“It’s a great time to buy a home,” Martin Nel, a senior BMO official, said in news release announcing the change. He added that people who take advantage of the offer will benefit.

“If ever there was a time to buy, it is now,” Mr. Nel said.

John Greenwood, Financial Post · Thursday, Sept. 2, 2010

The move, which takes effect today, brings the bank’s key five-year rate to 3.59%, down from 3.79%, making it one of the lowest five-year rates ever offered by a Canadian bank, says industry newsletter Canadian Mortgage Trends.

But some experts are already scratching their heads because of the aggressive tone of the announcement as well as the timing, given the recent spate of warnings about the uncertain state of the market, including one earlier this week from the Canadian Centre for Policy alternatives predicting an imminent collapse.

When the big banks make mortgage rate changes, they generally just disclose the new numbers without commenting on housing market conditions. If pressed, bank officials are usually quick to explain that the changes in these consumer lending rates are merely a function of fluctuations in their own borrowing costs.

“It’s a bit puzzling to me,” John Andrew, a professor at Queen’s University’s School of Urban and Regional Planning, said of the BMO announcement. “Perhaps they are concerned that the number of new customers will fall off precipitously.”

Residential real estate prices have been in free-fall in the United States as well as many European countries, in contrast to the Canadian market, which has been on a tear for a good part of the past decade with prices in many cities at record levels.

But analysts worry that it’s only a matter of time before the Canadian housing market moves in the same direction, and they point to warning signs that have already appeared.

Earlier this year, Moody’s reported that debt-to-income levels of Canadian households are the highest ever and close to where they were in the United States before that market started to fall apart in 2007.

The Bank of Canada has raised concerns that the high debt loads of Canadian consumers have made them vulnerable to changes in interest rates and potential deterioration of the economy.

In a bid to crack down on what some described as reckless real-estate speculation, the federal government brought in new regulations in the spring to make it harder for first-time buyers to qualify for government-backed mortgage insurance.

Borrowers must now meet standards for a five-year fixed-rate mortgage, even if they want a shorter-term, variable-rate product. As the key measuring stick for many homebuyers, a lower five-year mortgage rate will mean that more people will qualify to buy more expensive homes than with a higher mortgage rate.

The tougher rules had the desired effect. The recent imposition of the new harmonized sales tax in Ontario and British Columbia also affected demand, and as a result the market cooled so much that industry insiders became worried it had gone too far.

The Canadian housing market is important to the banks because residential mortgages make up the single biggest asset class on their balance sheets.

There are nearly $1-trillion of home loans outstanding, to the Bank of Canada says. About half of these loans are held by the chartered banks.

Read more: http://www.nationalpost.com/todays-paper/ever+there+time+says/3471835/story.html#ixzz0yO4zLyqn

The number of properties listed for sale in Greater Vancouver continued to rise in May, while the number of sales showed a year-over-year decrease.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver totalled 3,156 in May 2010, a decline of 10.4 per cent compared to the 3,524 sales in May 2009; 5.1 per cent more than the 3,002 sales in May 2008; and 27.1 per cent less than the 4,331 sales in May 2007. May 2010 sales also represent a 10.1 per cent decline compared to last month’s sales.

In terms of number of property listings, last month marked the third consecutive month during which more than 7,000 homes were listed for sale on the Multiple Listing Service (MLS®) in Greater Vancouver.

New listings for detached, attached and apartment properties totalled 7,014 in May 2010, a 48.2 per cent increase compared to May 2009 when 4,733 new units were listed, and an 8.3 per cent decline compared to April 2010 when 7,648 properties were added to the MLS®.

At 17,492, the total number of property listings on the MLS® increased 10 per cent in May compared to last month, and is up 28.2 per cent compared to this time last year.

“Prospective home buyers in today’s market have a broad selection to choose from in every property type. REALTORS® are telling us they’re working with buyers who are not feeling as rushed to make a decision as they did late last year and earlier in the year,” Jake Moldowan, REBGV president said.

Over the last 12 months, the overall MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver increased 16.7 per cent to $590,662 from $506,201 in May 2009.

“It’s important for those looking to buy or sell a home to remember that real estate is local and wise real estate decisions are made by those who understand current market conditions at the neighbourhood level,” Moldowan said.

