MLS listings reach record high

Surge in Real Estate Listings Slows Home Price Increases

A surge in real estate listings in Canada's major markets slowed down the pace of price increases in April, according to a report released Wednesday by the Canadian Real Estate Association (CREA). The number of new listings of homes for sale on the Multiple Listing Service (MLS) reached its highest level ever in April, the CREA report said, with a seasonally adjusted 52,775 units coming on to the market - an increase of 1.8% from the previous month. Unadjusted new listings were up 17.7% from April 2007.

Meanwhile, the number of units sold in April was 34,781, down 6.1% from the same month last year. The average selling price was up 3.2% to $334,293 from $323,936 in April 2007. This is the smallest year-over-year price increase in over six years, CREA reported.

The increase in listings "means buyers face less competition in their search for a home," said CREA President Calvin Lindberg.

The sales drop and the modest price gain are well down from years of double-digit increases and are further confirmation that the boom days are over, said BMO deputy chief economist Doug Porter. No city in the country has reported a price decline from year-ago levels over the first four months of the year, Porter noted, "so the slowdown is still far from mimicking the U.S. experience. However, we would point out that new listings have climbed more than 8% this year, even as sales have slid."

CREA may term that as a more balanced market, Porter said. "That's a polite way of saying: If you're looking for double-digit price gains, dream on."

CREA said the new record in listings resulted largely from activity in Toronto and Saskatoon. The rise in new listings in these markets more than offset a decline in Edmonton and Calgary, where new listings retreated from record levels reached in March, the association said.

Seasonally adjusted sales activity edged up 0.8% month-over-month to 27,039 units in April, with stronger markets in Quebec City, Toronto, Winnipeg, Halifax-Dartmouth, Hamilton-Burlington, St. Catharines and Newfoundland & Labrador offsetting slower markets in Vancouver, London & St. Thomas, Calgary and Victoria.

"An increase in listings is resulting in a more balanced resale housing market in Vancouver, Calgary, Toronto and Montreal, the four most active of Canada's major markets," said CREA chief economist Gregory Klump. "New listings are forecast to rise further as sales activity continues retreating from the peak last year, resulting in an increasingly balanced resale housing market and smaller home price increases."

May 14, 2008 in Canadian Real Estate Market | Permalink | Comments (3) | TrackBack

Realtors realize more

Real estate fee revenue up 8.1% to10.6 billion

Real estate agents, brokers, appraisers and other real-estate industries reported total operating revenues of $10.6 billion for 2006, an 8.1 per cent increase from 2005. Statistics Canada says high demand for real estate has boosted both sales and prices despite a slight increase in mortgage rates. The agency's New Housing Price Index grew 9.7 per cent in 2006, close to five times the rate of inflation. With a 37 per cent increase in operating revenues, Alberta's real-estate market continued to lead national growth. Manitoba also recorded double-digit annual growth, at 19 per cent. The offices of agents and brokers generated 87 per cent of the country's total real-estate revenue.

Royal LePage profits up 44%

Brookfield Real Estate Services Fund, a major property brokerage services company that operates through the Royal LePage and other brands, reported its first quarter net profits rose to nearly $1.3 million from $912,000 last year as the company benefited from a robust home selling market that is now starting to moderate. The Toronto-based fund said yesterday it earned 13 cents a unit for the three months ended March 31, up 44 per cent from $912,000 or nine cents a unit for the first quarter of 2007. Royalty revenue rose to nearly $8.1 million from $6.9 million as the company expanded its Royal LePage and La Capitale network by more than 14 per cent.

May 7, 2008 in Canadian Real Estate Market | Permalink | Comments (5) | TrackBack

Canadian House Price Survey

House prices hold value for Canadians during uncertain year.

House prices have remained a bedrock of value for Canadians over the past year, despite a steady flood of gloomy media headlines about the slowing Canadian economy, the volatility of the world's stock markets, and the United States' housing crash and credit crisis, according to a national survey by Century21 Canada brokers.

The Century21 Canada 2008 Spring National House Price Survey of typical homes in 198 neighbourhoods within 66 cities across Canada shows that prices over the past year have increased in 167 neighbourhoods, remained flat in nine neighbourhoods and declined in 21 neighbourhoods.

Don Lawby, President of Century21 Canada, says the survey results reflect the solid foundations of Canada's housing markets versus the boom-bust excesses of the U.S. housing market. "The Canadian housing market is based on conservative lending practices and regulations, strong banks and Canadians' pride of ownership and diligence at building equity in their homes. These characteristics will sustain our housing market as Canada's economic growth rate slows this year," says Lawby.

"The price collapse in the U.S. housing market, which happened 18 months ago, was based on lending practices and mortgage interest deductibility tax regulations that lured new buyers into mortgages they couldn't sustain. Many existing homeowners took equity out of their homes and spent it on vacations, new cars and flat-screen televisions."

"Over the past several weeks, I've visited every region of Canada and spoken with hundreds of realtors. Housing sales volumes are easing in most communities as the economic growth rate slows, but prices in the spring of 2008 are strong and stable nearly everywhere across the country," says Lawby.

The Century21 Canada 2008 Spring National House Price Survey reflects the price of a typical home in communities across Canada. A "typical home" is the type of home that occurs most frequently in any given neighbourhood. The homes selected for inclusion in the survey are based on the knowledge and experience of Century21 brokers in each of the communities.

The Century21 Canada 2008 Spring National House Price Survey found that the largest price increases over the past year occurred in Saskatchewan, where jobs in the booming oil and gas, grain and potash industries are attracting record numbers of new residents. Prices for typical homes have increased over the past year as much as:

• 57 per cent to $330,000 for a modest 1,192-square-foot bungalow with three bedrooms and one bathroom in the Whitmore Park neighbourhood of Regina;
• 49 per cent to $379,000 for a 1,440-square-foot split-level with three bedrooms and two bathrooms in the Avalon neighbourhood of Saskatoon; and
• 48 per cent to $219,900 for a small 974-square-foot bungalow with three bedrooms and two bathrooms on a large lot in remote Prince Albert, a small city 140 kilometres north of Saskatoon known as "the Gateway to the North".

Other strong markets across the country include:

• Winnipeg, where prices in the River Park South, West End and Charleswood neighbourhoods increased 19 per cent, 24 per cent and 34 per cent respectively;
• Lethbridge, where prices in Southgate, Riverstone and Uplands neighbourhoods increased 21 per cent, 21 per cent and 23 per cent;
• Castlegar, where prices in the south, north and rural areas of the city increased 16 per cent, 18 per cent and 18 per cent;
• St. John's, where prices in the east and west parts of the city increased between nine per cent and 19 per cent; and
• Vancouver, where prices in the east, Yaletown, Kitsilano and Marpole increased between five per cent and 19 per cent.

In many communities, local conditions have produced strong, but variable price increases, including:

• Toronto, where a typical bungalow in North York increased six per cent, while a typical condo in North York increased 20 per cent. In Liberty Village, a condo increased 14 per cent, while a bungalow in Scarborough Bluffs increased 11 per cent.
• Montreal, where 11 neighbourhoods surveyed had increases ranging from three per cent for a split-level in Cote St. Luc and 11 per cent for a two-storey in Riviere-des-Prairies.
• Halifax and Dartmouth, where 12 neighbourhoods surveyed had increases ranging from five per cent for a split-level in Dartmouth Eastern Passage and 14 per cent for a two-storey in Halifax West.
• Abbotsford, where prices for similar sized bi-level homes in the central, western and eastern parts of the city increased two per cent, seven per cent and eight per cent respectively.

Softening markets across the country include:

Edmonton, where prices in the south, west and south west parts of the city declined between 12 per cent and 14 per cent;

Calgary, where four neighbourhoods had declines ranging from four per cent to 13 per cent and three other neighbourhoods had zero, three per cent and nine per cent increases;

High River, located just south of Calgary, where prices in three neighbourhoods for a two-storey, a townhouse and a bungalow declined four per cent, five per cent and nine per cent respectively; and

Mont Tremblant, where an alpine condo and a waterfront cottage declined 11 per cent and 14 per cent respectively, while a bungalow in the city increased six per cent.

May 1, 2008 in Canadian Real Estate Market | Permalink | Comments (1) | TrackBack

Canadian homes sales down 6.8%

Sales of existing homes fell 6.8 per cent to 117,051 units in the first quarter of 2008 compared with the previous quarter, the Canadian Real Estate Association said Tuesday. The figures were the third consecutive quarterly decline since activity peaked in the second quarter last year. Fewer transactions in February and March in Toronto as well as fewer sales in British Columbia helped to drive the figures down. Sales activity in Toronto accounts for almost one fifth of all existing home sales in Canada, according to the association.

It is also important to remember that 2007 was another record year for MLS residential property sales in Canada," said association president Cal Lindberg. "Any comparisons with last year means comparing with a record year. What the statistics indicate is that the residential housing market is easing back towards more historically typical levels."

