December 13, 2010
Canadian Economic Outlook May Be Brighter
Did you know the big economic picture in Canada may be brighter than most realize? David Rosenberg of the Globe & Mail credits our central bank and our federal government. He says the bank was correct in hiking interest rates early to defuse a housing bubble in Canada. So far, it looks like it has let the air out of the balloon slowly without having to burst it. Canadian employment and real economic activity have reached all-time highs. Business investment in machinery and equipment surged in Q3, following strong gains in Q1 and Q2, laying the groundwork for future productivity gains. And the fact that Ottawa did not blow a hole in our fiscal situation means that declining corporate tax rates can help nurture an investment-led revival in the economy. According to Rosenberg, all of this is good news for the long-term outlook for the Canadian economy.
November 22, 2010
October Real Estate Sales Rise
Did you know that national resale housing activity rose by 4.6% in October 2010, according to statistics released by The Canadian Real Estate Association (CREA). The monthly rise in activity builds on similar increases in August and September. The number of new residential listings on Canadian MLS® Systems edged up 1.3% on a seasonally adjusted basis in October. National sales activity and new listings have swung widely but synchronously, which has kept the market in balanced territory since the spring. The national average price trend remains stable, in keeping with a balanced market. October marks the fourth consecutive month in which the average home price has remained roughly even with year-ago levels.
November 15, 2010
Growth in the Strong 3rd Quarter
Did you know Canada’s residential real estate market saw year-over-year growth of 5% in the 3rd quarter? According to the Royal LePage House Price Survey (Oct. 19), price appreciation of 5% is historically typical of balanced real estate markets. “The third quarter was slightly stronger than anticipated, on new demand fuelled by improved affordability in many regions,” said Phil Soper, CEO of Royal LePage. “House price growth now sits just below the long term annual average of about 5%, but once this is adjusted for inflation, which is very low and expected to continue to be that way for some time, appreciation is right on track. Canadian homeowners will be pleased,” said Soper.
October 18, 2010
September Home Sales Up Slightly
Did you know that September home sales were 3% higher than they were in August? According to the Canadian Real Estate Association (CREA), September volumes were the best since May, but almost 20% lower then 2009’s record-setting September. The national average resale price continued to stabilize at $331,089. “The national average price remained on par with where it stood one year ago,” said CREA. The number of new listings remained near August levels, down 15% from April’s peak. The number of months of inventory in Canada stands at 6.6 months. That’s how long it would take to sell all the listed houses at the current pace of sales.
September 23, 2010
August Gains Show Market Resiliency
Did you know the Canadian real estate market is showing signs of resiliency, as sales of existing home rose 4.1% in August over the previous month? This is the first monthly increase since March, according to the Canadian Real Estate Association (CREA). Most of the gains were in Ontario and B.C. The number of new residential listings on Canadian MLS Systems edged up 1.9% in August. Average price rose or was stable in nearly two-thirds of all local markets on a year-over-year basis, but increases are shrinking in Canada’s most active and priciest markets, namely Toronto and Vancouver. “Rising interest rates and a projected slowdown in job growth means that the Canadian housing market is expected to continue to cool,” said CREA President Georges Pahud.
September 8, 2010
Canada’s Housing Market Has Stable Underpinnings
Did you know a U.S.-style housing slowdown is unlikely in Canada, says the C.D. Howe Institute. A decline in underwriting standards played a key role in the American housing boom and bust. That has not been the case in Canada, says the Institute. Canadian housing policies “worked well in reducing the possibility of a housing bust in Canada,” said the report. Virtually all the major economists have already said that a U.S.-style meltdown will not happen in Canada. Canada’s relative strength to the U.S. is our federal government policy disallowing banks from engaging in very high risk loans. “It will be in the interest of all Canadians if policy makers recall the lessons of the 2008 to 2009 experience should pressures to relax underwriting standards reoccur in the future,” says the Institute.
July 20, 2010
Real Estate Market Expected to Cool Slightly
Did you know that the latest Royal LePage House Price Survey, released on July 7, predicts Canada’s residential real estate market will slow slightly in the second half of 2010? While market fundamentals remain strong across most of Canada, sales activity was ‘front-loaded’ in the first half of the year and is expected to cool off. Prices are also expected to steady in the second half of the year.
Phil Soper, CEO of Royal LePage Real Estate Services says, “An expected increase in the supply of homes on the market will bring stabilization in prices… This should not be interpreted as a severe correction but rather a natural reaction to the market having peaked quite early this year.”