Sales of detached properties in May 2010 reached 1,256, a decrease of 10.4 per cent from the 1,402 detached sales recorded in May 2009 and a 4.4 per cent increase from the 1,203 units sold in May 2008. The benchmark price for detached properties increased 19.1 per cent from May 2009 to $810,175.

Sales of apartment properties reached 1,354 in May 2010, a decline of 7.1 per cent compared to the 1,458 sales in May 2009 and an increase of 8.8 per cent compared to the 1,244 sales in May 2008.The benchmark price of an apartment property increased 13.9 per cent from May 2009 to $398,783.

Attached property sales in May 2010 totalled 546, a decline of 17.8 per cent compared to the 664 sales in May 2009 and a 1.6 per cent decline from the 555 attached properties sold in May 2008. The benchmark price of an attached unit increased 14.8 per cent between May 2009 and 2010 to $500,339.

Download the complete stats package by clicking here.

Listen to REBGV president Jake Moldowan’s May 2010 Market Summary by clicking here.

For more information please contact:
Craig Munn, Assistant Manager of Communications
Real Estate Board of Greater Vancouver
Phone: (604) 730-3146
cmunn@rebgv.org

The Greater Vancouver housing market experienced increased activity in April thanks to a steady balance of home buyers and sellers entering the marketplace.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver totalled 3,512 in April 2010, the fifth highest-selling April on record. The figure represents an increase of 18.5 per cent compared to the 2,963 sales in April 2009; 9.1 per cent more than April 2008’s 3,218 sales; and 3.7 per cent more than April 2007’s 3,387 sales. April 2010 sales also represent a 12 per cent increase compared to last month.

“We’re in the midst of another strong spring season thanks to high levels of activity on both the buyer and seller side of our market,” Jake Moldowan, REBGV president said. “The number of homes coming on the market has increased significantly in recent months, which is providing a healthy level of choice for those looking to buy during this busy period.”

New listings for detached, attached and apartment properties in Greater Vancouver totalled 7,648 in April 2010, a 64.5 per cent increase compared to April 2009 when 4,649 new units were listed, and a 9.2 per cent increase compared to March 2010 when 7,004 properties were added to the Multiple Listing Service® (MLS®).

At 15,901, the total number of property listings on the MLS® increased 17 per cent in April compared to last month, and is up 11 per cent compared to this time last year.

Over the last 12 months, the MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver increased 18.9 per cent to $593,419 from $499,021 in April 2009.

“It was at this time last year when home prices in our region began their recovery from the declines that occurred during the recession period,” Moldowan said.

Sales of detached properties in April 2010 reached 1,370, an increase of 15.1 per cent from the 1,190 detached sales recorded in April 2009 and a six per cent increase from the 1,293 units sold in April 2008. The benchmark price for detached properties increased 21.2 per cent from April 2009 to $818,403.

Sales of apartment properties reached 1,526 in April 2010, an increase of 29.4 per cent compared to the 1,179 sales in April 2009 and an increase of 15.9 per cent compared to the 1,317 sales in April 2008.The benchmark price of an apartment property increased 16.9 per cent from April 2009 to $397,779.

Attached property sales in April 2010 totalled 616, an increase of 3.7 per cent compared to the 594 sales in April 2009 and a 1.3 per cent increase from the 608 attached properties sold in April 2008. The benchmark price of an attached unit increased 16.4 per cent between April 2009 and 2010 to $502,399.
Click here to download the complete stats package.

For more information please contact:
Craig Munn, Assistant Manager of Communications
Real Estate Board of Greater Vancouver
Phone: (604) 730-3146
cmunn@rebgv.org

With existing Canadian home sales surging 76 per cent, BMO takes a look at how to avoid the challenges that come with higher interest rates

The housing market in Canada has seen existing Canadian home sales surge 76 per cent from their January, 2009 lows. Not only that, in November, existing home prices spiked 19 per cent above year-ago levels, the second fastest clip in two decades. With record-low interest rates, more people than ever are looking to purchase a home. However, experts are predicting that interest rates will rise in 2010.

