Canadian Funding Corp Reviews CMHC Affordable Housing Reports

Kelowna, BC. (July 13, 2009) – Pent-up demand for residential housing has bolstered sales in Canada’s major markets—a clear signal that the housing sector has shifted into recovery mode, says RE/MAX.

More balanced market conditions have emerged, effectively ending the stronghold that buyers had on the market over the past six to eight months.  Canada’s largest markets, Toronto and Vancouver, led the charge—with June sales among the highest in history for both local real estate boards.  Close to 11,000 properties changed hands in Toronto, up 27 per cent over one year ago, setting a new record for sales in the month of June.  The figure was just slightly off the all-time peak of 11,146 units.   Residential sales in Greater Vancouver increased 75.6 per cent over one year ago, to 4,259 units, just short of the record breaking 4,333 sales, which occurred in June 2005.  Overall, major markets began to recover in March, posting escalating sales in April, May and June.  The impetus is expected to continue throughout the remainder of 2009, with most centres now forecasting year-end sales on par or ahead of 2008 levels.

“While sales are the leading indicator, there are other clear signals that recovery is indeed underway,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada.  “Renewed consumer confidence, albeit cautious, has been key, supported by improved economic news.  In addition, we’ve seen sale price-to-list price ratios climb across the country, rising as high as 105 per cent in some communities.  Vendor incentives have also come off the table, both for resale and new housing stock.”

The recent surge in resale activity can be attributed to three key factors—pent-up demand, low interest rates, and greater affordability.  The combination—in conjunction with declining inventory levels—has created heated market conditions in hot pocket neighbourhoods, prompting a resurgence in multiple offers in June.  Average prices are holding steady or climbing, days on market are down, and inventory levels continue to tighten, especially at entry-level price points.

“The strength of the market, amid the most significant global recession in recent history once again underscores its relevance to the nation’s economic engine,” says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada.  “Canadians believe in homeownership –a fact best illustrated by the purchasers who ventured forward in recent months and snapped up some of the best real estate deals this market has seen in years.  Those who chose to sit it out on the sidelines are now facing a market in transition, characterized by the threat of rising interest rates, low inventory levels, and upward pressure on housing values.”

Although the current pace may be unsustainable, all markers point to greater stability in the market, leading to healthier activity in the long run, with inventory levels a key variable influencing pent-up demand.

http://www.calgaryrealestate-goodrealtor.com/calgary/recovery-underway-in-key-canadian-markets-ends

reviewed by Moishe Alexander,   CFC  canadian funding corp CEO

Slap Upside the Head

A cod fish in the face might be more subtle!

For Ever and Ever

Robert Hogue of the Royal Bank of Canada in his latest report “Housing Trends and Affodability”, should be a heads up to those house buyers who think Vancouver real estate market in its present form, will go on forever.

Between the Scales

While telling us that which we already know, that “housing affordabiltiy greatly improved in the Q1-09 the teeth of his report lie buried between the scales.

Good News Old News

Sure we have experienced a windfall in affordability, in fact according to Hogue “in most areas of the country we have returned to or are near to long term averages” that he claims are “consistent with solid market fundamentals.”

Fish Story

This is all good news except that – though “the market ‘appears’ to be generally on the mend in Canada, the road to full recovery still has obstacles”. Locally, we’re all happy about the Vancouver real estate market being abuzz. However, it’s those silly little global crisis reminders that haunt us.

For those who have taken advantage of low interest rates and have netted a Vancouver home, congratulations!

Cod Filets

Hogue slaps us with the notion that affordability based on cheap rates is behind us. Noted, is that we got a few scales thrown at us as a warning in the early part of June when the 5 – 10 year rates increased.

Hogue’s fish filet tells us that “Further improvement depends on greater gains in family income.” Which he claims “SHOULD (emphasis mine), be supported by an improving economy in the second half of the year.”

Ok this is all good and hopeful – but here’s the jig.

Vinegar on your Fish and Chips

At the current G8 conference British prime minister Gordon Brown served up a well battered filet with dire warnings that as the title of the Globe and Mail article screams, a “Second wave of economic crisis coming.” Brown is not talking about fish and chips wrapped in news print.

