Data

Royal LePage’s latest quarterly House Price Survey shows the strongest growth in year-over-year increases in St. John’s, Newfoundland, where standard two storey homes were up 13.3 per cent over 2008, to $296,667, with bungalows and standard condominiums showing similar price gains. Most other major centres in Atlantic Canada experienced modest growth, with the exception of Saint John, New Brunswick, where detached home prices continued to fall year-over-year and quarter-over-quarter in Q3.

In Toronto and the Greater Toronto Area, the real estate market saw a distinct pause earlier this year. House prices, however, did not fall dramatically due to a reduction in the number of listings on the market. Currently, single family and semi-detached home prices are outperforming other categories. Detached bungalows are up 0.8 per cent and standard two storey homes are up 1 per cent year-over-year, while standard condominium prices fell 3 per cent over the same period. All three categories have shown price increases compared to second quarter numbers.

Diversified economies in Ottawa, Montreal and Winnipeg contributed to modest home price appreciation in those cities in the third quarter. Canada’s capital saw standard two storey homes increase 3.3 per cent year-over-year, to $327,833, while similar homes in Winnipeg increased 5 per cent to $265,938. Montreal home prices also continued to improve, with a year-over-year increase of 2.1 per cent for standard two storey homes, at $343,480, and a 4.4 per cent improvement in standard condominium prices, to $213,278.

“Markets in Quebec, eastern Ontario and Manitoba had fewer of the price spikes we saw elsewhere, the corollary being that housing markets in these regions fared better during the recession,” said Soper. “These regions have not been recession proof from a real estate perspective, but certainly have proven recession resistant, helped by balanced economies with diverse employment bases across manufacturing, resources, government, and services.”

Meanwhile, in the traditional boom-bust, resource dependent economies in western Canada, home prices that corrected sharply downwards in 2008 have been slower to recover. In almost all regional markets across the prairies and British Columbia, year-over-year home values continued to be flat or declined in Q3 2009. In Saskatchewan, home prices dropped between 0.6 per cent and 5.6 per cent with a standard two storey home in Regina averaging $251,500. Alberta values declined year-over-year between 1.6 and 9.3 per cent. Although house prices remain below last year’s levels in Calgary and Edmonton, they are starting to improve. Calgary saw two storey homes recover slightly to $414,556 while the average price for a two storey home in Edmonton remained flat at $327,429 from last quarter.

In B.C., where market activity picked up considerably in the third quarter, detached home prices in Vancouver were still down between 1.8 and 2.3 per cent year-over-year, however values improved during the third quarter with standard two storey homes selling for an average of $904,750.

“It is a modest recovery but a recovery nonetheless and that change is reflected in the housing market,” said Soper. Although key economic indicators are showing signs of improvement, fears over job security and economic instability will keep many Canadians in their current homes. “Fewer people are willing to move, because they’re still concerned about the economy. Until they are convinced things are back to normal, some people will not put their homes up for sale and we’ll continue to have constrained supply.”

Royal LePage’s Q3 House Price Survey shows the annual change of prices for key housing segments in select national markets. Click here to view the chart (.PDF).

Source: Royal LePage Real Estate Services

October 9, 2009 in Canadian Real Estate Market | Permalink | Comments (0) | TrackBack

Residential Real Estate sales up 18.5%

Low interest rates continue to attract home buyers to the housing market.

Home resales held steady on a monthly basis in August, but increased by 18.5 per cent compared to the same time last year, the Canadian Real Estate Association said today. A total of 42,483 homes traded hands across the country through the MLS listing service. Housing resales in Vancouver increased by 117% over last year's levels.

The annualized gain represents the third consecutive year-over-year gain of more than 15 per cent, and it's the largest year-over-year gain in more than two years.

Sales volumes were up in most major markets across the country, according to data from the Multiple Listing Service, the national residential average price rose 11.3 per cent from year-ago levels to $324,779.

"A rebound in activity at the higher end of the price spectrum in some of Canada's priciest markets is skewing the national average price upward," the agency said. The August price average set records in every province except Alberta.

Listings down

The number of new listings posted the eighth consecutive decline from year-ago levels. New residential listings were down 8.9 per cent year-over-year to 64,167 units, the lowest level for the month of August in five years.

