National Real Estate News

Seasonally adjusted national home sales dropped 2.8 per cent from near record levels reported in December. Ontario accounted for about half the national decline. Activity was also down in British Columbia, Alberta, and Manitoba, but reached new heights in Quebec.

Actual (not seasonally adjusted) residential sales activity in January 2010 was up 58 per cent from year ago levels, when national home sales activity reached the lowest level in a decade. Because activity began recovering in February last year, large year-over-year gains are expected to shrink over upcoming months.

The average price of all homes sold through the MLS® Systems of Canadian real estate Boards in January 2010 was $328,537, up 19.6 per cent from one year ago. In January 2009, the average residential sale price fell to the lowest level in almost three years. Year-over-year average price gains are being stretched by weakness one year ago, and are expected to shrink beginning next month.

The price trend is similar but less dramatic for the national weighted average price, which compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. It climbed 14.9 per cent year-over-year basis in January 2010.

The residential average price in Canada’s major markets also climbed 19.6 per cent year-over-year in January. As with the national counterpart, the price trend is similar but less dramatic for the major market weighted average price, which rose 13.1 from January 2009.

Across Canada, the seasonally adjusted number of new listings on Boards’ MLS® Systems edged up three tenths of one percent on a month-over-month basis in January to reach the highest level since November 2008. New listings rose in British Columbia, Alberta and Newfoundland, offsetting declines in other provinces. The actual (not seasonally adjusted) number of new residential listings was up 3.4 per cent from one year ago.

“The resale housing market is becoming more balanced in a number of provinces, including my own province of Saskatchewan,” said CREA President Dale Ripplinger. “A more balanced market is likely to result in smaller price increases going forward, with buyers in less of a rush due to an increase in supply. That said, market conditions vary across Canada, so buyers and sellers are wise to consult with a REALTOR® since they know current conditions in your local market.”

Strong demand for resale homes continues to draw down supply. There were 170,199 homes listed for sale on Boards’ MLS® Systems in Canada at the end of January 2010, a decline of 18 per cent from levels reported for the same month in 2009. Nationally, there were 4.4 months of inventory in January 2010 on a seasonally adjusted basis. This is up slightly from 4.2 months in December.

The actual (not seasonally adjusted) number of months of inventory in January 2010 stood at 6.6 months. This is well below where it stood one year ago (12.8 months), but slightly higher than it was in the month of January in the years 2004 through 2008. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.

“January results suggest that the national resale housing market may be past the recent peak,” said CREA Chief Economist Gregory Klump. “One car doesn’t make a parade, so a few more months of results showing a cooling trend will be required before talk of a Canadian housing bubble begins to fade. It could take until the second half of the year before a cooling trend becomes evident, since home buying activity may continue to be accelerated in the first half of 2010 by expected interest rate increases, and by the introduction of the HST in Ontario and British Columbia on Canada Day.”

Charts and statistics in pdf format can be found here.

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OTTAWA – February 8, 2010 – The Canadian Real Estate Association has revised its forecast for home sales via the MLS® Systems of Canadian real estate boards in 2010, and extended the forecast to 2011.

With Canadian economic growth rebounding from the recession, the unusually severe decline in sales activity in early 2009 is not expected to recur in 2010.  Annual activity in 2010 is forecast to be well above the previous year’s level as a result.

CREA forecasts national activity will reach 527,300 units in 2010, up 13.3 per cent from 2009. This would represent a new annual record, standing 1.2 per cent above the previous peak in 2007. Low interest rates are expected to boost housing demand in the first half of the year, resulting in strong annual sales growth in nearly all provinces in 2010, led by British Columbia and Ontario.

National home sales activity is expected to remain strong in the first half of 2010, fuelled by low interest rates and homebuyers motivated to avoid the HST before it comes into effect in Ontario and British Columbia.  Over the second half of the year, national activity is expected to trend downward as the last of pent-up demand is exhausted, interest rates begin rising, and the HST comes into effect in Ontario and British Columbia.

Interest rate increases will contribute to weaker national sales activity in 2011.  National home sales activity is forecast to decline 7.1 per cent to 490,100 units in 2011, putting it on par with annual levels reported in 2005 and 2006.

“Although interest rates are expected to rise, they will still be low enough to keep affordability within reach for many homebuyers requiring mortgage financing, and support overall housing demand,” said CREA President Dale Ripplinger.

The national average home price is forecast to climb 5.4 per cent in 2010, reaching a record $337,500, with average price gains forecast in all provinces. The national average price increase will continue to reflect upward skewing from the rebound in activity among Canada’s priciest markets, particularly in British Columbia and Ontario.

The national average price is forecast to ease by 1.5 per cent in 2011. Modest average price gains are forecast for all provinces except British Columbia and Ontario, whose share of national activity is expected to ease. The shift in the contribution made by provinces toward national activity will continue skewing the annual comparison in the national average price in 2011.

The price trend is similar but less dramatic for the weighted national average price, which compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. The weighted national average price is forecast to climb 4.8 per cent in 2010, and remain stable in 2011.