Not all provinces saw a decline. Seasonally adjusted sales activity set a new quarterly record in Saskatchewan, and quarterly transactions reached their second highest level ever in Newfoundland & Labrador.

In March, around 38,128 properties traded hands via the Multiple Listing Service on a seasonally adjusted basis - a decline of 0.4 per cent from February, the association said. The number of MLS residential new listings hit the highest quarterly level ever in the first quarter. A seasonally adjusted total of 223,405 homes were listed in the first three months of 2008, up 5.5 per cent over the fourth quarter last year.

There were record quarter-over-quarter gains in new listings in Alberta and British Columbia, which offset a quarterly decline in new listings in Toronto.

The CREA_report said that the MLS housing market became more balanced in every province except Saskatchewan. The market in Alberta remained the most balanced in the country, while sellers' markets persisted in Saskatchewan and Manitoba.

"Housing markets are becoming more balanced and price gains are becoming more modest as a result," said chief economist Gregory Klump. "This trend is forecast to continue, as rising mortgage carrying costs and property taxes erode affordability."

The more balanced market was reflected in more modest price gains. The average residential price rose 6.4 per cent year-over-year to $312,583 in the first quarter of 2008. This increase represented the smallest year-over-year advance since the fourth quarter of 2001.

However, in Manitoba and Newfoundland and Labrador, average residential prices posted the biggest year-over-year increase ever in the first quarter of 2008.

"The credit crunch has had limited impact on Canadian mortgage lending to date. Resale housing activity will continue to be supported by rising after-tax incomes, high employment, and declining interest rates," said Klump.

Residential unit sales March 2008 (% change from March 2007):

• British Columbia 7,319 (-22.4)
• Prairie Provinces 7,519 (-28.2)
• Alberta 5,360 (-34.3)
• Saskatchewan 1,096 (-1.0)
• Manitoba 1,063 (-11.6)
• Ontario 15,408 (-18.1)
• Quebec 8,547 (-7.7)
• Atlantic Provinces 1,648 (-18.1)
• New Brunswick 514 (-22.6)
• Nova Scotia 814 (-16.7)
• Prince Edward Island 81 (-23.6)
• Newfoundland 239 (-10.2)
• Yukon 21 (-25.0)
• Northwest Territories 13 (-13.3)
• CANADA (actual) 40,475 (-19.1)
• CANADA (seasonally adjusted) 38,128 (-12.5)

Source: Canadian Real Estate Association

April 30, 2008 in Canadian Real Estate Market | Permalink | Comments (7) | TrackBack

Canada's real estate markets cooling

Prices of resale homes edged up in Canada last month, but at a more moderate pace, signalling further cooling in the once red-hot sector, the Canadian Real Estate Association said this week. The average price of a resale home in Canada's major markets was $329,383 in March (up from $327,477 in February and $325,183 in January). That leaves the average sale price up 4.0 per cent from March of last year.

For the first three months of the year, average prices realized through MLS sales were up 5.5 per cent from the first quarter of 2007. That's the smallest year-over-year price increase in seven years.

CREA figures show that overall sales fell last month by 18.7 per cent from a year earlier, while new listings grew in the first quarter. "Many major markets are becoming more balanced and price gains are becoming more modest as a result," said CREA chief economist Gregory Klump. "This trend is forecast to continue as rising mortgage carrying costs and property taxes erode affordability," he said.

Housing boom officially over

CREA president Cal Lindberg said the days of constantly setting price records are over. Economists agreed. "Canada’s six-year housing market boom is officially over," declared Doug Porter of BMO Capital Markets.

Still, the latest figures show that five major markets managed to set price records in March — Saskatoon, Winnipeg, Hamilton-Burlington, Ottawa and Halifax.

As usual, the most expensive real estate could be found in Greater Vancouver, where the average resale last month cost $616,496, up 11.1 per cent in a year.

The next most expensive markets were:

1. Victoria - $504,194 (up 13.3 per cent)
2. Calgary - $419,396 (up 1.0 per cent)
3. Toronto - $380,338 (up 4.1 per cent)
4. Edmonton - 343,760 (up 5.6 per cent)

The cooling trend in Canada still stands out from the situation south of the border, where average house prices have fallen 10 per cent in the past year amid a meltdown in the U.S. subprime mortgage market.

Not a single major Canadian market that CREA tracks reported lower year-over-year prices in the first quarter.

Sources: CREA and CBC News

April 20, 2008 in Canadian Real Estate Market | Permalink | Comments (5) | TrackBack

Real Estate Market shifts to Condos

Residential permits signal maturing real estate market.

The recent surge in multi-family dwelling building permits may reflect a maturing Canadian real estate market, not just in terms of the age of buyers but in prices, according to a Canadian market strategist. “The surge in demand for multi level units at 31% – that’s huge,” said HSBC Canada market strategist Stewart Hall of the trend revealed in the most recent data concerning builder intentions released from Statistics Canada Monday. “You can tell when a market begins to mature when you see demand shifting out of single units. Pricing pressure in single family homes is reaching a point where its pushing people out of the market.”

Thanks to the brisk pace of real estate price increases in Canada, Hall said would-be home buyers are shifting to more affordable condominium-style products. “It’s forcing them to say, ‘You know we want to get into the real estate game, but we can’t afford to buy a single family home,’” he said. Choosing a condo allows that segment of buyers to participate in the real estate market and build equity, he said.

Laurentian Bank economist Stephane Lavoie said he felt the increase in multi-family unit building permits reflects Canada’s aging demographics. “The population is getting older and we see new kinds of demands for housing,” he said, adding that ownership rates are higher among older demographics and that elderly people are more willing and able to pay higher prices for condos with extra services.

Lavoie said strong employment trends in Canada have helped to keep demand for residential construction healthy although he predicted housing starts in March might be down due to poor weather.

Hall agreed that a demographic shift is taking place in the residential real estate market. According to Hall, some of the shift is in demand but age isn’t the whole story. “It’s also a function of the market beginning to mature, and I use the word mature because I don’t believe we’re setting ourselves up for any implosion like we saw in the U.S.,” he said.

Looking at the overall decline in total building permit value in February, Hall said the numbers have to be looked at in the context of the prior month. While February saw an overall 1% month-over-month decline in the total value of building intentions fuelled by a plunge in Ontario’s non-residential construction sector, the swoon comes after that same province saw a 69% gain in non-residential permits in January. Without Ontario, building intentions in Canada would have been up by almost 10%.

Nationally, the value of non-residential permits fell 25.6% to $1.9 billion due to double-digit decreases in permits for all three components: institutional, commercial and industrial. Ontario construction intentions fell 16% to $2 billion, the lowest value since April 2007. Non-residential intentions in the province fell 44.9% while residential intentions were up 21.3%. Meanwhile, residential permits were up 21.3%.

“The fact Ontario was leading the way down probably has a lot to do with the large spike in January to unsustainable levels. I don’t think I’d read to much into that particular happenstance,” said Hall.

However, Lavoie saw the poor Ontario performance as reflective of the uncertain economy in the province. Now is not the time to be building a large facility to be shipping goods abroad, he said of the central Canadian economic picture.

On the other hand, Western Canada has a decent economy but also other problems, he said.

“The challenge in the West is not should I build something or not, it’s what does it cost to build and do I have the resources to build it,” Lavoie said.

April 8, 2008 in Canadian Real Estate Market | Permalink | Comments (2) | TrackBack

Prices Up - Market Down

Toronto's average price increases 11.3 percent to $432,679.

Canadian home-price increases moderated in the first quarter, but remained solid due to a strong economy, high immigration levels, and relatively low interest rates, according to a report released by Royal LePage Real Estate Services. Nationally, the average price of a detached bungalow climbed 8.3 percent to $336,834 in the first three months of 2008, according to their latest House Price Survey.

The price of a standard two-storey homes rose 7.1 percent year-over-year to $400,647, on average, and a standard condominium increased 6.9 percent to $240,423.

While those increases were down from the double-digit rises of previous quarters, they still stand in stark contrast to the hobbled U.S. housing market.

A crisis that began in the U.S. subprime mortgage sector has eroded the value of U.S. homes and threatens to push the country into recession.

"We know now that the Canadian real estate market has followed a markedly different path from that of the United States," said Phil Soper, president and chief executive of Royal LePage.

"While Canada will not escape the negative impact of a troubled American economy, Canadians' home equity should remain safe, as the market moves into a period of slow growth, but growth nonetheless."

Looking around the country, Saskatoon and Regina in the province of Saskatchewan had the hottest markets, with average prices for a detached bungalow soaring 50.3 percent to C$226,250 and 49.6 percent to C$158,500 respectively.

"In Saskatchewan, gold, diamond and uranium mining, along with prospering agriculture industries, have retained many would-be out-migrates, and the more moderate cost of living has also lured skilled workers from Alberta," the report said.