Fewer listings coupled with improved demand is drawing down inventories, the agency said. There were 212,227 homes listed for sale in August, down 13.3 per cent from last year's levels.

That was the fourth consecutive year-over-year decline in active listings, and the largest decline in more than six years.

September 15, 2009 in Canadian Real Estate Market | Permalink | Comments (4) | TrackBack

Canada's ICI market struggles

Toronto's commercial real estate market is facing 'trying times' with no bounceback as experienced by the residential sector.

Canada's housing market may appear to be on the fast track to recovery but commercial real estate, which includes office buildings, industrial and retail space, still faces "very trying times," two reports released Monday show.

Commercial real estate transactions fell by more than 50 per cent in the first half of 2009 compared to last year, according to CB Richard Ellis Ltd.

It said transaction value was about $4.9 billion from January to June compared to $10 billion for the same time last year. The number of transactions also dropped dramatically to 1,569 from 2,542 last year.

"The global recessionary impact on the commercial real estate market has yet to run its course," said John O'Bryan, vice-chairman of CB Richard Ellis, which provides financing and management services for commercial real estate.

O'Bryan said the commercial market follows the general economy, and is not seeing the same kind of bounce as in the residential real estate sector.

"There is a big contrast between the two markets; one is looking as though everything is back on track and the other one looks as though it's recovering slowly."

On Friday, the Canadian Real Estate Association said residential resale activity jumped 18.2 per cent in July compared to last year, setting a record for the month. Buyers are being enticed by record low interest rates and federal tax breaks for new buyers.

BMO Capital Markets called July's sales figures a "Lazarus-like rise" from the "depths of despair" where Canada's residential real estate sector was just six months ago.

But the commercial real estate sector isn't expecting similar miracles.

"It's a very uneven recovery," O'Bryan said.

He doesn't expect the commercial market to hit close to the nearly $32-billion high reached in 2007, which he called an "aberration."

"We are now tracking this year to do around $10 billion," he said.

"The pain in the general economy isn't anywhere near through the system. The (commercial) real estate market is reflecting that."

O'Bryan said 2010 will be a year of recovery for commercial real estate, as the unemployment rate remains high and businesses still look for ways to keep costs low.

The vacancy rate for commercial office space across Canada rose to 8.3 per cent in the second quarter compared to 6.4 per cent for the same time last year, according to CB Richard Ellis data.

Scotiabank economist Adrienne Warren said commercial real estate tends to lag other parts of the economy because the projects are often large and take years and lots of money to develop.

"You need to secure fairly large tenants and secure financing. It's more complicated," she said.

She said a lot of new stock that started being built in better economic times is now coming to market, which is helping push up vacancy rates in cities such as Toronto and Calgary.

Warren also expects vacancies rates to rise further in the coming months, before eventually recovering.

However, Warren said the overbuilding is nowhere near the level it was in the late 1980s and early 90s, when commercial vacancy rates were around 15 per cent.

"We are more cautious today about building and lending," she said.

Warren added Canada's commercial sector is nowhere near as depressed as that of the U.S., where vacancy rate has surpassed 15 per cent.

The crisis in the residential and commercial real estate sectors south of the border has also led to the collapse of lenders.

Last week, U.S. regulators shut down Montgomery, Ala.-based Colonial BancGroup Inc., a big lender in real estate development and smaller Pittsburgh-based Dwelling House Savings and Loan.

Both closures boosted to 76 the number of federally insured banks in the U.S. that have failed so far this year, according to reports.

Warren said similar-style closures are not expected in Canada, where banking criteria is much more conservative.

In its report released Monday, PricewaterhouseCoopers said Canada still has "significant obstacles" to overcome before its commercial real estate sector recovers.

In fact, the consultancy said conditions are becoming more challenging as a result of tight lending conditions, less investor appetite for commercial mortgage backed securities and expectations for higher capitalization rates, which imply decreased valuations.

It also said financial weakness and sluggish growth amongst tenants is also a problem in the sector.

"The credit crisis and ensuing recession have dragged commercial real estate markets into very trying times, marked by value losses, rising foreclosures, and reduced property revenues," said Frank Magliocco of the PricewaterhouseCoopers real estate division.

"There is simply scarce money and therefore limited buyers."