“We expect the Bank of Canada’s overnight rate target to climb from 0.25 per cent beginning in July 2010 to a more neutral 4.25 per cent in mid-2012. In turn, consumers can also expect mortgage rates to increase,” says Sal Guatieri, Senior Economist, BMO Capital Markets. “As long as borrowers keep in mind that renewal rates will likely be substantially higher, today’s ultra-low borrowing costs represent a unique opportunity to purchase a property.”

Top Tips to Consider
1) Make sure you can afford what you sign up for:
• Stress test your financial budget using a mortgage payment based on a higher interest rate
• For example, a customer looking to renew a $100,000 mortgage currently priced at 2.25 per cent could expect their monthly mortgage payment to increase by $100/month if rates were to increase by two per cent

2) Make pre-payments when you can:
• Pay weekly or biweekly instead of monthly
• Take advantage of the 20+20 pre-payment privileges.

3) Always make sure you save for a rainy day:
• If you are up to your maximum in debt, you may not be well prepared for a leaky roof along the way

4) Think carefully about fixed versus variable:
•While variable rate mortgages have been a winning strategy over the long-term, fixed rate mortgages come with the peace of mind from being insulated against rate increases and knowing how much of your mortgage you will have paid down at the end of your term

5) In today’s heated market, do not get locked into a bidding war that pushes your mortgage payments outside your comfort zone

“Think about not only what your financial needs are today, but a year from now, three years from now and five years from now so you can plan accordingly,” says Jane Yuen, Senior Manager, Mortgages, Bank of Montreal. “Always be on the lookout for ways to pay yourself first. You could be mortgage free faster and save tens of thousands of dollars in interest costs by simply changing your mortgage payment frequency from monthly to biweekly.”

Source: hometrader.ca

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver totalled 1,923 in January 2010, an increase of 152.4 per cent compared to January 2009 when 762 sales were recorded and a 23.5 per cent decline compared to the 2,515 sales recorded in December 2009.

In terms of historical perspective, January ranked as an average month for number of residential housing sales over the past decade, with higher sales in January 2002, 2003, 2004, and 2006.

Over the last 12 months, the MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver increased 17.2 per cent to $573,241 from $489,007 in January 2009. This price is 0.8 per cent above the previous high point in the market in May 2008 when the residential benchmark price sat at $568,411.

“Although home prices in the region have largely returned to their previous peaks, we still see a significant number of first-time and move-up buyers in the market, thanks to low interest rates and the diverse range of properties available today,” Jake Moldowan, REBGV president-elect said.

“There is also closer alignment between supply and demand in today’s housing market. At 18 per cent, the sales-to-active listings ratio in January is approximately 10 per cent lower than we’ve seen in our market over the last six months,” Moldowan said.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,147 in January 2010. This represents a 39.1 per cent increase compared to January 2009 when 3,700 new units were listed, and a 139.1 per cent increase compared to December 2009 when 2,153 properties were listed on the Multiple Listing Service® (MLS®) in Greater Vancouver.

At 10,218, the total number of property listings on the MLS® increased 14 per cent in January compared to last month and declined 26 per cent from this time last year.

“Looking ahead, it’s difficult to know exactly what the Olympic effect will be on our market in February, although I think it’s fair to say it should be a quieter period for home buyers and sellers and so, in fact, may be a good time for motivated buyers to search for properties,” Moldowan said.

In January, sales of detached properties increased 141.4 per cent to 705 from the 292 detached sales recorded during the same period in 2009. The benchmark price, as calculated by the MLSLink® Housing Price Index, for detached properties increased 19.5 per cent from January 2009 to $788,499.

Sales of apartment properties in January 2010 increased 146.8 per cent to 891 compared to 361 sales in January 2009. The benchmark price of an apartment property increased 15.2 per cent from January 2009 to $385,487.

Attached property sales in January 2010 are up 200 per cent to 327, compared with the 109 sales in January 2009. The benchmark price of an attached unit increased 13.4 per cent between January 2009 and 2010 to $482,478.

Source: REBGV Download the complete package.