Despite the strong oil and gas economy in the province of Alberta, increases in home prices there have moderated from the frenetic pace of the past few years.

The price for a standard detached bungalow in Edmonton, Alberta, actually fell by 4.9 percent in the quarter to C$330,000.

In Calgary, Alberta, Canada's oil industry capital, the price for a standard detached bungalow climbed 9.9 percent to $442,852.

Vancouver, British Columbia, site of the 2010 Winter Olympics, remains Canada's most expensive real estate market. The price of a standard detached bungalow jumped 11.4 percent to C$852,750.

In Toronto, Canada's largest real estate market, the price increase was 11.3 percent to $432,679.

The price increase in Montreal was below the national average, rising 3.9 percent to $227,799.

The report noted that record snowfall in Central Canada left many city streets and sidewalks almost inaccessible to potential homebuyers during the quarter.

See the Royal LePage Market Report »

April 5, 2008 in Canadian Real Estate Market | Permalink | Comments (2) | TrackBack

Home resales down by 5.6%

Resale home sales dropped by 5.6 per cent in February compared with the previous month, with more than half the decline resulting from fewer sales in Toronto, according to data released by the Canadian Real Estate Association (CREA).

Sales dropped to 38,365 units in Canada in February from 40,646 in January, with 53 per cent of the national decline due to a cool-down in Toronto sales, CREA said.

“The buying activity peaked in Toronto in December, before Toronto's land transfer tax went into effect and well before the record-breaking winter storm activity,” CREA president Ann Bosley said in a statement.

On average, 18 per cent of the national resale activity for properties on the Multiple Listing Service is generated in the Toronto area, according to the Canadian Real Estate Association.

Sales also eased in British Columbia and Alberta. By contrast, resale activity hit its second-highest monthly level in Saskatchewan and its third-highest level in Prince Edward Island. In Saskatchewan and Newfoundland and Labrador sales in the first two months of 2008 were ahead of the same period in any other year.

Across Canada new listings also eased by 2.8 per cent from the previous month, although they still stood at their second highest level on record. There were 72,935 new listings in Canada in February, compared with 75,074 in January.

“Over all, the report highlights the moderating pace of housing activity in Canada, which will bring the level of activity to more sustainable levels. At the same time, the Canadian housing sector remains in much better shape than its U.S. counterpart,” Millan Mulraine, economics strategist at TD Securities Inc., said in a research note.

New listings reached new heights in Saskatchewan and Newfoundland, but declined slightly from the previous month in Ontario, B.C. and Alberta.

Across the country, price gains slowed, with the average resale home price rising 6.2 per cent year-over-year to $313,065. This was the smallest year-over-year price increase since November, 2004.

“Market balance for resale housing is evolving differently among provinces. British Columbia and Alberta are quickly becoming more balanced as higher prices pinch sales activity and new listings rise. Other provinces are also following suit,” CREA chief economist Gregory Klump said in a statement.

“By contrast, the resale housing markets in Saskatchewan and Manitoba remain very tight, and negotiations there highly favour the seller. For that reason, price increases are forecast to be biggest in Saskatchewan and Manitoba.”

April 3, 2008 in Canadian Real Estate Market | Permalink | Comments (1) | TrackBack

Calgary is now a buyer's market

A real turn of events for the real estate market is occuring in some of Canada's hottest urban areas. New MLS numbers from the Calgary Real Estate Board show it's now a buyer's real estaste market in that city.

Figures show listings up in March by more than 11 per cent, compared to the same month last year. The Calgary board's president says, "gone are the days of sellers naming their price."

Ed Jensen adds, "with one in five homes selling in today's market, this is a great time to buy a home."

The latest numbers also show the average sale price for a single family home in Calgary-metro in March, 2008 was $474,513. That is a 1.1 per cent decrease from March, 2007.

April 2, 2008 in Canadian Real Estate Market | Permalink | Comments (0) | TrackBack

Canada's housing boom loosing steam

The Conference Board of Canada is warning of "a lengthy slowdown" in Canada's residential construction industry with profits, already off 22 per cent in 2007, falling for the next two years. The longest housing boom in the post-war era is now "out of breath," following spectacular growth in the number of homes built and the prices paid for them, the board said in a report released Thursday. "Satiated pent-up demand and slower economic growth is leading to what is expected will be a long slowdown in the housing market," the report says.

After years of "relentless" house-price increases, declining affordability will be one of the primary factors weighing on the market, board economist Valerie Poulin said in an interview.

March 28, 2008 in Canadian Real Estate Market | Permalink | Comments (1) | TrackBack

Ontario Real Estate Market Watch

GTA and surrounding areas.

Toronto Real Estate Board Members recorded 6,015 resale home transactions last month, down 11 per cent in the Greater Toronto Area overall , 14 per cent in the City of Toronto and 9 per cent in the 905 suburbs compared to February 2007.

The average price increased 4% in GTA area and 2% in Toronto compared to February 2007. As well, the time on market in February was 30 days compared to 35 days a year ago.

However the number of properties available for sale has decreased seven per cent from last February, this indicate that there is no over-supply of homes on the market.

Despite the overall decline, some GTA neighbourhoods experienced strong sales in February, Sales in Pickering rose 28% overall compared to a year ago due to a strong increase in condo townhouse and condo-apartment transactions. and sales in Rexdale increased 18 %.

Hamilton-Burlington

The Hamilton-Burlington area real estate market reported a total of 828 unit sales in January, indicating an increase of almost one per cent over the same month last year. In addition, it is important to note that new units listed are over 15 per cent greater compared to January 2007.

Residential sales numbers where in line with those of seen in January 2007, and Commercial sales incresed 18% over last year. Average sale price of freehold properties increased 10% compared to January 2007.

Ottawa and surrounding areas

Members of the Ottawa Real Estate Board sold 654 residential units in January through the Board’s Multiple Listing Service® system compared with 764 in January 2007, a decrease of 14.4 per cent. There were 583 sales in December 2007.

The average price of residential properties, including condominiums, sold in January in the Ottawa area was $284,340, an increase of 9 per cent over January 2007.

Conclusion

While the numbers above indicate overall drop down in housing sales in Ontario, they also indicate a healthy real estate market in general. As predicted by the Canadian Real Estate Association, home sales are expected to level off to roughly 2006 levels this year, which was the second-strongest year on record.

Information in this report is collected from the Real Estate Boards operating in each area of Ontario.

March 19, 2008 in Canadian Real Estate Market | Permalink | Comments (1) | TrackBack

Housing affordability to improve

Affordability of homes is currently at worst level since 1990, says RBC Economics

For homeowners or those seeking to buy one, relief from deteriorating affordability of Canadian real estate is just around the corner, says a Royal Bank study, despite reporting the cost of owning a home reached its highest level since 1990 at the end of last year.

"We're forecasting both short-and long-term mortgage rates to fall further" in the months ahead, improving affordability in many areas of the country, Derek Holt, assistant chief economist at the Royal Bank, said in an interview Friday.

"The Bank of Canada should be cutting rates further as the year wears on, so that will bring variable rate products down further," he said.

"The longer-term five-year mortgage, we're forecasting that it'll drop by about three quarters of a percentage point by year end."

Back in the 1990s, housing affordability deteriorated across the country, with soaring interest rates and a recession sparking much of the trouble.

Last year, "a long upward trend in house prices driven by a strong economy that has seen growth in the job market" was the primary driver for deterioration in affordability, Holt said.

The affordability study, which measures how much pretax household income it takes to own a home, found that condos are the cheapest, needing 30 per cent of pretax income.

A townhouse takes about 34.5 per cent, a detached bungalow 42.5 per cent while a standard two-storey home required 48 per cent of pretax income.

Those costs rose everywhere in the country except in Alberta, where the cooling housing market saw costs of owning a home - such as servicing a mortgage, maintenance, property taxes - drop in all categories.

Also on Friday, the Canadian Real Estate Association released figures showing that MLS resale housing activity declined in February this year from January levels.

Seasonally adjusted MLS sales activity in the country's major markets edged down 6.4 per cent month-over-month to 26,588 units in February. The monthly decline largely reflected fewer sales in Toronto.

On the bright side, the RBC report says dropping mortgage rates, slower gains in house prices and income growth should improve affordability across most markets.

Vancouver was the most expensive market at about $650,000 for the standard two-storey home. That's defined to be the same benchmark at about a 2,200-square -foot home, two car garage in every region of the country.

Toronto comes next at $476,000, Calgary $462,000, Edmonton $354,000. In Atlantic Canada, the average price is $210,000.

In Alberta, where the housing market is cooling as scarcities in labour and supplies are addressed and people leave the province in search of jobs in other western provinces such as the oil fields in Saskatchewan, said Holt, the sales-to-listings' ratio has done an about-turn.

It "has gone from signalling very, very tight markets over the past couple of years to suddenly within the past six months or so markets with a fair amount of slack in them," he said.