“Improved financial market stability and recovering global economic growth mean that home sales activity in 2010 is unlikely to repeat the dive it experienced in late 2008 and early 2009,” said Chief Economist Gregory Klump.

“Fiscal restraint, a strong Canadian dollar and a subdued inflation outlook point to marginal interest rate increases over the next couple of years, especially if the U.S. economic recovery proves to be weak and protracted,” said Klump.

“The Bank of Canada will need time to gauge the effect of interest rate increases on Canadian economic growth,” Klump said.  “It recognizes that consumer debt burdens are running high, so it will want to gauge the impact of interest rate hikes on domestic demand and overall economic growth. Changes in interest rates impact the economy with a lag, so the timing and magnitude of interest rate hikes will be tricky, given that the Bank expects the private sector to lead economic growth once temporary government stimulus spending expires,” he added.

“The decline and subsequent rebound in sales activity for homes in the upper price spectrum in some of Canada’s priciest markets skewed average prices upward in the second half of 2009 and into 2010. This segment of housing activity in Ontario and British Columbia is expected to ease beginning in the second half of 2010, causing average prices to moderate in those provinces,” said Klump.

“A downward trend in national sales activity combined with an increase in listings will result in a more balanced market. Although builders are understandably more upbeat than they were during the depth of the recession, speculative building will likely continue to be held in check. As a result, while the real estate market will become more balanced, Canada will continue to avoid the massive realignment in housing supply and demand experienced in the U.S.”

CREA Residential Market Forecast:

NOTE: All statistics contained in this release are obtained through analysis of the MLS® Systems of real estate Boards across Canada.

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What do you think about this article posted by the Vancouver Sun on September 24, 2009? Have we seen the bottom of the housing market here in Canada and specifically Kamloops or was it a mild correction? What will the result be once interest rates begin to increase? Have we seen the worst of the recession here in Canada? I would love your opinion.

OTTAWA — The worst is over in the Canadian residential housing market, according to a new industry report that forecasts growth in the sector in the fourth quarter of the year.

According to the Re/Max Bricks and Mortar Report, “the bounce-back that began in early spring has made this recession one of the shortest on record for real estate.” Sales have increased in more than half of the 11 markets surveyed for the report, and values have surpassed “record-breaking” 2008 levels in seven of the markets.

“The strength of the residential housing sector cross-country has taken many economists and housing analysts by surprise once again,” said 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… . While there may still be some challenges down the road, the worst is definitely behind us in the housing industry.”

Low interest rates and falling housing prices in the midst of the economic downturn helped drive sales growth, Re/Max said. Sales in Vancouver, one of Canada’s most expensive housing markets, rose 14 per cent from January to August, while sales were up 7.4 per cent in Victoria over that period, 6.2 per cent higher in Edmonton and up five per cent in Regina. In Ottawa, where the real estate market remained fairly steady through the economic crisis because of the city’s relatively stable employment situation, sales were up 2.4 per cent.

Nationally, the average price of a home is about $312,585, up 0.5 per cent from January to August, but there was a much larger jump in St. John’s, N.L., where the average price rose 18.1 per cent to $203,584. There have also been substantial increases in Regina (6.4 per cent), Halifax-Dartmouth (3.5 per cent), Winnipeg (3.5 per cent) and Ottawa (3.3 per cent).

“Prices are on the upswing and inventory levels are tightening, so the push toward home ownership is expected to continue throughout the fall and possibly into early 2010,” says Michael Polzler, executive vice-president, Re/Max Ontario-Atlantic Canada.

The picture south of the border isn’t as optimistic. A report Thursday showed existing home sales in the United States fell in August after four months of gains. Still, BMO Capital Markets economist Jennifer Lee suggests there is room for hope, pointing out that inventories continue to drop and while housing prices continue their downward trend, the cuts are not as deep as they were earlier in the year.

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This article was written by the Canadian Press June 15, 2009.

Resales of existing Canadian homes showed continuing improvements in in May, with both the number of transactions and the national average price on the rise, according to the Canadian Real Estate Association.

There were 49,521 existing homes sold in May, less than one per cent below the comparable month of 2008. The national average sale price in May hit the highest monthly level on record, at $319,757, which was up four-tenths of a percentage point from the previous record in May 2008.

The real-estate association said the dollar value of sales through its members reached $11.4 billion in May, up 10 per cent from the previous month and more than 50 per cent above the low of $7.5 billion in January. The association said the the rebound in activity was led in some of the most expensive local markets in Canada and that had the effect up pushing the national average price upward. On a seasonally adjusted basis, the number of sales in May was eight per cent above April’s and 43 per cent above the low point in January.

Although the number of resales has been rising, fewer properties have been put on the market through the Multiple Listing Service run by CREA members. New listings fell to a seasonally adjusted 65,070 units in May, 19 per cent below the peak reached a year earlier and the lowest since December 2005. “Inventory levels are still high in many markets, but fewer new listings and rising sales activity suggests that the selection of homes available for sale may shrink as the year progresses. The supply of homes up for sale needs to be drawn down further before average price increases become more widespread among local markets,” said CREA economyist Gregory Klump.

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