记者：闻笛

地产界促省府减轻置业者压力

楼市向来在国民经济中占有举足轻重的地位。在某些国家或地区，楼市的发展对于拉动国民经济增长有着不可忽视的作用，譬如在中国，楼市甚至被列为国民经济发展的“支柱产业”。卑诗省的林木业一向被目为省内最重要的产业部门，水产业和旅游业的地位略次之。尽管尚无确切的官方数据显示，地产业在卑诗省内经济中所占到的具体比重如何，但是，可以肯定的一点是，衡量BC省的经济增长，楼市的发展绝不可能是一个无关紧要的指标。

在卑诗省，HST大致可以定义为一项“扬林农”而“抑楼市”的政策。地产界人士相信，统一销售税HST对于楼市的负面影响将是长期的，且处于地产业整个产业链上的各环节均将大受影响，包括买房、买房、地产经纪、建筑行业及建材行业；而其间受损失最大的是置业人士。因为明年7月一旦实行HST，届时，无论是买新屋或者旧屋，也无论是否首次置业，消费者都必须多付出数以万元计的税款。

地产界交涉初见成效

Sutton地产服务公司的地产经纪人Gary Gao 透露，自今年中省府宣布将于明年7月实行统一销售税（HST），卑诗省地产界一直努力与省府代表交涉，敦促省府尽快采取举措，减轻HST对民众置业的影响。这些措施包括扩大税务减免的范围；提高首次购屋财产转移税（PTT）的门槛；提高征收HST的门槛等。

眼下，省府回应将新屋HST退税额度由原定的42万元调高上限至52万元，可以说，地产界的吁请已获省府部分地接纳。根据这项调整政策，价格在52.5万元或以下的新屋，买家可获最高26,250元的HST退税（rebate），较原来的20,000万元退税限额，增加幅度超过31％。而屋价在52.5万元以上的新屋，则仍然按照今年7月宣布的计划，可以获得“定额”退税26,250元。

尽管财长韩仕新表示，调整之后，本省新屋买家的退税优惠是全国各省中最高的。但是，一直呼吁废除HST的卑诗新民主党则批评说，提高后的回款仍属太少，因为卑诗现时平均楼价已逾60万元。

HST影响整个地产生态链

Gary Gao解释说，实行HST，首先意味着新屋买主将要多付7%的税款，因为目前屋主只需交纳5%的联邦服务税。此外，引入新的HST之后，所有与地产交易有关的费用和税款都将上升，包括经济佣金、验屋费、估价费、测量证书费等等，也都将由5%增至12%。所有因素相加，这势必造成消费者另一项庞大的成本开支。

建筑商们担心，消费者可能会因为抵制HST而导致新屋销售疲软，从而引发建筑行业的解雇潮或增大建商破产的风险。

对于HST的负面影响，大温住宅建筑商协会（GVHBA）行政总裁辛普森（Peter Simpson）一言以蔽之：“HST对房屋的可负担性造成障碍”。

反对派期阻止HST通过

针对省府近期提高新屋退税上限的行为，部分消费者及建筑行业并不“买账”。消费者指HST退税优惠从原来40万元调升至52.5万元，退税额差别不过数千元，对明年7月1日以后卑诗的楼市影响不大。而加拿大住宅建筑商协会卑诗分会（Canadian Home Builders Association—BC）的发言人指出，省府应将退税门槛继续调高至60万的水平，该会将在未来两年继续搜集数据，以证明52.5万元上限并不够高。协会同时希望省府继续提高退税门槛，并向消费者提供类似联邦现时所提供的房屋翻新退税优惠政策。

卑诗省府目前仍须在省议会通过HST执行法案，而卑诗新民主党及民间反对HST团体均表明，将继续全力阻止该法案通过。

在缅省，11月17日该省政府已否决在该省实施HST的计划，因为在经济不景时期，让消费者税务负担增加4亿元，无异于“发出错误讯息”。

恐慌导致楼市“小阳春”？

早前，BC房地产协会（British Columbia Real Estate Association）首席经济师Cameron Muir曾预测，由于预期明年7月实施HST后会导致置业负担加重，部分潜在买家会有希望赶在新税制实施前买房，因此可能推动本地房产市场进入新一轮“小阳春”。