Its report said "vulnerable" property types include buildings used for hotels and leisure as well as suburban office and industrial space.

It recommends property owners reassess their short and long-term needs in case vacancy rates increase further.

"In some cases, a formal restructuring process, equity injection or other non-traditional strategy may be beneficial," Magliocco said.

Soyrce: The Canadian Press.

August 18, 2009 in Canadian Real Estate Market | Permalink | Comments (4) | TrackBack

House sales in Canada jump in July

Canada's resale housing market for July posted the largest year-over-year gain in two years, with Western homebuyers leading the way, according to statistics released Friday by The Canadian Real Estate Association. For the first time on record, sales of existing homes climbed to more than 50,000 units for July.

A total of 50,270 homes were sold last month via the Multiple Listing Service of Canadian real estate boards. This is up 18.2 per cent from the same month last year, and 3.9 per cent above the previous record for July that was set in 2007.

"The difference in the resale housing market now, compared to the beginning of the year, is night and day, and nowhere is this more evident than in the West," association president Dale Ripplinger said in a release.

"Homebuyers recognize that interest rates and prices have bottomed out, and are taking advantage of excellent affordability before prices and interest rates move higher."

Resale numbers for July were up from the same month last year in about 60 per cent of local markets.

The association said year-over-year gains in these cities contributed most to the national increase in activity:

Demand is rebounding sharply in some of Canada's priciest housing markets, skewing the national average price upward, with the average price rising 7.6 per cent from one year ago to $326,832.

See the Canadian Real Estate Association report »

August 14, 2009 in Canadian Real Estate Market | Permalink | Comments (4) | TrackBack

Real Estate Recovery Underway?

Pent-up demand for residential housing has bolstered sales in Canada’s major markets—a clear signal that the housing sector has shifted into recovery mode, says RE/MAX.

More balanced market conditions have emerged, effectively ending the stronghold that buyers had on the market over the past six to eight months. Canada’s largest markets, Toronto and Vancouver, led the charge—with June sales among the highest in history for both local real estate boards. Close to 11,000 properties changed hands in Toronto, up 27 per cent over one year ago, setting a new record for sales in the month of June. The figure was just slightly off the all-time peak of 11,146 units. Residential sales in Greater Vancouver increased 75.6 per cent over one year ago, to 4,259 units, just short of the record breaking 4,333 sales, which occurred in June 2005. Overall, major markets began to recover in March, posting escalating sales in April, May and June. The impetus is expected to continue throughout the remainder of 2009, with most centres now forecasting year-end sales on par or ahead of 2008 levels.

“The strength of the market, amid the most significant global recession in recent history once again underscores its relevance to the nation’s economic engine,” says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. “Canadians believe in homeownership --a fact best illustrated by the purchasers who ventured forward in recent months and snapped up some of the best real estate deals this market has seen in years. Those who chose to sit it out on the sidelines are now facing a market in transition, characterized by the threat of rising interest rates, low inventory levels, and upward pressure on housing values.”

The recent surge in resale activity can be attributed to three key factors—pent-up demand, low interest rates, and greater affordability. The combination—in conjunction with declining inventory levels—has created heated market conditions in hot pocket neighbourhoods, prompting a resurgence in multiple offers in June. Average prices are holding steady or climbing, days on market are down, and inventory levels continue to tighten, especially at entry-level price points.

“While sales are the leading indicator, there are other clear signals that recovery is indeed underway,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “Renewed consumer confidence, albeit cautious, has been key, supported by improved economic news. In addition, we’ve seen sale price-to-list price ratios climb across the country, rising as high as 105 per cent in some communities. Vendor incentives have also come off the table, both for resale and new housing stock.”

Although the current pace may be unsustainable, all markers point to greater stability in the market, leading to healthier activity in the long run, with inventory levels a key variable influencing pent-up demand.

