Category: National Real Estate News

This article appeared on the CBC on June 18th, 2012.

Lower prices are powering a large increase in cottage sales across the country, one of Canada’s largest real estate companies said in a report Monday.

Re/Max said sales of recreational properties such as cottages are higher in 70 per cent of 33 markets the agency tracks.

Forty-nine per cent of markets showing “downward trending” in prices, and 33 per cent showing no change. Only 19 per cent of markets that Re/Max tracks showed higher prices this year compared to last.

“Affordability has provided some serious stimulus,” Re/Max Atlantic region vice-president Michael Polzler said.

Activity is especially strong on the low end of the market, the report said, with many markets showing inventory shortages for properties priced at $400,000 and under.

“While buyers are still cautious, they’re motivated,” Re/Max’s Western Canadian vice-president Elton Ash said. “Current market conditions have placed them firmly in the driver’s seat.”

The mild winter weather brought purchasers out earlier in the year in many parts of the country, Re/Max said.

The recreational property market is also witnessing a demographic shift. Sales among baby boomers are much weaker compared to previous years, in part because lower prices for vacation homes in the southern U.S. are enticing some older Canadians to become snowbirds.

But younger families and first-time buyers have stepped in to fill the void in most markets, Re/Max’s report says.

The company singled out several markets as being “value markets” at the moment. They include:

Atlantic Canada, the Laurentians and Eastern Townships in Quebec,
More than half of Ontario — including the iconic Muskoka area
Lake Winnipeg, Canmore, Harrison Lake and Comox Valley/Mt. Washington in Western Canada.

“Opportunity does exist,” Ash said. “Canadians love a good deal, and there’s no question that there are still some to be had in recreational property markets across the country.”

TORONTO (Reuters) – Canadian housing starts slowed as expected in May after a red-hot April, retreating to the average of the last six months, Canada Mortgage and Housing Corp said on Friday.

The seasonally adjusted annualized rate of housing starts was 211,400 units, compared with 243,800 units in April. The April figure was revised down from 244,900 units reported previously.

The number of starts in May was just below the forecasts of analysts in a Reuters poll, who had expected 212,000 starts.

“As anticipated, the pace of housing starts observed in April was not sustained in May. In fact, the pace in May was more in line with the average over the last six months,” said Mathieu Laberge, deputy chief economist at CMHC.

“Although some ups and downs are likely to continue in the months ahead, the pace of housing starts should trend lower as the year progresses,” Laberge said in a statement.

The slowdown was led by a decline in multiple family urban starts, which fell 20.7 percent to 125,300 units, while urban single starts decreased 4.2 percent to 64,300 units.

The seasonally adjusted annual rate of urban starts decreased by 15.8 percent to 189,600 units in May.

Canada’s hot housing market has sparked fears of a bubble, particularly in Toronto, Canada’s largest city, where low interest rates have driven a condominium building boom and double-digit annual price increases in existing home sales.

May’s seasonally adjusted annual rate of urban starts decreased by 35.8 percent in Québec, by 18.3 percent in Ontario, and by 7.7 percent in the Prairies. Urban starts increased by 6.4 percent in Atlantic Canada and by 20.9 percent in British Columbia. In each region, the decrease or increase was mainly due to changes in multiple starts.

(Reporting By Andrea Hopkins; Editing by Chizu Nomiyama)

This article appeared in the Globe and Mail on April 12th, 2012 and was written by Steve Ladurantaye.

Canada’s finance minister sees signs of cooling in Canada’s housing market, and that’s fine by him.

Economists and market watchers have been arguing for two years about whether the Canadian housing market, which has been among the hottest in the world coming out of the recession. But spring data shows sales in most centres have slowed considerably from the same time last year, and price gains appear to be moderating.

“I’m actually encouraged that the market itself is showing some correction,” Finance Minister Jim Flaherty said while visiting Alberta Thursday. “We’re not seeing so much of that in Toronto, but in Vancouver, yes. And overall we’ve seen some moderations, some softening in the residential market and I think that is a good thing.”