Gary Gao表示，此预期确已得到部分证实。今夏以来，省内地产交易确实非常活跃，不仅成交量大幅超过去年，房屋价格上扬，并且逐月上升。目前，尽管并无确切的统计数据，表明其间到底有多少人是受到HST政策的刺激而买房，然而，从实际情况来看，的确有相当一部分的消费者在知晓HST即将实行的消息后，马上联络经纪人，提前安排购屋计划。尤其在购买52.5加元以上新屋的消费群体中，这一趋势更为明显——因为此类房屋将来受HST新税制的影响最大。

“四海皆为冬，一室难独春”。身处全球经济的寒冬期，一场骤发的“小阳春”，到底能维持多久？楼市后市及加国经济当作如何观？业内人士并不乐观。Cameron Muir认为，HST对于本地楼市必将带来长期的负面影响，尤其超过52.5万元的中高价位物业交易。

（民众可访问http://www.bcrea.bc.ca/hst/speakout.htm，在线提交抗议信。目前已有超过1600封抗议信由此网站发出。）

（原载《枫华》杂志2009年12月刊）

Over the last 12 months, the MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver increased 12.4 per cent to $557,384 from $495,704 in November 2008. This price, however, remains down 1.9 per cent from the most recent high point in the market in May 2008 when the residential benchmark price sat at $568,411.

“This unseasonably high level of demand can be attributed in large part to low interest rates, but it also speaks to the diverse range of housing options available in Greater Vancouver,” Scott Russell, Real Estate Board of Greater Vancouver (REBGV) president said. “Prospective homebuyers today have more options at different price levels than ever before.”

The REBGV reports that residential property sales in November were the third highest volume ever recorded in Greater Vancouver for that month. Sales in the region totalled 3,083 in November 2009, an increase of 252.7 per cent compared to November 2008 when 874 sales were recorded and a 16.8 per cent decrease compared to the 3,704 sales recorded in October 2009.

“We are experiencing a brisker than normal market for this time of year, although we have begun to see a reduction in the number of homes listed for sale, which is normal as we head into the holiday season,” Russell said.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 3,653 in November 2009. This represents a 21.3 per cent increase compared to November 2008 when 3,012 new units were listed, and a 26.6 per cent decline compared to October 2009 when 4,977 properties were listed on the Multiple Listing Service® (MLS®) in Greater Vancouver.

At 11,039, the total number of property listings on the MLS® decreased 8.6 per cent in November compared to last month and declined 39 per cent from this time last year.

In contrast to this year, note that November 2008 was the lowest selling November in Greater Vancouver in 27 years.

Sales of detached properties increased 261.5 per cent to 1,164 from the 322 detached sales recorded during the same period in 2008. The benchmark price, as calculated by the MLSLink Housing Price Index®, for detached properties increased 13.6 per cent from November 2008 to $757,209.

Sales of apartment properties in November 2009 increased 240.5 per cent to 1,396 compared to 410 sales in November 2008. The benchmark price of an apartment property increased 11.6 per cent from November 2008 to $381,945.

Attached property sales in November 2009 are up 268.3 per cent to 523, compared with the 142 sales in November 2008. The benchmark price of an attached unit increased 10.2 per cent between Novembers 2008 and 2009 to $469,686.

Download the complete stats package by clicking here.

Listen to Scott Russell’s November 2009 Market Summary by clicking here.

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.

For more information please contact:
Craig Munn, Assistant Manager of Communications
Real Estate Board of Greater Vancouver
Phone: (604) 730-3146
cmunn@rebgv.org

Over the last 12 months, the MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver increased 6.8 per cent to $553,702 from $518,668 in October 2008.

“While home prices have been rising in 2009, they have not eclipsed the peaks reached in early 2008,” Scott Russell, Real Estate Board of Greater Vancouver (REBGV) president said. “We’re coming off several months of unseasonably high sales levels, which has allowed for a gradual increase in home values this year,”

The REBGV reports that residential property sales in Greater Vancouver totalled 3,704 in October 2009, an increase of 4.1 per cent from the 3,559 sales recorded in September 2009, and an increase of 171.6 per cent compared to October 2008 when 1,364 sales were recorded. Looking back two years, last month’s sales increased 22.3 per cent compared to October 2007 when 3,028 sales were recorded.