June 10, 2010
2010 Housing Market Forecast
Did you know that the Canadian Real Estate Association recently moderated their housing market forecasts for 2010? The national average home price is forecast to climb by 1.6% in 2010, reaching $325,400 according to the report released June 2. Sales activity is expected to hit 490,600 units, up 5.5% from the year before and a record number. Slowing sales in the Western provinces were largely to account for the moderation in forecast performance, according to CREA.
May 25, 2010
Canada Mortgage and Housing Corp Outlook
House prices will increase this year and next, Canada Mortgage and Housing Corp said on May 19. An “improved balance between demand and supply” will stabilize prices through the rest of this year,” CMHC said in its Q2 Housing Market Outlook. Prices will “rise modestly” in 2011, it said. CMHC said the average cost of a home by the end of 2011 should be $350,000, a gain of 1.4% over April’s record high of $344,968. CMHC senior economist Bill Clark said, “There was a big April gain in employment, and as the economy gets moving again people become more interested in housing.” CMHC attributed much of the recent sales activity to pent-up demand, as buyers returned to the market after sitting out during the recession. “Once this demand is exhausted, and as mortgage rates gradually rise, the pace of activity in the resale market will ease,” CMHC economist Bob Dugan said.
May 18, 2010
Royal LePage Survey of Realtors
Did you know a recent Royal LePage survey of 1,726 realtors found that 76% agree that the country’s real estate market is highly competitive? Phil Soper, CEO of Royal LePage says, “To state that there is a lack of competition in the Canadian real estate industry is simply incorrect. Every day, 100,000 men and women in the profession compete vigorously with each other and with unlicensed, unregulated alternatives.” In the survey, 86% of realtors are concerned that severe deregulation might erode standards of customer service and protection. More than 88% of respondents say they help clients avoid financial or transactional mistakes “very often” or “often.” For more information, go to http://www.royallepage.ca
April 26, 2010
Canada’s Real Estate Market Grew by 5.2% in 2009
Did you know Canada was in 12th place internationally in terms of real estate market growth? Canada posted a 5.2% year over year gain in 2009. Those are respectable numbers, especially during an economic downturn, but they pale in comparison to the top markets. Hong Kong was in first place with a 27.6% gain in prices during 2009, followed by China at 25.%, Israel at 21.3%, and Australia at close to 13.6%, according to a Frank Knight Frank LLP survey of global housing markets. Prices in Hong Kong and Asia have been driven upward by a “massive injection of liquidity into the economy by the Chinese government’s fiscal stimulus package,” said Knight Frank economist Liam Bailey. A Mainland Chinese buyer set a world record price for a condominium in Hong Kong last October, paying $57 million (U.S.) for a 6,000 square foot property, or more than $9,000 per square foot. In Toronto, an average new condominium sold for about $475 per square foot last year. Toronto’s market is much more sedate in comparison, but tell that to frustrated buyers caught in the middle of bidding wars. Canada’s performance has actually been more Steady Eddy than bullet train. Analysts say this has been positive for the economy as it avoids wild swings. In the United States, the market continues to flounder, with prices falling by 3.1% last year as a bottom has yet to be reached. However, U.S. existing home sales jumped by 6.8% in March according to reports released Thursday, beating expectations of a 5% gain.
April 11, 2010
Royal LePage House Price Survey Q1 2010
Did you know the Q1 Royal LePage House Price Survey shows that the real estate recovery, which began in the Q3 2009, continued unabated in Q1 2010?
“The first quarter of 2010 continued where 2009 left off, with more Canadians enthusiastically participating in a rejuvenated residential real estate market,” said Phil Soper, CEO of Royal LePage Real Estate Services. “One of the earliest sectors of the economy to return to growth after the difficult recessionary period, the housing sector has been a prime beneficiary of low borrowing costs and improving consumer confidence.”
House prices were up across all key housing types surveyed, with the average prices rising 10-11% in the first quarter year-over-year.
An analysis of Royal LePage data from Q1 2008 through Q1 2010 shows three different patterns of house price trends in Canada’s major cities: (1) Cities like Toronto and Vancouver show a rollercoaster effect in which prices dropped sharply then rose dramatically to levels that exceed pre-recessionary prices. (2) The non-stop growth markets were generally resilient through the downturn with incremental price appreciation over a two-year period (including Halifax, Ottawa, Regina, Saint John, St.John’s and Winnipeg). (3) In the level markets house prices have remained relatively unchanged (Calgary, Edmonton, Moncton and Montreal).
“Expect house prices to continue to rise, but the rate of appreciation should ebb steadily, month by month, throughout the remainder of the year, as balance returns to the industry,” concluded Soper.