There was some speculation that the federal government would step in to further cool the market with its budget, but it resisted calls to make it more difficult for Canadians to qualify for mortgages.

It wouldn’t have been the first time – Mr. Flaherty previously intervened by ending 35-year amortizations on mortgages and forcing Canadians who choose variable mortgages to qualify using a higher interest rate than they’d actually be paying.

Record low interest rates have made it less expensive for Canadians to borrow a lot of money, which has led some to worry that they won’t be able to afford their homes when interest rates move higher in response to an improving economy.

Mr. Flaherty has opted to issue warnings to Canadians rather than enact new policy, mirroring the approach taken by the Bank of Canada. In January, he said “we have been cautioning Canadians for some time that they need to be prepared to have higher interest rates in the future and be aware of the affordability issue that that may create for some Canadians, not to assume that mortgage interest rates will remain low for a long period of time. So we all have to be cautious in our financial planning.”

Canadians will have a better idea of how homes have been selling when the Canadian real estate association releases its data for March early next week.

This article appeared on the CBC News website on March 22nd, 2012.

Major Canadian housing markets have continued to show “exceptional resiliency” so far this year, setting the stage for a busy spring, according to a major Canadian real estate organization.

In its market trends reports, Re/Max said its survey has found that 12 of 15 Canadian centres, or 80 per cent, reported sales activity in January and February that was ahead of last year’s levels.

More than half of the cities reported double-digit increases, “with the strong demand and diminished supply setting the stage for a heated spring 2012.”

Re/Max said low interest rates, coupled with strong consumer confidence levels and a mild winter played a significant role in the upswing, ushering in an early start to the spring market.

Average prices climbed in 14 of 15 markets, although price appreciation was more tempered, with only three markets — Toronto, Winnipeg and St. John’s, N.L. — posting gains in excess of 10 per cent.

However, tighter inventory levels at entry-level prices have sparked bidding wars — particularly in the Winnipeg and the Greater Toronto Area — with similar conditions starting to emerge in Saskatoon, Regina, London-St. Thomas, Hamilton-Burlington, Ottawa, St. John’s and Halifax-Dartmouth.

“Given the current economic climate, the strength of the country’s housing market clearly reflects the value Canadians place on home ownership,” said Michael Polzler, executive vice-president of Re/Max.

In terms of sales volumes, the best performing markets heading into the traditionally busy spring period were Halifax-Dartmouth, up 35 per cent, Saskatoon (21 per cent), Saint John, N.B., (20 per cent), Regina (16 per cent), St. John’s (12.5 per cent), Greater Toronto Area (12 per cent) London-St. Thomas (11 per cent) and Edmonton (11 per cent).

Only Vancouver, Kitchener-Waterloo, and Winnipeg have experienced softening in housing activity so far this year. Sales are down 16 per cent in the Greater Vancouver, 4.5 per cent in Kitchener-Waterloo, and Winnipeg down 0.2 per cent.

Meanwhile, despite expectations of continuing strong sales, price gains are likely to be “much more moderate that in years past,” said Elton Ash, regional -vice-president for Re/Max in Western Canada.

“We expect this will remain the trend moving forward, in line with the Canadian economy, as GDP growth also moves ahead at a more subdued pace.”

However, Ash said local conditions vary, with inventory shortages driving prices in some markets while others, such as in the case of Saskatchewan and Newfoundland, the local economy has shown extraordinary strength.

“On the whole, this is a very stable and healthy housing market in line with traditional norms, with few exceptions,” he said.

Re/Max said first-time buyers have been driving demand in both the smaller and major markets, in turn sparking strong sales activity among move-up purchasers at higher prices.

“As a result, the upper-end of the market has also held up well. There’s no question that the spring 2012 market will see all segments working in tandem.”