In Calgary, for instance, the sales-to-listings ratio was 90-95 per cent at the peak in 2006, and then drifted down to about the 80 per cent mark in early 2007, said Holt. "Right now it stands just a hair over 40 per cent."

There's been a flood of new listings in the Calgary housing market and a curtailment of selling activity, he said. This has combined to lead to the fall in the sales-to-listings ratio. The story is similar in Edmonton.

"That's behind why we've seen price drops in an outright sense in the most recent quarter in those two markets," said Holt. "That helps out affordability."

As things stand now, said Holt, "it's a happy medium in terms of the balance of interests, because we think that sellers should retain most of the equity they built up over the last couple of years."

That also goes for people who have bought over the past few years and are just sitting on their homes, he said.

However, "it's a warning flag with just one quarter's worth of evidence so far, in what we're hoping is going to be a controlled cooling on their house prices."

So where are the most affordable places to live in Canada located?

"Classically it has always been Manitoba and the Atlantic provinces that have had the most affordable housing relative to local household incomes," said Holt.

The "most stressed points at the opposite end of the spectrum, without question, are Vancouver, Victoria and British Columbia," he said

The B.C. market has broken all-time records for the fraction of household income going towards home ownership costs in the three out of the four segments that the bank tracks, said Holt.

The one exception, he said, "has been condos that are the safety valve in this housing cycle expansion."

In the months ahead, Alberta, Calgary and Edmonton are likely to see the biggest swings in affordability.

"The charts that we run in our publication even within just one quarter showed a fairly sizable drop in the affordability ratios for Calgary and Edmonton," said Holt.

In the third quarter of 2007, to buy a standard two storey home in Calgary took up 47 per cent of the median household income in that city. Then one quarter later it was down to just over 45 per cent, said Holt.

"That's a fairly sizable swing within just a quarter," said Holt. "And I wouldn't be surprised to see it go down to the 40 per cent range by the end of this year with combined income growth but also potential for further slippage in prices."

March 14, 2008 in Canadian Real Estate Market | Permalink | Comments (0) | TrackBack

Home prices double in 10 years

Real estate markets across Canada posted solid gains over the past decade, and the economic fundamentals remain in place for continued, but more moderate growth. Between 1997 and 2007, average home prices in Canada almost doubled, to C$307,265 ($304,705) in 2007 from C$154,606 in 1997, for a 7.1 percent annually compounded rate of return, according to a report published by Re/Max.

The number of homes sold nationally rose over 57 percent to more than 500,000 last year from 331,092 in 1997. "Never before have we seen such a continuous run up in Canadian real estate," Michael Polzler, an executive vice-president at Re/Max, said in a statement.

Low interest rates, a robust job market and strong consumer confidence were all credited as drivers. Immigration and domestic migration to tap Western Canada's booming economy also helped lift demand.

Real estate considered cheap by international standards attracted droves of U.S., European, Middle Eastern and Chinese buyers to the Canadian market over the past decade, according to Re/Max.

The booming energy sector in Western Canada drew job seekers from across the country to that region, helping the housing market lead the way in terms of growth. "Given the continuation of sound economic fundamentals, it's expected that residential real estate markets across the country will continue to experience healthy activity, albeit at a more moderate pace," the report said.

In its 2008 housing outlook, released in the fall, Re/Max said it expected the domestic market to stay strong, but the red-hot growth seen in 2007 would likely cool, partly due to the economic slump south of the border.

February 26, 2008 in Canadian Real Estate Market | Permalink | Comments (1) | TrackBack

Is the boom winding down?

House resales were down 8% from last January

Resale home activity caught a case of the winter sniffles in January, a further sign Canada's mighty residential real estate market is finally in a slowdown. Last month, seasonally adjusted unit sales declined by 0.4 per cent from the month before and 8 per cent from January, 2007, according to data released Friday by the Canadian Real Estate Association (CREA).

“With the further dip in January, Canadian home sales are now well below year-ago levels, adding further evidence that the great boom is winding down,” said Douglas Porter, deputy chief economist at BMO Nesbitt Burns Inc., in a research note.

Steadily rising home prices have benched potential buyers, particularly in Alberta. In January, unit sales in Calgary dropped by 30.9 per cent from the year before and by 21 per cent in Edmonton. At the same time, new listings in those markets surged by 35.3 per cent and 61.1 per cent, respectively.

Across the country, new listings hit a new record 51,716 units in January, rising 9.3 per cent from the previous month. It was the largest month-over-month increase in seven years, and puts the market into “more balanced” territory than it has been at any other point during that time, according to CREA.

Prices across the country did cool somewhat, with the average price rising 8.6 per cent year-over-year to $325,183. This was the smallest year-over-year price increase since December, 2006, and compares with an increase of 11 per cent for all of last year.

“The overall increase in new listings stemmed mainly from a jump in listings in some of Western Canada's most active markets. Price increases in those markets will be more modest compared to what we saw last year,” Gregory Klump, chief economist at CREA, said in a statement.

Some of the country's weaker markets were in Alberta and parts of Ontario including Toronto, Durham Region and St. Catharines.

Stronger markets included Newfoundland and Labrador, where home sales rose 47.5 per cent from the month before and the average price rose by 17.1 per cent.

Saskatchewan was also strong, with sales in Regina rising by 43.7 per cent while the average price rose 69.1 per cent, and in Saskatoon by 37 per cent with the average price up 36.5 per cent.

February 18, 2008 in Canadian Real Estate Market | Permalink | Comments (1) | TrackBack

Canadian home sales edge lower

Canadian existing home sales were slightly lower in January, as the market returned to more "balanced" conditions after last year's record setting pace, the Canadian Real Estate Association said on Friday.

Sales edged down 0.4 percent in January from December, to 28,911 units, said CREA, an industry trade organization representing over 90,000 realtors.

Meanwhile, new listings on the multiple listings service (MLS) surged 9.3 percent from the previous month to 51,716 units in January. That is the highest monthly level ever, and the largest month-over-month increase in seven years.

"The overall increase in new listings stemmed mainly from a jump in listings in some of western Canada's most active markets," said CREA Chief Economist Gregory Klump in a release.

"Price increases in those markets will be more modest compared to what we saw last year," he added.

The unadjusted residential average price rose 8.6 percent year-over-year to $325,183 in January. That is the smallest year-over-year price increase since December 2006.

"The January MLS reports again show how the Canadian housing market is different than the market in the United States," said CREA President Ann Bosley.

"CREA had expected the growth in average price to slow in 2008, which is reflected in many markets. Sales levels are returning to what we would consider, on an historical basis, as more normal activity."

Cities that saw fewer sales were Toronto, Calgary, London and St. Thomas, Vancouver, St. Catharines, Halifax and Victoria.

February 16, 2008 in Canadian Real Estate Market | Permalink | Comments (0) | TrackBack

Winter Recreational Property Report

Winter recreational property prices remain red hot during Canada’s coldest months. Canadians are committed to their winter retreats despite rising prices.

While sunshine states such as Florida and Arizona have long enticed Canadians to purchase their winter retreats in warmer-weathered American cities, the uncertainty clouding the U.S. housing market has many Canadians favouring properties north of the border. In fact, 36 per cent of Canadians who own a winter recreational property or who are considering purchasing one cite they are more inclined to buy a property in Canada than in the U.S. because of the economic uncertainty plaguing our southern neighbours, according to the 2008 Royal LePage Winter Recreational Property.

The 2008 Royal LePage Winter Recreational Property Report comprises a nationwide research poll of Canadians’ attitudes on the market (conducted by Angus Reid) and an analysis of recreational property prices, trends and activity in selected winter leisure markets across the country.

Sky’s the limit when it comes to buying mountainside

For those looking to enjoy their own winter wonderland, Quebec, Ontario, Alberta and British Columbia offer the greatest selection of recreational areas, with real estate prices increasing from east to west. Strong demand combined with limited mountain-based properties has prices ranging from $180,000 to $850,000 in Quebec, $400,000 to $1 million in Collingwood, and $450,000 to $2 million in British Columbia for a standard detached, mountainside, three-bedroom chalet. A shortage of listings in areas of high demand, such as Whistler and Fernie, has led to property prices appreciating by as much as 10 and six per cent, respectively, in the past year.

“High levels of demand combined with limited inventory have pressured winter recreational property prices upward – a trend expected to continue well into the future,” said Lisa da Rocha, vice president, marketing communications, Royal LePage Real Estate Services. “Local buyers and foreign investors alike are taking advantage of Canada’s iconic snowy winters, and realizing winter recreational properties are a sound long-term investment.”

Let it snow, let it snow, let it snow – or not

While snowfall levels in North America have decreased over the past few decades; when asked, “Are you less likely to purchase a winter recreational property if a reduced level of snowfall continues?” 66 per cent of Canadians who own a recreational property or are considering purchasing one are clearly committed to the cold climate and answered that regardless of snow, a winter recreational property would still be their winter retreat.