Market by market overview:

St. John’s

Strong consumer confidence, buoyed by a vibrant local economy and a healthy employment picture, has kept St. John’s real estate engine moving at a steady clip. With billions of dollars in capital works projects planned or underway, in-migration remains positive and demand for resale housing continues to be solid. Improving inventory levels have shifted the market slightly into buyers territory, giving purchasers the necessary traction to make their moves. The threat of interest rate hikes has further stimulated home buying activity, pushing fence-sitters off the sidelines and into action. Residential sales in June 2009 (354 units) are slightly ahead of June 2008 (351 units) figures. The year-to-date average price recorded a 24 per cent increase to $211,221, compared to $170,500 for the same time period last year, bolstered by greater momentum in the mid-range. Corporate transfers have been a significant stimulus. Entry-level homes, priced between $100,000 and $200,000, are being snapped up at an unprecedented pace given the sharp upswing in pricing. Listing inventory levels are higher and the upper-end continues to move well, supported by the relocation market. Inventory will be a key factor influencing St. John’s housing sector in the months ahead. The pace is expected to continue, with sales rounding out the year at or ahead of 2007 levels, but below record numbers reported in 2008.

Halifax-Dartmouth

Improved purchasing power, combined with the threat of rising interest rates, effectively spurred fence-sitters back into the resale housing market in June, halting the trend of double-digit declines in sales. The number of homes sold was up five per cent to 805 units in June 2009, compared to one year ago. Despite the increased momentum, buyers remain firmly in the driver’s seat, benefiting from increased inventory and negotiating muscle, as motivated vendors adjust pricing to position their homes more competitively. Although sales remain down year-over-year, the gap is narrowing. Affordability and the stability of Halifax-Dartmouth’s relocation market continue to prop up activity, and first-time buyers remain the driving force. Opportunity exists for purchasers in the mid-to-upper price ranges, where demand and conditions have generally been softer. Consumer confidence is strengthening once again. With the upswing expected to extend into the fall, more balanced market conditions are forecast to emerge, and Halifax-Dartmouth may once again find itself a market in transition.

Ottawa

Solid economic fundamentals in the nation’s capital continue to prop up housing activity. Year-to-date sales for January to June are slightly ahead of 2008 levels, with the number of properties sold in June (1,895) up 12.5 per cent over one year ago – the third consecutive record setting month. Pent-up demand has been a major factor, with purchasers who put their home buying decisions on hold during the late fall and early winter now entering the market en masse. As a result, the balanced market that prevailed in recent months is now shifting in favour of the seller. Multiple offers are occurring on desirable properties in virtually every price range. Inventory levels, which peaked in April, are now falling. With less product on the market, certain segments are experiencing serious shortages—in fact, single family homes priced between $275,000 to $375,000 are few and far between. In the past four to six weeks, the upper-end has also started to rebound as all segments of the market work in tandem. While the threat of an upcoming election will have some impact on the market, healthy sales activity is expected to continue throughout the remainder of the year, with sales ahead of 2008 levels.

Greater Toronto Area

Pent-up demand for residential housing continues to fuel home buying activity across the Greater Toronto Area. The number of homes sold in June – at 10,955 -- came close to the historic record of 11,146 units set in May 2007, while pressure on average price is sending housing values higher than one year ago. Although balanced market conditions prevail, there are those communities that have clearly transitioned into sellers markets. Inventory is key, with the number of properties currently listed for sale down approximately 30 per cent from 2008 levels. Over the past six weeks, momentum has been building, with demand strongest for homes priced between $300,000 and $600,000. Multiple offers are once again commonplace, especially in the city’s coveted hot pocket neighbourhoods.

Affordability – in terms of low interest rates and housing values – has been the impetus for first-time buyers. Luxury home sales have also experienced solid demand in recent months, with 291 homes changing hands over the $1 million price point in June – a new record. The threat of higher interest rates and home prices are expected to stimulate a flurry of home-buying activity in the months ahead. By year-end, sales are forecast to exceed 2008 levels.

Regina

Positive economic performance continues to bolster home buying activity in Regina. Despite a 10 per cent decline in year-to-date sales (1,778 vs. 1,977 units) from levels reported January to June 2008, the gap is narrowing as purchasers move to take advantage of low interest rates and greater affordability. Sales in May and June were up in double-digit territory over one year ago and momentum is building. First-time buyers remain the most active segment of the market, sparking sales under $275,000. Inventory levels have been responsible for the steady upward pressure on housing values in the lower-end of the market. Limited supply of starter product in Regina has most properties in good condition, in desirable communities, moving quickly – some in multiple offers. The top-end of the market has also seen some bounce back, with sales between $400,000 and $450,000 up about 25 per cent over one year ago. Condominium sales, however, have softened year-over-year, with an oversupply of product currently listed for sale. Although conditions currently favour the buyer, the market is transitioning. More balanced conditions are expected to emerge in the months ahead. Given a continuation of current economic fundamentals, the number of homes sold in Regina by year-end is expected to match 2008 levels.

