September 24, 2009
Real estate market in recovery mode
With the worst of the recession over, residential real estate markets in major Canadian centres are poised for growth in the final quarter of 2009, according to a report released today by Re/Max.
The Re/Max Bricks and Mortar Report found the bounce back that began in early Spring has made this recession one of the shortest on record for real estate. Low interest rates, pent-up demand, and improved affordability levels have all played a role in the recovery now well-underway. Percentage increases in sales from January to August 2009 were led by Vancouver, (up a substantial 14 per cent to 23,158), Victoria (up 7.4 per cent to 5,266), Edmonton (up 6.2 per cent to 13,691), Regina (up five per cent to 2,597), Ottawa (up 2.4 per cent to 10,830) and Toronto (up 1.8 per cent to 58,421). Housing values are already ahead of record-breaking 2008 levels in seven of the 11 markets surveyed, including Newfoundland-Labrador (18.1 per cent year to $203,584), Regina (6.4 per cent to $244,088), Halifax-Dartmouth (3.5 per cent to $239,633), Winnipeg (3.5 per cent to $207,006), Ottawa (3.3 per cent to $301,684), and Toronto (up 0.3 per cent to $385,978). Nationally, average price hovers at $312,585, up 0.5 per cent over one year ago.
“Markets are heating up across the country,” says Michael Polzler, Executive Vice President, Re/Max Ontario-Atlantic Canada. “Purchasers are clearly taking advantage of affordable prices and rock bottom interest rates. Those who missed the boat in years past have found that sitting on the sidelines can be a costly move. Prices are on the upswing and inventory levels are tightening, so the push toward homeownership is expected to continue throughout the Fall and possibly into early 2010.”
The recovery of Canada’s resale housing markets speaks to the tremendous value Canadians place on the importance of owning a home. The number of Canadians overall who own a home has increased since 1981 from 62.1 per cent to 68.4 per cent, with some markets posting even higher homeownership rates — Calgary (74.1), St. John’s (71.5), Regina (70.1), and Edmonton (69.2). Significant gains have also been made over the same period in markets such as Ottawa — where homeownership levels rose from 51.4 per cent to 66.7 per cent — and Toronto, where levels rose fro m 57.3 to 67.6 per cent.
“The strength of the residential housing sector cross-country has taken many economists and housing analysts by surprise once again,” says Elton Ash, Regional Executive Vice President, Re/Max of Western Canada. “In terms of its impact on the resale market, by historical standards, this recession was one of the mildest. The resilience of bricks and mortar has been demonstrated time and again. While there may still be some challenges down the road, the worst is definitely behind us in the housing industry.”
Over the past thirty years, the Canadian residential real estate market has experienced three major downturns – 1981, 1989, and 2008. While there have also been regional fluctuations throughout the years, return on investment over this period has been substantial, with Vancouver, Victoria, Toronto, Regina and Ottawa leading the country in terms of price appreciation.
The overall stability of real estate as an investment has also played a role. Markets like Halifax-Dartmouth, Regina, Ottawa, Winnipeg and London have provided steady returns (especially in recent years), with minimal fluctuation.
Public sentiment can best be illustrated by a recent Angus Reid Omnibus Survey that asked the question “In which do you feel more comfortable investing your money? The stock market or real estate.” Out of 1,000 respondents from coast-to-coast, 77 per cent chose real estate. The results of the Re/Max Bricks and Mortar Report are clearly representative of this national dynamic at work.
Source: Re/Max Ontario-Atlantic.
September 17, 2009
Toronto Real Estate Board reports:
GTA Realtors Report Sales and Price Growth in September
In the first two weeks of September, Greater Toronto Realtors reported 3,361 sales – up 23 per cent compared to the first two weeks of September 2008. The average price for these transactions was up eight per cent year-over-year to $393,818.
“An increasing number of positive reports pointing to economic recovery coupled with low interest rates have kept households confident in purchasing a home,” said TREB President Tom Lebour.
Year-to-date sales, at 61,676 are up three per cent compared to 59,971 in 2008. Average price, at $386,302, is up by one per cent from $383,776.
“Tighter market conditions since May, as evidenced by rising sales relative to listings and declining average days on the market, have resulted in stronger average price growth,” explains Jason Mercer, TREB’s Senior Manager of Market Analysis.
September 15, 2009
Canadian real estate sales up 18.5%
Low interest rates continue to attract home buyers to the housing market.
Home resales held steady on a monthly basis in August, but increased by 18.5 per cent compared to the same time last year, the Canadian Real Estate Association said today. A total of 42,483 homes traded hands across the country through the MLS listing service. Housing resales in Vancouver increased by 117% over last year’s levels.
The annualized gain represents the third consecutive year-over-year gain of more than 15 per cent, and it’s the largest year-over-year gain in more than two years.
Sales volumes were up in most major markets across the country, according to data from the Multiple Listing Service, the national residential average price rose 11.3 per cent from year-ago levels to $324,779.
“A rebound in activity at the higher end of the price spectrum in some of Canada’s priciest markets is skewing the national average price upward,” the agency said. The August price average set records in every province except Alberta.
Listings down
The number of new listings posted the eighth consecutive decline from year-ago levels. New residential listings were down 8.9 per cent year-over-year to 64,167 units, the lowest level for the month of August in five years.
Fewer listings coupled with improved demand is drawing down inventories, the agency said. There were 212,227 homes listed for sale in August, down 13.3 per cent from last year’s levels.
That was the fourth consecutive year-over-year decline in active listings, and the largest decline in more than six years.
September 13, 2009
Home affordability index declines
RBC Survey say homes in Toronto are now more affordable.
Affordability rates remain worse than average in Toronto, where a two-storey home declined 0.7 percentage points to 55.7 per cent of income. That means it takes more than half of pre-tax household income to carry a mortgage, property taxes and utilities. It had improved 8.6 percentage points in the past year and is now close to its historic average of 53.6 per cent.
The price of a standard two-storey home in Toronto fell 2 per cent in the second quarter of 2009 to $509,300, the RBC report says.