Not so little cabin in the woods

While everyone’s idea of a winter retreat may differ, there are a variety of property types available across Canada from rustic chalets to grand lodges to maintenance-free condominiums to satisfy every need. Canadians list their top three features as a traditional chalet structure with a rustic charm, extra rooms for guests and grand fireplaces.

Buyers in areas including Whistler, Vernon and Big White, are demanding luxury properties with features including granite countertops, heated floors and stainless steel appliances.

Top Winter Recreational Property Features:

1. Traditional Structure with Rustic Charm
2. Extra Bedrooms for Guests
3. Grand Fireplaces
4. A Large, Open Great Room
5. Outdoor Hot Tub
6. Office with Internet Access
7. Professional Kitchen

Additional report findings:

More than four-in-ten (43%) respondents find the idea of owning a condo over a chalet attractive. Canadians aged 55 + (46%) find condos more appealing than standard chalets compared to those 35-54 years (38%), presumably for their maintenance-free lifestyle. However, in some markets such as Collingwood, there is an increased pressure on detached residences, versus the traditionally popular condominium.

Eight per cent of Canadians own a winter recreational property or are considering purchasing one in the next three to five years, with residents of British Columbia representing the largest purchaser population (13%) and Atlantic residents making up the smallest (4%). Quebec and Ontario residents comprise nine per cent and seven per cent of winter recreational owners and future buyers, respectively.

Winter recreational markets including Mont Tremblant, Canmore, Whistler and Fernie are increasingly attracting European buyers.

See the full 2008 Royal LePage Winter Recreational Property

February 1, 2008 in Canadian Real Estate Market | Permalink | Comments (1) | TrackBack

Canadian home sales set records

More than half a million homes sold via MLS® in 2007

National MLS® resale housing activity, new listings, average price and dollar volume all reached their highest annual levels ever in 2007, according to statistics released by The Canadian Real Estate Association (CREA).

Annual sales activity totaled 520,747 units in 2007, up 7.6 per cent from 2006 levels. This was the largest annual sales growth since 2002, and the first time transactions via the MLS® systems of real estate boards in Canada have surpassed 500,000 units sold in one year.

MLS® sales activity set new annual records in Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador. Saskatchewan posted the biggest annual increases in activity, up 31.9 per cent from 2006. Activity also rose 26.4 per cent in Newfoundland and Labrador, and climbed 18.6 per cent in Prince Edward Island.

“The results in 2007 show the strength and the affordability of the Canadian residential market,” says CREA President Ann Bosley. “The Bank of Canada may have cut interest rates on January 22nd because of weaker prospects for Canadian economic growth in 2008, but those lower interest rates will also help temper any erosion in housing affordability in Canada because of additional home price increases,” Bosley added.

“The challenge for the Canadian housing market will be the extent to which consumer confidence is affected by a slowdown in the U.S. economy,” the CREA President said.

Seasonally adjusted sales activity peaked in the second quarter. National activity has receded since then but it remains strong, having posted its four highest quarterly levels on record in 2007.

Fourth quarter national sales activity numbered 125,797 units, the fourth highest seasonally adjusted level on record. This is a three per cent decline from the third quarter, and resulted largely from quarterly declines in activity in British Columbia, Ontario and Alberta.

In contrast to the national trend, seasonally adjusted sales activity in Newfoundland and Labrador jumped 15.3 per cent quarter-over-quarter in the fourth quarter of 2007 and set a new quarterly record. Activity also reached the second highest quarterly level ever in Prince Edward Island, and the third highest quarterly levels ever in Saskatchewan and Ontario in the fourth quarter.

On a monthly basis, in December 2007 sales edged lower by 3.5 per cent from the previous month to 41,079 units. Activity posted month-over-month declines in every province except New Brunswick. The monthly trend for sales activity in December was strongest in Newfoundland and Labrador, with transactions there reaching their second highest seasonally adjusted level ever.

The national MLS® residential average price continues to climb. It set a new annual record in 2007, rising 11.0 per cent. In the fourth quarter, it rose 12.1 per cent year-over-year to $314,591. On a monthly basis, average price rose 14.1 per cent year-over-year to $317,825 in December – a new record, and the largest year-over-year price increase in almost 20 years.

MLS® residential new listings also set a new annual record in 2007. A total of 845,954 homes were listed via the MLS® systems of real estate boards in Canada last year, up 5.5 per cent from 2006 levels.

Sales rose more than new listings in 2007. This caused the national MLS® market to tighten marginally compared to the previous year, but the market was more balanced in 2007 than in each of the years from 2001 to 2005.

MLS® residential dollar volume rose 19.4 per cent annually to $160 billion in 2007, the highest level on record. MLS® dollar volume set new annual records in every province last year.

“Condo unit sales as a proportion of total activity continue rising in larger markets,” said CREA Chief Economist Gregory Klump. “Condo prices continue rising. Since condos are and will continue to be more affordable than single family homes, they will continue becoming an increasingly significant housing market segment.”

“The Bank of Canada will continue cutting its trend-setting interest rate for two reasons,” said Klump. “One is that slowing U.S. economic growth will cause Canadian economic growth and inflation to ease. The second is that financial market liquidity is needed in the aftermath of the subprime meltdown.“

“Slower job growth, not massive layoffs, are forecast for Canada in 2008,” Klump added. “With slower job growth, a low unemployment rate and the absence of widespread layoffs in Canada, consumer confidence will prove to be resilient. The domestic economy and the housing market will weather the sub-prime fallout with the help of lower interest rates”.

January 29, 2008 in Canadian Real Estate Market | Permalink | Comments (2) | TrackBack

Real estate expectations for 2008

The meltdown of the U.S. real estate market has many homebuyers wondering if and how it will affect the housing market in Canada, but market analysts feel the problems the U.S. is experiencing should have little impact on real estate in this country.

In fact Statistics Canada recently reported that the home ownership rate stands at its highest on record. Given the combination of consistent and relatively low interest rates, the availability of longer mortgage amortizations periods, and the fact that Canada's population continues to grow, it's not surprising that more and more people continue to enter the real estate market here.

In The Emerging Trends in Real Estate Report 2008, released by U.S.-based Urban Land Institute and PricewaterhouseCoopers, it sheds light on some of the fundamental differences on why Canada isn't expected to experience the same downturn as the U.S. market. Interviews with real estate executives in both Canada and the U.S. help explain a few of the reasons.

Canada benefits from a simpler economy and a more conservative investment environment than the United States, avoiding the consequences of lax underwriting and speculative building. Secondly, Canadian federal surpluses have given consumers more confidence which has led to increased spending on homes, retail goods and business expansion.

Another big difference has to do with mortgage loans. Unlike the U.S., the Canadian housing market has not been artificially driven by bad lending practices. As well, all mortgages in Canada are insured which is not the case in the U.S.

This may explain why according to the Canadian Real Estate Association, MLS resale housing activity in Canada's major markets broke all previous annual records by the end of 2007. In many areas it was a sellers market with the residential average price rising 11.6 per cent.

January 14, 2008 in Canadian Real Estate Market | Permalink | Comments (0) | TrackBack

Home prices 'surprisingly strong'

Moderation predicted in 2008: Royal LePage

Canada's real-estate market posted solid gains in the final three months of 2007, showing little sign of its usual midwinter slowdown, but price increases are likely to moderate this year, Royal LePage Real Estate Services reports.

Ontario and Quebec maintained steady activity despite the impact of the strong Canadian dollar on manufacturing in Central Canada. Toronto had a busy fourth quarter, partly attributed to purchases aimed at avoiding a new municipal land transfer that took effect Jan. 1. A two-storey house in Toronto cost an average of $506,900 in the fourth quarter, up eight per cent from a year ago, while a standard condominium increased 10 per cent to $280,505.

The average price of a Canadian bungalow in the fourth quarter was $337,555, up 11.6 per cent from a year earlier, led by increases of more than 50 per cent in Regina and Saskatoon.

The country's biggest residential real estate agency franchiser said Tuesday that bungalow prices rose 43 per cent in Saint John, N.B., and 21 per cent in Winnipeg, and double-digit percentage gains were also recorded in Edmonton, Vancouver and Victoria.

Nationally, the average price of standard two-storey properties rose 11.3 per cent year-over-year to $399,738, and standard condominiums gained 11.7 per cent to $240,395.

"The fourth quarter 2007 was surprisingly strong, with unseasonably high price increases and unwavering demand," stated Royal LePage president Phil Soper.

"As we move into the new year, activity levels are expected to wane from the frantic pace that many regions of the country experienced in 2007; however, average prices are expected to continue to rise, albeit at a much more moderate pace," added Soper, who has predicted average home prices will rise 3.5 per cent this year.

"Canadian buyers and sellers can expect healthy, balanced conditions in 2008."

The Prairies continued to dominate in price appreciation late in 2007, and home prices in Saskatchewan rose much faster than anywhere else in the country. Bungalow prices were up 55 per cent to $292,500 in Saskatoon and 52 per cent to $229,200 in Regina.