Calgary

Balanced conditions have returned to Calgary’s resale housing market. Strengthening momentum—residential sales at over 3,000 units were up in double-digit territory in June —has already begun to place upward pressure on prices in the entry level. With increasing competition among first-time buyers, the supply of starter homes is tightening. Buyers who moved in spite of doom and gloom forecasts in the Fall, Winter, and early Spring realized considerable savings, while those who hesitated are discovering it has cost them. Multiple offers are re-emerging in a few choice neighbourhoods on well-priced product, although there are still a few good deals to be had in the mid-range. Prices on the whole, however, are stabilizing. Signs of a transitionally stronger market include rising sales-to-new listings ratios, shorter days on market, and fewer incentives from vendors/builders. Activity is expected to remain better than average this summer, as those who paused over the past six months dive back in before interest rates rise. Momentum will continue to build into the fall, with overall 2009 sales edging slightly ahead of 2008 levels by year-end.

Edmonton

The residential resale market is springing back to life in Edmonton, with sales setting a new record for the month (June) and the third best month for unit sales in MLS history. While activity has been steadily improving in the second quarter, the heated momentum has yet to put any serious pressure on average price, which, although rebounding, remains down year-over-year.

The market has shifted, moving from buyer’s territory to more balanced conditions, prompted by the recent flurry in home buying and the slow return to more traditional inventory levels. Stability will characterize Edmonton’s housing sector going forward, with low interest rates, rising consumer confidence levels and affordability the impetus behind healthy demand. The frenzied climate of previous upswings will be conspicuously absent. While multiple offers have re-emerged—particularly in the $300,000 to $450,000 price point—they will continue to be the exception rather than the rule, driving sales price close to, but not typically over, asking price. Demand is expected to remain strong in the months ahead, bolstered by looming interest rate hikes and glimmers of positive news on the economic horizon, as consumers regain a cautious optimism.

Greater Vancouver Area

Growing consumer confidence levels have prompted a serious upswing in home buying activity in the Greater Vancouver Area, with sales in June (4,259) the second highest on record for the local real estate board. From White Rock to Vancouver, radiating out to the Fraser Valley, bidding wars are breaking out on well-priced product. In Kitsilano, an estimated 50 per cent of housing is selling in multiple offers. Low interest rates and increased affordability – average price is still significantly lower than one year ago – have served to stimulate market activity. Inventory levels have been on the decline in recent months, placing greater upward pressure on values. First-time buyers are driving freehold housing sales at the $600,000 price point, while those looking at more affordable alternatives are considering condominiums starting at substantially less. Balanced market conditions prevail overall. Pent-up demand has also been building, with local purchasers and international investors both active in the market. The upcoming Olympics, and the completion of the much anticipated Canada Line this Fall are expected to further bolster the cautious optimism characteristic of the Greater Vancouver market at present. Home buying activity, as a result, is forecast to continue at a healthy pace for the remainder of the year, with year-end sales slightly ahead of 2008 levels.

July 14, 2009 in Canadian Real Estate Market | Permalink | Comments (10) | TrackBack

CREA National MLS Report:

The Canadian Real Estate Association reports that national resale housing continued to rise in May.

The Canadian resale housing market activity returned to pre-recession levels in May 2009. The rebound in activity is being led by an increase in transactions in some of the most expensive markets in the country, which is skewing the national average price upward. According to statistics released by The Canadian Real Estate Association (CREA), actual (not seasonally adjusted) home sales via the Multiple Listing Service® (MLS®) of Canadian real estate boards totaled 49,521 units in May 2009. This is less than one per cent below activity in the same month one year ago. Year-over-year declines have been shrinking since the beginning of the year.

The seasonal increase in activity continues to be stronger than normal. As a result, seasonally adjusted home sales rose eight per cent to 37,649 units in May compared to April. This marks the fourth consecutive monthly increase in seasonally adjusted activity. Seasonally adjusted activity in May was 43 per cent above where it stood in January 2009.

