Archive for ◊ October, 2009 ◊
Canadian real estate correction was side-effect of recession, not cause, while U.S. market still faces challenges, report says more…
Canadian housing sales set fresh records in the third quarter, but a dearth of new listings threatens to push prices substantially higher and price many buyers out of the market.
“Listings have really gone down,” said Wayne Hartley, a realtor at Sudbury Achievers Realty Inc. “At the higher end of the market things have really tailed off, you just can’t find anything for sale. So if they list, they go fast for pretty good prices.”
The Canadian Real Estate Association said Thursday 135,182 homes were sold from July to September, an increase of 18 per cent from last year and the most ever sold in the third quarter. Average prices gained 11 per cent to $327,736.
“It is perhaps not a surprise that with demand up and supply down, the differential has resulted in a price squeeze,” said Eric Lascelles, chief economics and rates strategist at TD Securities. “The new level of prices is a record high, meaning that all of the earlier declines have been fully unwound.”
While sales were up, new listings took a 17 per cent fall from the same time last year on a national basis. Homes have become particularly hard to find in Saskatchewan, with new listings down 37.5 per cent in Saskatoon and 28.3 per cent in Regina.
“We’ve seen a shift toward a sellers market, that’s for sure,” said Sinda Shaw, a realtor at Sutton Group Norland Realty in Saskatoon. “So for people who were able to hold off on selling in a down market, things look good. For those who want to buy now, maybe the cycle is shifting and it’s a little less favourable for them.”
The lack of listings has created a sellers market, with homes being sold as quickly as they are listed in most markets across the country. That could change, however, as more sellers are drawn in by the allure of higher prices.
“Headline average price increases over the rest of the year are expected to prompt sellers to return to the market after having retreated to the sidelines late last year and earlier this year,” said CREA economist Gregory Klump.
On a seasonally adjusted basis, a method which tries to smooth out the data and take things such as seasons and one-time events into account, 127,941 homes were sold in the third quarter – an increase of 12 per cent for the previous quarter. The total value of sales also set a record in the third quarter, at $42.1-billion – an increase of 20 per cent from the third quarter last year.
“Momentum for sales activity remained strong throughout the third quarter,” said Dale Ripplinger, the association’s president. “Low interest rates, rebounding consumer confidence and an improving overall sense of economic security continue to draw home buyers to the housing market.”
Meanwhile, sales continued to increase on a monthly basis in September, 1.5 per cent higher than in August at 42,958. The increase pulls the seasonally adjusted activity 63 per cent higher than the low hit in January.
The busiest markets year-over-year were Toronto and Vancouver, according to the real estate association, with the number of units changing hands up 28 per cent and 124 per cent respectively.
“The national average price continues to be skewed upward by a sustained increase in sales activity, including a sharp rebound in activity at the higher end of the price spectrum, in some of Canada’s priciest markets,” Mr. Ripplinger said.
Newfoundland and Labrador led the year-over-year price gainers, with prices increasing 14.5 per cent from last September. Greater Vancouver saw prices increase 14 per cent. Not all markets have fared that well. Halifax has seen the steepest drop with average prices fall 6.2 per cent, with Sudbury close behind with a decrease of 5.1 per cent.
“There is no denying that the Canadian housing market is revving up, and extremely low mortgage rates, attractive home prices, and pent-up demand have combined to supercharge the sector,” Mr. Lascelles said.
“However, we feel obliged to note that not all aspects of the housing market are showing such strength. Recent strength has been more regional than nationwide, housing starts are still low, and new home prices are still generally declining.”
Published on Thursday, Oct. 15, 2009 9:36AM EDT Last updated on Thursday, Oct. 15, 2009 11:57AM EDT
While a home is likely the most important investment a person will make, the right time to buy a home is when you can afford it and find something suitable that you would be happy to live in regardless of whether it appreciated or not. Trying to second guess the market when you want/need a home is for the most part futile; the time lines are too long and markets totally uncertain. The main of the decision should be what you like and can afford at the time you are ready to be a home owner.
REBGV September Stats
Buyer demand remains strong while home listings increase
Greater Vancouver home sales remained strong last month, with the second highest number of residential sales ever recorded for the month of September.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver totalled 3,559 in September 2009, an increase of 3.4 per cent from the 3,441 sales recorded in August 2009, and an increase of 124.5 per cent compared to September 2008 when 1,585 sales were recorded.
“As homes sales in Greater Vancouver continued at an elevated pace in September it’s encouraging to see that more homes were listed on the MLS® in the month than any other so far this year,” Scott Russell, REBGV president said.
New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,764 in September 2009. This represents a 6.2 per cent decline compared to September 2008 when 6,142 new units were listed, but a 26.8 per cent increase compared to August 2009 when 4,544 properties were listed on the Multiple Listing Service® (MLS®) in Greater Vancouver.
At 12,596, the total number of property listings on the MLS® increased 5.5 per cent in September compared to last month and declined 36 per cent from the 19,852 homes listed for sale during the buyer’s market that was experienced at this time last year.
“During this period of renewed demand in our marketplace, home values have gradually recovered from the declines that occurred in 2008,” said Russell.
Since the beginning of the year, the MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver has increased 13 per cent to $547,092 from $484,211, while home prices compared to Septembers 2008 levels are up 1.6 per cent.
Sales of detached properties increased 160.6 per cent to 1,423 from the 546 detached sales recorded during the same period in 2008. The benchmark price, as calculated by the MLSLink Housing Price Index®, for detached properties increased 2.1 per cent from September 2008 to $741,632.
Sales of apartment properties in September 2009 increased 94.9 per cent to 1,489, compared to 764 sales in September 2008. The benchmark price of an apartment property increased 1.5 per cent from September 2008 to $374,686.
Attached property sales in September 2009 are up 135.3 per cent to 647, compared with the 275 sales in September 2008. The benchmark price of an attached unit increased 0.4 per cent between Septembers 2008 and 2009 to $466,276.
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The Real Estate industry is a key economic driver in British Columbia. In 2008, 24,626 homes changed hands in the Board’s area generating $1.03 billion in spin-offs. The Real Estate Board of Greater Vancouver is an association representing more than 9,400 REALTORS®. The Real Estate Board provides a variety of membership services, including the Multiple Listing Service®. For more information on real estate, statistics, and buying or selling a home, contact a local REALTOR® or visit www.rebgv.org.
Record-low interest prices, homebuyer tax incentives and lower housing prices are spurring a revitalized demand, a Scotia Economics report released Thursday says, but there are still obstacles to a more solid recovery. more…