Where are the Jobs

Quoting Brown, “I would say that in April we were having to deal with the problems that were caused by the failure of banks. Now we have to deal with the challenge of resuming growth in the world economy.” He adds that “we must do something to help the million[s of] unemployed across the world.”

Forgetful

What might that be? Brown’s solution – government regulation. It’s that stuff we had before that was designed to protect us from this mess and that conveniently everybody forgot about.

No Guarantees

If you’ve been around a while you know that everything governments do takes a long time – certainly longer than six months as hopeful Hogue suggests. Left we are, confused in finding balance with the idea that all is not as rosy as Hogue might have us believe. Concerned we are for Vancouver’s mountains and oceans those natural barriers that isolate us from the world, may not be as protective as hoped.

Faith

Look around. How many of your friends have lost their job? What are their prospects of replacing the former high pay scale career with another. On balance, if housing affordability as Hogue implies, is going to be a reflection of an improved economy, who are we to believe in light of Prime Minister Brown’s warning?

Out in the stormy cold Atlantic ocean, a Newfoundland cod fisherman worth his salt would tell you that – Yah gotta have faith!

http://www.yattermatters.com/real-estate/vancouvers-fish-story/

reviewed by Moishe Alexander, canadian funding corp CEO

Real estate firm Royal LePage forecast in its latest survey that the 2009 national average house price will be down by 2 percent at C$297500 ($256466) by …

Steve Arnold

The Hamilton Spectator

(Jul 8, 2009)A new report shows house prices rising across Hamilton in the second quarter of this year.

The study by real estate giant Royal LePage shows rising prices across the city’s neighbourhoods — with only a tiny drop in one area. Hamilton’s central area led the increases with a rise in values of almost 36 per cent.

Joe Ferrante, broker of record at Royal LePage State Realty, attributed the bounce in prices to buyers finally deciding to take advantage of low-interest-rate mortgages.

“People are recognizing that there are great values out there,” he said. “I still read the papers and read about deficits and layoffs so I’m not sure we can call what happened in June a recovery, but it’s still nice to see.”

Royal LePage president Phil Soper said several forces are helping the real estate market recover — the business usually picks up in the second quarter of the year and the 2009 figures are being compared to an especially bad 2008.

“We saw a very sharp drop in prices through the winter, but the recovery was equally impressive starting in March,” he said.

The study measures changes in the price of both a standard two- storey house and a detached bungalow in Hamilton’s Mountain, East, West and Centre areas. Changes are shown for the April-June quarter over the January-March first quarter and over the same quarter last year.

It shows the average price of a detached bungalow on the Mountain was $212,191 during the April-June period, up 2.3 per cent from the same quarter last year. During the first quarter of this year, the same class sold for an average $209,006.

A west end bungalow averaged $245,900 during the second quarter, up 4 per cent from the same period last year. In the first quarter, that property type sold for $229,706. In the east end, a bungalow averaged $167,885, up 0.5 per cent from last year and also rising sharply from $155,560 in the first quarter.

The centre of Hamilton was the big winner, showing an average price of $153,932 during the second quarter, soaring almost 36 per cent from both last year and the $113,150 average reported in the first quarter.

Soper said spikes like that usually result from contractors bidding up the price of the land under houses they want to demolish and replace, or consumers bidding for houses they plan to extensively renovate.

The story for standard two-storey houses across the four regions is largely the same — a house in that class on the Mountain averaged $304,484 during the second quarter, down 0.1 per cent from the same period last year. This segment was up sharply from the $277,525 average reported in the first quarter.

Standard houses in the west end averaged $279,141 during the second quarter, up 4 per cent from the same period last year, also rising from $229,706 in the first quarter of this year. In the centre area, the standard house averaged $154,896. That’s up 9.2 per cent from the same quarter last year and also up from the $135,743 average reported in the first three months of this year.

In the east end, this class averaged $260,711, a 7.2 per cent increase from the same period last year and also up from the $227,111 average in the first quarter.

http://www.beginnerrealestatewealth.com/6723/corrected-royal-lepage-sees-stable-canada-home-prices-sales-reuters/

reviewed by Moishe Alexander, CFC CEO