Seasonally adjusted sales were up on a monthly basis in about 70 per cent of local markets. Monthly activity gains in Toronto (nine per cent), Calgary (25 per cent), Montreal (10 per cent), Vancouver (eight per cent), and Edmonton (12 per cent) contributed most to the overall increase in monthly activity.

The national MLS® residential average sale price in May 2009 reached the highest monthly level on record. At $319,757, it was up fourth tenths of a percentage point from the previous record set in May 2008. Over the past four months, the national MLS® residential average price has recovered 16.4 per cent from the low in January. The average price for MLS® home sales climbed to new heights nationally, and in Saskatchewan, Ontario, Quebec, New Brunswick, and Nova Scotia. New records were posted in only 15 per cent of local markets in May, none of which are among the most active or expensive. The strong rebound in sales activity, not price, in Canada’s most expensive markets is driving up average prices nationally and in some provinces, just as a sharp decline in activity in these markets pushed average prices lower in late 2008.

The supply of homes coming onto the MLS® market continued to decelerate in May. Seasonally adjusted MLS® residential new listings edged lower by eight tenths of a percentage point to 65,070 units, the lowest level since December 2005. Seasonally adjusted new residential listings in May were 19 per cent below the peak reached one year ago.

“Sales activity is now closer to the pre-recession peak than it is to the recent low point reached last January,” says Regina Broker Dale Ripplinger, President of The Canadian Real Estate Association. “Strengthening consumer confidence, low interest rates, and improved affordability are drawing buyers to the housing market across Canada,” he added.

“Fueled by a string of monthly increases in activity, the number of transactions in May reached the highest point since July 2008,” said CREA Chief Economist Gregory Klump. “Inventory levels are still high in many markets, but fewer new listings and rising sales activity suggests that the selection of homes available for sale may shrink as the year progresses. The supply of homes up for sale needs to be drawn down further before average price increases become more widespread among local markets.”

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighborhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.

See the CREA News Blog »

June 15, 2009 in Canadian Real Estate Market | Permalink | Comments (2) | TrackBack

Canada's Hottest 21 Neighbourhoods

Housing markets in a handful of neighbourhoods in Canada's major cities have dodged the recession and experienced robust price increases over the past year, according to a Century 21 Canada "HOTTEST 21 NEIGHBOURHOODS" survey released today.

Century 21 Canada also reported that more than a hundred other big city neighbourhoods are experiencing resurgent house prices after months of languishing in the recession doldrums.

Century 21 Canada said Canada's HOTTEST 21 NEIGHBOURHOODS for housing prices are located in five major cities and 10 suburbs of major cities:

The Century 21 Canada survey shows that the HOTTEST 21 NEIGHBOURHOODS were in Toronto (three); Toronto suburbs (eight); Vancouver (two); Vancouver suburbs (one); Ottawa (one); Ottawa suburbs (two); Winnipeg (two); Halifax (one); and Regina (one). All of the HOTTEST 21 NEIGHBOURHOODS experienced price increases over the past year and over the past month.

Don Lawby, President of Century 21 Canada, said, "These survey results support what I am seeing in my annual June Canada-wide tour of housing markets. Although most markets have been impacted by the recession, some have neighbourhoods in which prices are resilient and stronger today than a year ago and many have neighbourhoods that are getting stronger month by month this spring."

"This survey serves as a reminder to Canadian homeowners to avoid relying on city, provincial or national averages to gauge their local neighbourhood housing markets. Instead, sellers should monitor selling prices of similar homes in their own neighbourhoods. Buyers should monitor selling prices of typical homes in the neighbourhoods where they want to live," said Lawby.

The Century 21 Canada survey covered 10 major cities (Halifax, Ottawa, Toronto, Winnipeg, Regina, Saskatoon, Calgary, Edmonton, Vancouver and Victoria) by Canada Post Forward Sorting Areas (FSAs) which are the equivalents of large neighbourhoods. FSAs are the first three digits of Canada's postal codes. Data was compiled for 190 of these neighbourhoods in which at least 30 housing units were sold during March 2009. Quebec data was not available for this survey and is therefore not included.