In Alberta, where prices in Edmonton were rising at a 50 per cent annualized clip early in 2007, the breakneck rise in recent years "has moderated demand and supports the current trend towards balanced conditions," the Royal LePage report said.

Edmonton and Calgary now have "a surplus of inventory," the report added, and "while demand is strong, the increased supply has impacted the resale market and homes that are not priced appropriately will take longer to sell."

Vancouver's prices, by far the highest in the country, continued rising strongly as the city's population and job market kept surging in advance of the 2010 Olympics. A two-storey house in Vancouver was priced at an average of $895,000 in the fourth quarter, Royal LePage said, an increase of 11 per cent from a year earlier. Vancouver bungalows rose 12 per cent to $795,250 and the cost of a standard condominium grew 11 per cent to $428,250.

In Atlantic Canada, Saint John, N.B., was propelled by the energy sector, with the average bungalow price rising to $196,500, from $137,000 a year ago, and two-storey house prices up 25 per cent to $255,000.

Prices for two-storey homes were up 16 per cent in Halifax to $231,667 and 11.5 per cent in St. John's to $219,332.

Montreal saw a 7.2 per cent price rise to $342,491, while two-storey homes in Ottawa appreciated 6.8 per cent to $306,500.

The quoted prices are based on opinions of fair market value as determined by Royal LePage.

January 8, 2008 in Canadian Real Estate Market | Permalink | Comments (0) | TrackBack

Canadian MLS® Statisitics

New annual record for MLS® home sales in 2007

With one month still to go in the year, MLS® resale housing activity in Canada's major markets broke all previous annual records by the end of November 2007, according to statistics released by The Canadian Real Estate Association (CREA).

Activity in Canada's major markets for the year-to-date in November 2007 totaled 345,577 units, up 2.7 per cent from the previous annual record of 336,646 sales set in 2005. Transactions in the first eleven months of 2007 have exceeded last year's annual total in almost all major markets.

Seasonally adjusted MLS® sales activity rebounded by 3.2 percent month-over-month to 29,992 units in November 2007 – the seventh highest monthly level on record. The monthly increase reflects a rise in activity in Vancouver, Toronto, Edmonton, Calgary, and Saskatoon.

Seasonally adjusted transactions also set a new monthly record in Newfoundland and Labrador in November. Activity reached the second highest monthly level ever in Saskatoon and Regina, and reached the third highest level in Winnipeg and Toronto.

Actual (unadjusted) MLS® sales activity was up 7.6 per cent in November from the same month last year. This was the highest number of transactions ever for the month of November.

Seasonally adjusted n ew MLS® residential listings edged up 0.4 per cent from October levels to reach 49,720 units – the second highest monthly level ever. New listings rose strongly in Toronto and posted month-over-month gains in Vancouver, Hamilton-Burlington, Calgary and Victoria. This offset fewer new resale housing listings in Edmonton, Winnipeg, London & St. Thomas, Newfoundland and Labrador, Saint John, Montreal and Quebec City.

The monthly rise in sales activity caused the resale housing market to tighten in November compared to the previous month. Activity is at or just below record levels in Regina, Winnipeg and Newfoundland and Labrador, making them the tightest major markets in November. Edmonton, Calgary and Windsor remained the most balanced major markets.

The major market MLS® residential average price rose 11.6 per cent year-over-year to $332,807 in November. This was the seventh consecutive month in which the increase in average price has exceeded ten per cent, and the largest increase since July. Average price surpassed all previous monthly records in Victoria, Kitchener-Waterloo, Montreal and Quebec City.

“Sales activity continues to run strong, even if it is off its peak set earlier this year in nearly all major markets,” said CREA Chief Economist Gregory Klump. “Demand remains strong due to continuing job and income growth, and upbeat consumer confidence. That is helping retain a seller's market in most major markets.”

“The number of new listings were virtually the same in November as October, so it was an increase in units sold through MLS® that meant a tighter market,” Klump added. The biggest single market sales increase in November was reported in eastern Newfoundland, including St. John's, where the number of MLS® units sold jumped 68 per cent compared to October. “It appears a series of announcements about the east coast oil industry has fueled consumer confidence and home buying sentiment in Newfoundland.”

The November MLS® statistics also show the Canadian housing market continues on a different track than the U.S. re-sale housing market. “Our association has not received any reports from REALTORS® that creditworthy homebuyers are having difficulty getting mortgage financing as a result of the sub-prime meltdown. Recent interest rate cuts and the availability of financing will buoy housing demand and economic activity in 2008,” CREA President Ann Bosley said.

“We also expect that financial market uncertainty stemming from the sub-prime mortgage lending meltdown in the U.S. will put the pressure on Canadian interest rates from rising in 2008,” Bosley added.

December 17, 2007 in Canadian Real Estate Market | Permalink | Comments (1) | TrackBack

Condominiums are clicking

Double-digit sales gains reported in most major markets

After more than three decades of slow but steady growth, the condominium concept has finally clicked with Canadian homeowners. The lifestyle has proven to be a solid investment in housing markets across the country, chalking up some of the most impressive gains in residential real estate in 2007, according to the RE/MAX Condominium Report released today.

Their universal appeal is substantiated, with every market reporting increased momentum in condominium sales volume over 2006 levels. In fact, 80 per cent of markets surveyed reported doubledigit gains in sales year-over-year, with 40 per cent reporting increases over 20 per cent. The greatest growth was experienced in Canada’s small to mid-sized markets. Leading the country, in terms of percentage increase in sales so far this year, are Regina (+57%), St. John’s (+54%), and Saskatoon (+33%).

“Deteriorating affordability levels in major Canadian centres have led to the resurrection of the condominium lifestyle in recent years,” says Michael Polzler, Executive Vice President, Regional Director, RE/MAX Ontario-Atlantic Canada. “Condominiums are clearly the answer to the skyrocketing cost of land and shelter that has all but eradicated the dream of homeownership for many first-time buyers.”

While price appreciation on freehold properties, in particular, was the primary factor in the upswing, the strong desire among baby boomers to lead an active, carefree lifestyle has also driven the concept to unprecedented popularity. The RE/MAX Condominium Report identified Greater Vancouver as the strongest market in the country – where close to 60 per cent of all residential sales now involve a condominium. Condominium presence is also on the rise in centres such as Toronto, Edmonton, Calgary, Regina, Ottawa, and Hamilton-Burlington, where condos now represent 20 to 30 per cent of all MLS sales.

“The white picket fence, sprawling green lawn and tidy urban bungalow has become an unattainable ideal for many first-time buyers—especially in the West,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “By necessity, condominiums have become the only practical means to homeownership for a growing segment of the population. Today’s entry-level purchasers aspire to manageable mortgage payments, sunset city views, and the non-stop action and amenities of central core living, all packed into 600 to 800 sq. ft. The momentum of the market in recent decades has redefined the home buying process.”

Condominium values were also up from coast-to-coast in 2007, with all major markets reporting an increase in average price. Thirty-three per cent of cities surveyed reported double-digit price appreciation. The most dramatic hikes were seen in Western Canada’s red-hot housing markets, led by Saskatoon (+24%), Calgary (+22%), Edmonton (+19%), Kelowna (+16 % for town homes, +12% for apartments), Vancouver (+14 % for town homes, +11% for apartments), and Victoria (+9% for town homes, +12% for apartments).

At the top end of the market, condominium ownership has been equated with lifestyle. Throughout 2007, aging baby boomers fuelled demand for luxury condominium units. Upper-end activity was reported to be on the rise in all markets examined, with the greatest appreciation occurring in Edmonton (+154 %), Greater Toronto (+98 %), Victoria (+85 %), Winnipeg (+58%), Vancouver (+49%) and Kitchener- Waterloo (+39%).

The maintenance-free factor, the ability to travel and to enjoy the best the city has to offer—from restaurants to recreation—were cited in overall condominium appeal. “In years past, there seemed to be a ceiling in terms of what buyers were willing to pay for this type of product,” says Polzler. “Widespread acceptance has seen that philosophy tossed out the window. In the upper-end especially, buyers have demonstrated a willingness to set new benchmarks, and in some cases, are spending more than what a detached home might cost. Multiple offers, once unheard of, have become a reality in some centres.”

New benchmarks for the most expensive apartment-style condominium units ever sold through MLS have been reported in several cities in 2007, including Vancouver ($18 million), Calgary ($3.7 million), Edmonton ($2.3 million), Winnipeg ($1.25 million), and Kitchener-Waterloo ($670,000). Given solid demand through all price ranges, it comes as no surprise that investors have been very active in the majority of markets surveyed, hoping to snap up a piece of the pie while demand remains at peak levels. Yet, with a growing number looking for a quick return on investment, swelling inventory levels have become a serious concern in several markets, most notably in Calgary and Edmonton, and to a much lesser extent, Kelowna.

