National Real Estate News

The Demographia 7th Annual International Housing Affordability Survey for 2011 is out. It rates metropolitan markets for affordability of the housing in each market. Australia, Canada, Ireland, New Zealand, the United Kingdom, the United States and China (Hong Kong) are all discussed. I have included a portion of the report below. You can access the full report by clicking the link at the bottom of this post.

The 7th Annual Demographia International Housing Affordability Survey expands coverage to 325 markets in Australia, Canada, Hong Kong, Ireland, New Zealand, the United Kingdom and the United States. This edition marks the addition of Hong Kong. The Demographia International Housing Affordability Survey employs the ―Median Multiple‖ (median house price divided by gross annual median household income) to rate housing affordability(see chart ES-1 on page 7) . The Median Multiple is widely used for evaluating urban markets, and has been recommended by the World Bank and the United Nations Harvard University Joint Center on Housing.

Housing Affordability in 2010

Housing affordability was little changed in 2010, with the most affordable markets being in the United States and Canada. The United Kingdom, Australia and New Zealand continue to experience pervasive unaffordability.

All Markets

Among all 325 markets surveyed, there were 115 affordable markets, 106 in the United States and 9 in Canada. There were 94 moderately unaffordable markets, 74 in the United States, 17 in Canada and 3 in Ireland. There were 42 seriously unaffordable markets and 74 severely unaffordable markets. Australia had 27 severely unaffordable markets, followed by the United Kingdom with 21 and the United States with 15. Canada had 6 severely unaffordable markets, while New Zealand had 4. China’s one included market, Hong Kong, was also severely unaffordable.

Vancouver remains one of the most Severely Unaffordable markets with only Sydney, Australia and Hong Kong being more unaffordable.

Click here to read the full report.

I found this audio track on the NPR (National Public Radio: United States). They discuss the Canadian economic position versus the American. It is a short three minute piece. This was posted by the NPR on December 11th, 2011. I have included the short introduction below and the link to the broadcast.

America’s biggest trade partner, Canada, sailed through the economic downturn almost unscathed, with low unemployment, no mortgage crisis and not a single major bank failure. As part of WBEZ’s Front and Center series, Brian Mann reports on how Canada emerged as one of the world’s most stable and prosperous economies. Link to Audio

Link to article

This article appeared on The Canadian Real Estate Magazine on December 8th, 2011.

The real estate market in Canada is headed toward a 10%-15% drop in prices over the next few years, as interest rates eventually increase, said the CIBC’s Benjamin Tal on Thursday.

The CIBC economist also forecast that the Canadian economy will have a lackluster 2012, although will avoid recession.

Tal said the average price of a house has risen 28% from a cyclical low in January 2009. But that average has been largely skewed by strong activity in relatively expensive markets of Vancouver and Toronto, he said, whereas the overall national market is more multi-dimensional.

“But even a multi-dimensional market can overshoot,” said Tal. “And the likelihood is that prices in the Canadian market and its sub-segments are higher than what can be explained by factors such as income growth, rent, and household formation.”

He fell short of calling the pending price drops a sign of a bubble in the Canadian market, however.

Short of a huge macro shock, the risk is small that in the near term a large-scale forced selling materializes and triggers a precipitous plunge in house prices,” said Tal.

As for the national economy, CIBC predicted a 3% growth in the global economy next year, well below the 5% pre-recession rate.

“As an open economy, Canada can’t help but feel the disappointment of a barely half-speed world,” said Avery Shenfield, chief economist at CIBC.

Shenfield said Canada’s economy will grow by 2% over the next two years, with the jobless rate remaining about the same as now.

Link

This article appeared in The Province on December 7th, 2011 and was written by Garry Marr.

One of Canada’s leading real estate companies says the rising housing market may not appear to make much sense.

But appearances are deceiving and Re/Max says sales and aver-age prices will continue to climb in 2012 – and that Vancouver’s average house price will break through $800,000.

“Canadian residential real estate defied conventional logic and out-performed expectations in 2011,” the company said in its year-end report on the market.

Re/Max expects 2011 to finish with prices up seven per cent and the average home across the country selling for $363,000. The market won’t be as robust in 2012 but consumers can still expect another two per cent jump in prices, it added.

Sales for 2011 are forecast to climb by three per cent from a year earlier with 460,000 homes sold by year end. For 2012, expect less than a one per cent increase in activity with only an addition-al 4,500 sales.

“The Canadian housing market has demonstrated tremendous resilience in recent years but 2011 stands out,” Re/Max spokesman Michael Polzler said. “Residential real estate markets actually experienced an upswing in the volatile third and fourth quarter.”

For Greater Vancouver, the aver-age house price in 2011 will have climbed 16 per cent from 2010 to almost $790,000, Re/Max said.

Sales this year should rise to 32,700 units, up from 31,144 reported last year.

“Given strong underlying fundamentals, the Greater Vancouver residential real estate market is expected to bounce back in 2012,” Re/Max said.

“Sales are forecast to hold relatively steady at 33,000, while [the] average price is projected to climb a further four per cent to $820,000.”

Re/Max looked at 26 markets across the country and predicts 23 will show an increase in aver-age price for this year. Sales were up in 22 of those 26 markets. The company says 81 per cent of markets studied will see price increases in 2012.

Among the reasons cited for the Canadian housing market’s continued strength against the odds has been population growth which has gone up by 11 per cent since 2000.

“Population growth and immigration are major factors expected to prop-up housing demand and household formation in the coming years,” says the company.

Condominiums are expected to continue to garner a growing share of the housing market with investment and income-producing properties in high demand. Low vacancy rates are said to have driven those markets in 2011 and those conditions are expected to continue.

Link