Of the total qualifying 190 neighbourhoods:

The complete database showing market activity, days on market, average prices, median prices, and sold-to-ask ratios is available at www.Century 21.ca/media.

Hottest of the Hot 21

Etobicoke

The hottest neighbourhood in metro Toronto over the past year included the Centennial Park area in Etobicoke (FSA: M9C) bounded east and west by Highway 427 and Etobicoke Creek and north and south by Eglinton Ave and Queen Elizabeth Way. In this neighbourhood, average prices were $302,052 in April 2009, an increase of 17% from $257,907 in April 2008 and an increase of 4% from $290,365 in March 2009.

Pickering

Another hot neighbourhood in metro Toronto includes Brock in the eastern suburb of Pickering near Lake Ontario (FSA: L1V) bordered on the north and south by Finch Avenue and Highway 401, where average prices were $334,216 in April 2009, an increase of 16% from $280,340 in March 2009 and an increase of 7% from $311,372 in April 2008.

Richmond, B.C.

The hottest neighbourhood in the Greater Vancouver/Lower Mainland is in Richmond (FSA: V6X), bounded north and south by Fraser River and Westminster Highway and east and west by Number 5 Road and Vancouver International Airport, where average prices were $448,469 in April 2009, an increase of 16% from $375,396 since March 2009 and an increase of 3% from $433,605 since April 2008.

Langley, B.C.

Another hot Vancouver neighbourhood is in the Township of Langley, 30 kilometres east up the Fraser Valley. Including the Langley Meadows neighbourhood (FSA: V2Y) this area is located directly south of the Trans-Canada Highway, north of 62nd and 56th Avenues, west of 248th Street and east of 196th Street, where average prices were $490,354 in April 2009, an increase of 15% from $414,560 since March 2009 and an increase of 12% from $437,041 since April 2008.

Winnipeg

North Kildonan in Winnipeg is a hottest neighbourhood (FSA: R2G), in an area bounded on the north, south and east by Glenway and Knowles Avenues, Oakland and McLeod Avenues and Day Street respectively. In this neighbourhood average prices were $225,111 in April 2009, an increase of 15% from $190,573 in March 2009 and an increase of 2% from $220,416 since April 2008.

Vancouver

The hottest neighbourhood in Vancouver is the downtown West Side/Coal Harbour area (FSA: V6E) bordering English Bay on the south, Hastings Street on the north, Burrard Street on the east and Broughton Street on the west. In this neighbourhood, average prices were $561,198 in April 2009, an increase of 15% from $476,331 in March 2009 and an increase of 0.3% from $559,314 in April 2008.

Ottawa

The hottest neighbourhood in Ottawa is the central area of Greenboro (FSA: K1T) bounded by Conroy Road and the CNR/CPR right of way. In this neighbourhood, average prices were $277,434 in April 2009, an increase of 15% from $235,956 in March 2009 and an increase of 3% from $268,028 in April 2008.

Toronto

The hottest neighbourhood in the City of Toronto includes High Park (FSA: M6P) bounded north and east by the CPR and CN tracks and on the south and west by Bloor Street and Runnymede Road, where average prices were $505,063 in April 2009, an increase of 14% from $436,369 since March 2009 and an increase of 7% from $473,392 since April 2008.

Oshawa

In the Toronto suburbs, one of the hottest neighbourhoods is Central Oshawa (FSA: L1J) bordered on the south and east by Lake Ontario and Oshawa Creek, on the north by Conlin Road and on the west by the Oshawa-Whitby town line. In this neighbourhood, average prices were $230,320 in April 2009, an increase of 13% from $177,912 in March 2009 and an increase of 4% from $196,357 in April 2008.

Halifax

The hottest neighbourhood in Halifax borders on the northeast shores of Halifax Harbour and Morris Lake (FSA B2W) where average prices were $222,756 in April 2009, an increase of 11% from $197,491 since March 2009 and an increase of 11% from $200,041 since April 2008.

An additional 17 neighbourhoods had increases of 10% to 27% over the past month from March 2009 to April 2009, but experienced declines over the past year from April 2008 to April 2009. Toronto, Vancouver and Calgary each have two of these neighbourhoods, while the others are Richmond Hill, Brampton, North York, Etobicoke, Winnipeg, Regina, Saskatoon, Edmonton, Abbotsford, Port Moody, and Burnaby.