“The impact of speculation, especially in Canada’s largest condominium markets, has yet to be determined, but concerns for the future are relevant,” says Ash. “In downtown Vancouver, an estimated 50 per cent of sales activity is attributed to investors, whereas as much as 60-85 per cent of new condominiums sales in Toronto’s downtown core reportedly involved investors in 2007. This is a major factor that could influence prices in years to come.” For now, a number of market fundamentals point to increased growth in sales, prices and demand well into 2008. These include vibrant economies, Canada’s aging population, rising prices, and higher levels of immigration, to name a few.

See the full report »

December 14, 2007 in Canadian Real Estate Market | Permalink | Comments (0) | TrackBack

First-Time Home Buyer Survey

Despite year after year of escalating house prices across Canada, first-timer buyers are successfully financing and buying homes that meet their needs, according to a survey by CENTURY 21 Canada brokers. Don Lawby, president of the real estste franchise, says that buyers have maintained their presence in today's housing market by combining innovative buying and financing strategies with practical compromises.

"First-time buyers often enter the market with an unrealistic list of expectations, but soon find they need to decide on a smaller house or accept a longer commute time," says Lawby.

Once they choose a home, first-time buyers must tailor mortgage terms to meet their circumstances and lifestyles. "Savvy first-time buyers are asking mortgage brokers to sort through the dozens of alternatives available from banks and other lending institutions."

"More and more first-timers are gifted with a significant down payment from their boomer parents as an advance on their inheritance," says Lawby. "In other cases, parents are providing no or low interest loans to help their kids get into the market."

According to Statistics Canada data from 1996 to 2006, home ownership among Canadians is continuing to increase year after year. The number of homes owned has increased from 6.8 million to 8.5 million, or 24%, over these 10 years, while the population of the country has increased from 28.8 million to 31.6 million, or 10%.

Over the last 10 years, the rate of home ownership increased most in Alberta (38% compared with a population increase of 22%), and Ontario (28% compared with a population increase of 13%). The lowest increase of home ownership occurred in Manitoba (11% increase compared with a population increase of 3%) and Newfoundland (8% increase compared with population decrease of 8%).

StatsCan data also shows a national trend towards the purchase of condos, townhouses and other multi-family dwellings - and away from detached single-family homes. In 1996, four in five (80%) Canadian homeowners owned detached single-family houses compared to three in four (74%) in 2006.

The CENTURY 21 national house price survey of typical first-time homes included 128 neighbourhoods within 55 cities and towns across Canada.

The most expensive cities for first-time buyers based on price per square foot are Vancouver, where a 412-square-foot condo in the downtown is $281,000 or $682 per square foot; the Toronto suburb of Thornhill, where an 800-square-foot bungalow on a 3,500-square-foot lot in East York is $480,000, or $600 per square foot; and downtown Toronto, where a 340-square-foot condo in trendy Liberty Village is $200,000 or $588 per square foot.

The least expensive cities for first-time buyers based on price per square foot are St. John's (2,150-square-foot two-storey bungalow, $170,000 or $79 per square foot), Halifax (1,408-square-foot semi-detached house, $129,900 or $92 per square foot), Windsor (850-square-foot 1 1/2-storey house, $91,000 or $107 per square foot), London (1,000-square-foot townhouse, $120,000 or $120 per square foot), and Sudbury (969-square-foot 1 1/2-storey house, $140,000 or $144 per square foot).

The survey also found that the most expensive smaller centres for first-time buyers based on price per square foot are Fort McMurray, Alberta, where the oil sands boom continues (1,120-square-foot bungalow, $565,500 or $505 per square foot), and Canmore, Alberta, in the majestic Rockies just east of Banff National Park (1,100-square-foot townhouse, $445,000 or $405 per square foot).

The most affordable prices in smaller centres for first-time buyers based on price per square foot are in Fort Erie, Ontario, 30 kilometres south of Niagara Falls on Lake Erie (1,157-square-foot 1 1/2-storey house, $96,000, or $83 per square foot), Summerside, Prince Edward Island (1,083-square-foot 1 1/2-storey house, $89,900, or $83 per square foot), and Yorkton, Saskatchewan, 190 kilometres east of Regina (896-square-foot bungalow, $83,000, or $93 per square foot).

Size verses Commute Time

In larger centres, first-timers usually choose small condos and townhouses near their jobs or in attractive neighbourhoods. Detached houses or large townhouses in these neighbourhoods are priced out of their range. In smaller centres, first-timers often choose older detached homes in attractive neighbourhoods and plan to upgrade the house or yard.

Although the number of homeowners has increased in the past decade, the number of Canadians owning detached residences has fallen. Statistics Canada data shows that in 1996, 80% of Canadian homeowners owned detached single-family houses compared to 74% in 2006.

• Over the 10 years, this trend was most evident in British Columbia, where the proportion of homeowners in single-family houses declined from 74% to 63%, in Ontario (from 80% to 74%) and in Alberta (from 84% to 78%);
• The trend was less evident in Quebec (from 74% to 71%), Saskatchewan (93% to 90%), Nova Scotia (87% to 85%), Newfoundland (88% to 86%), Manitoba (90% to 89%), New Brunswick (88% to 87%) and Prince Edward Island (90% to 89%); and
• Data from 2001 to 2006 in major cities shows that the trend away from detached single-family dwellings was strongest in Vancouver (from 61% to 49%) and Toronto (from 66% to 59%). In other major cities, the trend was more modest (Examples: Montreal from 60% to 58%; Calgary from 79% to 75%; and Halifax from 79% to 76%).

Alternative Financing

Lawby, who is also president of Centum Financial Group Inc., a national network of independently owned and operated mortgage broker firms, says the mortgage landscape is competitive and complicated. More and more first-timers are choosing mortgage brokers to help them sort through the terms offered by banks and other lending institutions.

Interest rates are a major component of mortgage terms. The Bank of Canada raised rates 1% from December 2006 to December 2007, and then cut rates a quarter point December 4, 2007.

In addition to interest rates, mortgage payments are affected by the size of the down payments and the length of the amortization period. Higher down payments and longer amortization periods reduce the monthly payments. First-time buyers are usually advised to lock in an interest rate for five years, opting for security instead of choosing riskier floating rates or shorter renewable periods.

Centum Financial Group Inc. says typical terms are 5.99% at a fixed term of five years, a 5% down payment and an amortization period of 25 years. Under these terms, a buyer purchasing a $275,000 home would make a down payment of $13,750 and would make monthly mortgage payments of $1,669.

Optional terms include a zero down payment and an amortization period of 40 years. Under these terms, a first-time buyer purchasing a $275,000 home would make monthly mortgage payments of $1,497.

Summary

Trends: First-time buyers must compromise to conquer record-high housing market

Trade-off comes between a smaller home and a longer commute

Buyers look to mortgage brokers for financing alternatives

Boomer parents helping their children

Canadians trending towards condo, townhouse ownership

December 13, 2007 in Canadian Real Estate Market | Permalink | Comments (0) | TrackBack

Homeownership immigrant priority

A new study shows immigrants are providing fuel for Canada’s residential real estate boom.

Just over one half (52%) of new immigrants to Canada have already purchased a home and did so, on average, within three years of arriving in the country, according to a new study released today by Genworth Financial. Genworth's First-Time Homebuyer Monitor documents a strong desire by recent immigrants to own a home of their own, with 91% saying that purchasing a home is either very or somewhat important to them. Reasons included a "good investment," "having children", "needing more space" and "owning gives you a feeling of pride."

The report is based on the experiences of Canadian immigrants polled in Toronto, Vancouver, Montreal, Calgary and Ottawa-Gatineau who have come to Canada within the last 10 years.

"This study illustrates how critically important the dream of homeownership is to recent immigrants to Canada," said Peter Vukanovich, president of Genworth Financial Canada. "Lenders, builders and realtors have done a good job serving this market, but we need to provide even more information about the home buying process so those new to Canada understand the options available to them before making this major decision."

Genworth has added a new Guide specifically designed for immigrant buyers to the homebuyer tools already available at www.genworth.ca. This Guide is available in Farsi, Spanish, Korean, Chinese and Punjabi. It builds on Genworth's existing New To Canada Mortgage Insurance Program, which allows those who've immigrated to Canada within the last 36 months to purchase a home with as little as three per cent down payment.

The new online Guide was specially designed in consultation with University of Alberta Professor Michael Haan, a leading expert on the immigrant homeownership experience in Canada.

"The information Genworth is releasing today marks an important step in our understanding of how immigrants experience the housing market in Canada," Professor Haan said. "Some international academic studies have strongly suggested that immigrants place a higher importance (than native-born residents) on homeownership, and that they have additional incentives for ownership, such as demonstrating success and permanency to themselves and others. This new data illustrates that desire among Canadian immigrants."