“High confidence and low mortgage rates are continuing to drive the activity we’re seeing in the housing market today,” Russell said.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 4,977 in October 2009. This represents a 2.3 per cent increase compared to October 2008 when 4,867 new units were listed, and a 13.4 per cent decline compared to September 2009 when 5,764 properties were listed on the Multiple Listing Service® (MLS®) in Greater Vancouver.

At 12,084, the total number of property listings on the MLS® decreased 4.1 per cent in October compared to last month and declined 37 per cent from this time last year.

Sales of detached properties increased 201.6 per cent to 1,487 from the 493 detached sales recorded during the same period in 2008. The benchmark price, as calculated by the MLSLink Housing Price Index®, for detached properties increased 7.7 per cent from October 2008 to $749,808.

Sales of apartment properties in October 2009 increased 148.4 per cent to 1,607, compared to 647sales in October 2008. The benchmark price of an apartment property increased 6.3 per cent from October 2008 to $380,975.

Attached property sales in October 2009 are up 172.3 per cent to 610, compared with the 224 sales in October 2008. The benchmark price of an attached unit increased 4.6 per cent between Octobers 2008 and 2009 to $468,798.

Download complete stats package.
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.
For more information please contact:

Craig Munn, Assistant Manager of Communications
Real Estate Board of Greater Vancouver
Phone: (604) 730-3146
cmunn@rebgv.org

Steve Ladurantaye

Globe and Mail Update Published on Monday, Oct. 19, 2009

While it’s tempting to think of a “housing correction” as a continent-wide phenomenon, National Bank Financial says the Canadian and U.S. markets couldn’t be more different.

“The two have absolutely nothing in common,” senior economist Marc Pinsonneault wrote in an economic update Monday. “In Canada, the correction got under way much later and lasted nowhere as long.”

Mr. Pinsonneault said “prudent lending practices” in Canada prevented the housing market from falling as hard as its American counterpart, and pointed out that Canada’s crisis was a side-effect of its recession rather than its cause.

Here are four ways the markets have differed:

Duration of slowdown

The Canadian market began to slide in Octobe,r 2008, while the American slump has lasted 2 1/2 years.

“People wishing to sell their homes either cut their asking price or quite simply took their property off the market,” he said of the Canadian market. “Lower interest rates, lower home prices and renewed consumer confidence led to a quick recovery in sales, so much so that as early as last May, these had surpassed pre-recession levels.

The American market still faces challenges – the number of sales has to increase 70 per cent “to return to levels in line with a normal situation.”

Price declines

According to Teranet, Canadian home prices fell 8.9 per cent from their August, 2008, highs to their recessionary lows eight months later. In the U.S., the S&P/Case Shiller index shows prices slid 33 per cent in 33 months.

“In Canada, in three of the six metropolitan areas covered … namely, Halifax, Montreal and Ottawa, the correction was rather ephemeral, lasting from three to six months,” he said. “In addition, it proved pretty light, with prices retreating less than 5 per cent. Moreover, since the market trough, prices in these three areas have already made up the ground lost during the correction.”

While prices in Vancouver and Calgary took harder hits, they still did better than the worst U.S. markets.

“Prices there fell in a measure comparable to that registered in the U.S. cities least affected, that is, Denver, Dallas and Charlotte,” he said. “The market began recovering only recently and, therefore, a return to pre-correction price levels is not imminent.

Delinquency rates

Canadian banks have seen delinquency rates climb to 0.4 per cent, compared to the 0.65 per cent high reached in 1992. The number is far greater in the U.S., at 3.67 per cent.

“Before the market’s collapse, the maximum ever observed had been a little more than 1 per cent back in early 1986,” he said.

Consumer spending

When home prices are under pressure, consumers tend to reel in the spending.

“According to Statistics Canada, from the end of Q3 2008 to mid-2009, the value of household real estate wealth sagged only 1.1 per cent,” he said. “The impact of this impoverishment on consumer spending has been negligible.”

In the U.S., the value of household real estate wealth dropped 18.2 per cent. The Federal Reserve estimates that for each dollar lost in housing wealth, consumer spending pulls back up to 15 cents.

“Based on these figures, the loss in household real estate wealth in the United States has brought about a contraction in consumer spending of 5.5%. The macroeconomic impact here is blatantly clear.”

“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.”

Steve Ladurantaye

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.