Data in this survey was compiled from MLS data for Century 21 Canada by an independent research firm that provides real estate statistics for professional realtors throughout North America.

June 11, 2009 in Canadian Real Estate Market | Permalink | Comments (2) | TrackBack

Housing starts up in May

Canadian housing starts rose 9.2 percent in May, slightly better than expected, and was broadly based and encompassed both single and multiple segments, the Canada Mortgage and Housing Corp (CMHC) said on Monday. New home construction rose to a seasonally adjusted annual rate of 128,400 units in May from 117,600 units units in April, CMHC said.

The number of starts in May beat analysts' consensus expectations of 125,300 starts.

The seasonally adjusted annual rate of urban starts rose 11.1 percent to 107,800 units in May. Urban multiple starts rose to 60,900 units, while urban single starts climbed to 46,900 units in May.

The seasonally adjusted annual rate of urban starts in May rose 22 percent in Ontario, 16.8 percent in the Prairies, 7.3 percent in Atlantic Canada and 3.3 percent in Quebec.

Urban starts declined 5 percent in British Columbia.

CMHC said housing starts are expected to improve throughout 2009 and over the next several years to "become more closely aligned to demographic demand," which is currently estimated at about 175,000 units per year.

June 9, 2009 in Canadian Real Estate Market | Permalink | Comments (0) | TrackBack

Real estate franchise resurrects

Better Homes and Gardens Real Estate relaunches in Canada targeting Echo Boomers.

Better Homes and Gardens Real Estate LLC officially announced Friday it will revive its brand across Canada after reopening in the United States last summer, following a 10-year absence. Sherry Chris, the Canadian-born president and CEO of Parsippany, New Jersey based BHG Real Estate, said the timing of the brand's launch, in what she calls "the worst real estate market in 100 years," was out of her control.

BHG Real Estate's parent company, privately held Realogy Corp., had been negotiating for a few years to get back the trademark that was sold to GMAC more than ten years ago. It came due in July 2008. "In retrospect I am going to say it is a blessing in disguise," Chris said of the timing.

While real estate prices have dropped and sales have slowed in Canada - and all out collapsed in the U.S. - Chris said they are looking at it as an opportunity for the brand to start fresh and grow as the market eventually recovers.

In particular, BHG Real Estate is targeting the 18-to-34 year old "Echo Boom" generation, which is largely made up of first-time buyers who have been flooding the market in recent months, at least in Canada, thanks to historically low interest rates and falling prices.

"They are the driving force for this business," Chris said. "We've built our value proposition around the needs and wants of that consumer group, as well as what the agents that service them will look like."

Dale Ripplinger, a Regina realtor and president of the Canadian Real Estate Association, said he thinks it is a good time to launch a new brand in Canada. "There is always room for another franchise," he said.

Ripplinger believes BHG Real Estate has an interesting model, targeting the younger generation of buyers.

"With prices moderating, interest rates the way they are and the rental market tight in a lot of parts of the country, I think that first-time buyers are going to continue to be coming onto the market," Ripplinger said.

He said the new brand in Canada could also mean some "redistribution" in the industry, as BHG Real Estate looks to possible take over independent brokers or lure agents from other firms.

"When a new player comes into the market they are going to have to get their agents from somewhere," Ripplinger said.

"Some are a little more aggressive at purchasing existing companies. Some will attract existing agents from other companies because they offer a different model."

Chris said an official launch date in Canada has not yet been set, but the company is talking to potential partners across the country.

"If there was an independent company in a major city that wanted to grow and felt that they could grow better by partners and affiliating and utilizing technology Better Homes and Gardens has created, they would become a master franchise for a geographic area," Chris said.

She said from there, they would grow the business and share the royalty fees. It's the same model they are using in the U.S.

Chris said BHG Real Estate has the latest technology to help consumers and realtors, and is also marketing itself as a "lifestyle brand," offering tips and video on its website in areas such as decorating, remodelling, landscaping and green living.

Soutce: Brenda Bouw, Canadian Press

June 1, 2009 in Canadian Real Estate Market | Permalink | Comments (1) | TrackBack

 

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