The survey highlighted some unique challenges facing immigrants who want to buy a home, including:

• 72 per cent of respondents recognized that buying a home without a credit history in Canada is a barrier.
• Two-thirds (66 per cent) said they lacked information about financing options.
• Over three quarters of respondents (77 per cent) said that finding a job in Canada that suits the level of education they attained in their country of origin was a problem.
• Almost half of respondents (45 per cent) said it is difficult to find information about financing a home purchase that is available in a language that is easy for them to understand.

Respondents also shared some concerns common among all homebuyers, including high housing costs (90 per cent), and saving for a downpayment (83 per cent).

"This new study highlights some of the challenges that remain in the homebuying process for new immigrants. But make no mistake, as this study shows, buying a home is a very important goal for most new immigrants. I see that on a daily basis," said Toronto real estate agent Bill Thom, who specializes in serving clients in Mandarin, Cantonese, Taiwanese, & Toisan.

The Genworth First-Time Homebuyer's Monitor is based on a telephone survey conducted between September 17 and October 3, 2007 among 418 new immigrants living in the five census metropolitan areas (CMAs) identified by Statistics Canada as having the largest proportion of new immigrants: Toronto, Vancouver, Montreal, Calgary and Ottawa-Gatineau. Results of this survey are accurate to within +/- 4.8%, 19 times out of 20.

The full First-Time Homebuyer's Monitor is available here »

December 8, 2007 in Canadian Real Estate Market | Permalink | Comments (0) | TrackBack

Canada's home sales setting records

Canadian existing home sales had their strongest October showing on record, and are on track to hit an annual record as well, the Canadian Real Estate Association said on Thursday. Sales were up 1.3 percent from September to 28,966 units. That followed three consecutive months of declines, said CREA, an industry trade organization representing over 92,000 realtors. CREA's records go back to 1980.

October sales were up 7.6 percent from the same month a year earlier. Sales in 2007 have risen year-over-year every month except September.

"The trend in new listings shows there is no panic selling in Canada's housing market," CREA president Ann Bosley said in a release.

The unadjusted average resale home price rose 10.6 per cent to C$333,544 in October from a year earlier, the sixth consecutive month that the increase exceeded 10 percent.

The strong numbers highlight the difference between the housing markets in Canada and the U.S., said Gregory Klump, the Canadian Real Estate Association's chief economist.

"We're in two completely different gears," Klump said. "We've got further house price increases on the horizon, and in the States, house prices are on the decline."

Data released in October showed U.S. sales of previously owned homes fell to a record low in September amid a crisis in U.S. subprime mortgage and credit markets.

In Canada, more than half the country's 25 major markets posted a monthly increase in activity, Klump said. "Negotiations still favor the seller in nearly all major markets", he said, suggesting demand remains strong.

Klump expects existing home price increases will continue to exceed overall consumer price inflation. The real estate association revised its market forecast for 2008, and is calling for a gradual slowdown in existing home sales, but with sales volume holding near record levels.

November 16, 2007 in Canadian Real Estate Market | Permalink | Comments (0) | TrackBack

The Canadian Housing Observer

Canada Mortgage and Housing Corporation has just released the 2007 edition of its flagship publication the Canadian Housing Observer. It presents a detailed annual review of housing conditions and trends in Canada and of the key factors behind them. The report is supplemented by online data resources accessible to anyone interested in exploring trends further or in conducting additional analyses of housing conditions.

The Canadian Housing Observer is an important tool for identifying, addressing and monitoring Canadian housing trends and issues. It is an ideal resource for housing planners; researchers; policy developers; home builders; housing finance and real estate professionals; and municipal, provincial, and federal housing specialists.

Highlighting the State of Canada's Housing, the report examines the state of Canada's housing from a variety of perspectives, combining national coverage with provincial and metropolitan detail. The report discusses influences on housing demand, current market developments, housing finance, housing affordability, sustainable communities, and other topics.

See the full 2007 Canadian Housing Observer »

October 26, 2007 in Canadian Real Estate Market | Permalink | Comments (0) | TrackBack

Canadian real estate sales slip

Sales in Canada's red-hot real estate market cooled in September, but average prices ticked up, according to new figures from the Canadian Real Estate Association. Seasonally adjusted sales last month in 24 major markets fell 3.1 per cent from August to 28,591, CREA said.

Sales in the four biggest markets of Toronto, Vancouver, Montreal and Calgary all declined. But the average price of a resale home rose by almost $3,000 to $328,660 — up 11.1 per cent from September last year.

Prices were up year over year in every major market except Thunder Bay, Ont., where they were 0.9 per cent lower.

The big price increases in Saskatoon, Edmonton and Calgary showed some signs of easing. Saskatoon's average resale home sold for $242,091 in September — still up 49.3 per cent from last year's average.

But the number of new listings in those hot western markets also rose dramatically year over year, CREA said, helping to bring more balance to those markets.

"Buyers in Alberta will likely take more time to shop and remove some of the steam from price increases," said CREA chief economist Gregory Klump.

He said resale housing activity across the country "remains strong," but it's "beginning to ease back from its breakneck pace recorded in the first half of the year."

Vancouver's real estate market once again topped the country's most expensive. The average home sold for $582,354. That's down by about $5,000 from August, but still represents a better than 10 per cent hike in the past year.

Average resale prices in the Toronto real estate market showed a $19,000 gain from August. The September average of $380,132 was up 8.9 per cent from September 2006.

In the July to September quarter, CREA said sales broke records in London, Ont., Ottawa and St. John's, N.L.

"The underlying economic conditions in Canada that affect real estate are still very strong," said CREA president Ann Bosley in a statement. She attributed lower overall sales to the "volume of new listings."

The report is based on sales through the MLS system.

October 16, 2007 in Canadian Real Estate Market | Permalink | Comments (0) | TrackBack

Existing housing sales down 4.1%

Resale housing sales remained strong in August even though they were off record highs in July, says the Canadian Real Estate Association. Seasonally adjusted sales dropped 4.1 per cent in August to 43,257 units from July's 45,102. Resale housing sales activity was down in most provinces, particularly in Ontario and Quebec.

But the real estate association says sales in August were up 7.7 per cent over sales in the same month of 2006.

The decline may mean the red-hot real estate market is returning to more normal activity levels, CREA says.

Meanwhile, the national average price of a residence rose 11.2 per cent year-over-year in August to $305,823, according to data from CREA's multiple listing service.

September 28, 2007 in Canadian Real Estate Market | Permalink | Comments (1) | TrackBack

Urban home prices continue to rise

Home prices in major Canadian cities continued rising strongly through the summer, Royal LePage Real Estate Services reported today. The company's third-quarter survey of the resale housing market found that on a national basis the average condominium price increased 15.7 per cent from a year earlier to $241,818, while standard two-storey properties gained 13.4 per cent to $407,613 and bungalow prices were up 14.3 per cent to $340,941.

"Much like the Canadian dollar, the Canadian housing market is charting its own course, quite independent from the United States and its currency and housing climate," declared Phil Soper, chief executive of the national realty operator.

"The strength of the Canadian dollar, and the fact that the country is adjusting well to its value, will continue to keep interest rates at their existing low-to-moderate levels, boding well for buyers looking to enter the market."

Saskatoon had the most dramatic year-over-year price appreciation - over 60 per cent - while a typical two-storey house appreciated 55 per cent in Saint John, N.B., 27 per cent in Fredericton, 26 per cent in Edmonton, 17.5 per cent in Calgary, 17 per cent in Regina, 15 per cent in Winnipeg and 11 per cent in Vancouver.

The Royal LePage survey of 250 neighbourhoods in 16 cities found that the Alberta market is easing from its recent intense activity, while "Central and Eastern Canada are now rising alongside their western counterparts as their local commodity industries receive increased attention."

It also noted increasing home ownership in Montreal, traditionally a city of renters.

Toronto's housing market "continued to set records throughout the summer," with a typical two-storey house rising nine per cent to $523,320. The country's biggest city "is poised for continued activity and rising average house prices as the city continues to attract both buyers relocating to the city centre from the suburbs, and newcomers to the country."

In Atlantic Canada, "the past few months have seen both Saint John (N.B.) and St. John's (N.L.) become the 'Calgarys' of the East, as several energy-related projects in New Brunswick and Newfoundland gain attention," Royal LePage reported. "While Halifax is not directly related to the oil industry, the city is experiencing a spill-over effect."

September 27, 2007 in Canadian Real Estate Market | Permalink | Comments (0) | TrackBack

MLS® home sales remain strong

The resale housing activity in Canada’s major markets edged back from record levels but remained strong in August 2007, according to statistics released by The Canadian Real Estate Association (CREA).

Seasonally adjusted national MLS® sales activity totaled 29,717 units in August 2007, down 5.3 per cent from July when monthly sales hit the second highest level on record. While MLS® sales edged lower in many major markets, the national monthly decline was largely the result of fewer sales in August in Toronto, Montreal, Edmonton and Vancouver.

The month-over-month decline in seasonally adjusted sales in August also reflected a return to