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

By Don Lawby – President, CENTURY 21 Canada

During these first days of summer, as economists are telling us that the worst of the recession may be over, Canadians are wondering how the values of their largest financial assets – their homes – are holding up.

Media reports of real estate statistics have left many Canadian homeowners rightfully confused. The problem is that these statistics are usually based on averages of city, provincial and national markets. Such averages are pretty much irrelevant to what’s really happening in specific neighbourhoods.

Our analysis suggests that Canadian homeowners should avoid relying on city, provincial or national averages to value their homes. Instead, sellers should monitor selling prices of similar homes in their own neighbourhoods. Buyers should monitor selling prices of typical homes in the neighbourhoods where they want to live.

A cautionary tale

A number of authoritative real estate organizations issue monthly home price surveys from which price averages are extracted and extensively reported in the media. Often these organizations caution that average prices do not reflect actual prices in neighbourhoods with specific geographies and housing types, but these cautions are largely overlooked.

Here are examples that illustrate some limitations of averages.

The Toronto Real Estate Board reports that the average home price in May 2009 was $395,609 for all transactions (single and detached homes, condo apartments and condo townhouses) in the Greater Toronto Area (GTA). The GTA is the country’s most populous urban concentration bounded by Lake Ontario on the south, Lake Simcoe on the north, Burlington on the west, and Newcastle on the east.

This average price has little relevance to prices in the specific neighbourhoods and communities in the GTA, where prices for single detached homes ranged from $1.53 million in the Toronto neighbourhood between St. Clair Avenue and Bloor Street east of Bayview Avenue; to $709,000 in a rural neighbourhood east of Newmarket; to $255,000 in Oshawa.

Average home prices

Averages themselves are largely misleading.

Suppose that in Year 1 five homes sold for $200,000, $220,000, $260,000, $290,000 and $500,000 (average $294,000), but in Year 2 only the first four homes sold (average $242,000). Statistically, this would mean that the average price of homes sold in this neighbourhood in Year 2 fell by $52,000, or 18%, from Year 1, even though all houses that were actually sold fetched identical prices to the previous year. Homeowners in this neighbourhood who didn’t carefully analyze the data would think their home values had fallen dramatically over the year, when, in fact, values of typical homes in the neighbourhood were stable.

Getting an accurate value of your home

So, the question remains: How does a Canadian homeowner determine the value of his or her existing home? Or how does a buyer determine the value of a prospective purchase?

The fact is, the Canadian housing market is made up of thousands of local housing markets that are affected by national, regional and local issues.

Local issues are many and varied. Prices of homes vary with proximity to rapid transit, shopping, parks and schools. Mountain or lakeside vistas are preferred over powerline panoramas or flight paths. Prices of homes in neighbourhoods a stone’s throw apart will vary with age, size and type of home. Homes at the base of a hill are more affordable than view homes at the top.

The most relevant housing market is the one that is closest to where you live today or want to live tomorrow. Neighbourhood surveys are more useful than city surveys, city surveys better than provincial and so on.

Most relevant are surveys of recent selling prices of similar homes on the same street or in the same neighbourhoods.

That said, it is difficult for homeowners to do their own surveys because listing prices – not selling prices – are available to the general public on the local MLS. The best course is to ask a realtor of your choice to show you statistics of selling prices of homes similar to yours in your neighbourhood. You will incur no obligation and, depending on your evaluation of the statistics you are shown, you will have a head start on your search for a realtor should you decide to sell your home.

Summary

The objective of this White Paper is to help homeowners understand the relationship between widely-reported real estate statistics and the value of their homes. We recommend that homeowners carefully scrutinize home price surveys from a variety of real estate organizations and economists. We hope this White Paper helps homeowners extract information from those surveys that is most relevant to them.

http://www.jeffreyteam.com/blog/toronto-real-estate-market/real-estate-statistics-101/

reviewed by Moishe Alexander, CFC CEO

Canada Mortgage and Housing Corporation (CMHC) launched its new National Seniors’ Housing Survey today. The survey, conducted in all provinces, collected information on vacancy rates and rents in seniors’ residences with services not offered in traditional rental structures.

“Vacancy rates and rent levels in the seniors’ housing market reflect a different market makeup than the traditional rental market,” said Bob Dugan, Chief Economist for CMHC. “The demand for seniors’ housing is expected to increase as the baby boom generation ages. The anticipation of this eventual increase in demand, has spurred the construction of seniors’ units ahead of actual demand. This, in turn, has led to an average vacancy rate of 9.2 percent in seniors’ residences that tends to be higher than in the traditional rental market.”

The national vacancy rate applies to standard spaces, which are defined as:

* private units such as a bachelor, one-bedroom or two-bedroom apartment occupied by a single individual or a couple; one unit is considered as one standard space;
* semi-private units; one unit is considered as two standard spaces;
* ward units; one unit is considered as three standard spaces or more;

The vacancy rate is calculated for all standard spaces regardless of whether the occupant participates in a meal plan or requires medical services. The vacancy rate covers only spaces that accommodate residents who receive less than 1.5 hours of care per day.

Vacancy rates varied considerably across the country, from a low of 3.4 per cent in Saskatchewan to a high of 18.9 per cent in Newfoundland and Labrador. The vacancy rate in Ontario (13.3 per cent) was above the national figure, while the rates in British Columbia (7.5 per cent) and Quebec (7.9 per cent) were below average.

Average monthly rents in the seniors’ market are higher than traditional market rents, reflecting the additional services and amenities that residents of these structures receive. The average rent for bachelor/private units where meals are included was $1,774 per month. Average rents ranged from a high of $2,519 per month in Ontario to a low of $1,271 in Quebec. Differences in average rents reflect, in part, the varying prevalence of services and amenities in each province.

As Canada’s national housing agency, Canada Mortgage and Housing Corporation (CMHC) draws on more than 60 years of experience to help Canadians access a variety of quality, environmentally sustainable, and affordable homes — homes that will continue to create vibrant and healthy communities and cities across the country.

Information on this release:

Andrea Scott
CMHC
Media Relations
Tel.: 613-748-4075
ascott@cmhc-schl.gc.ca

Backgrounder

* CMHC conducted its first National Seniors’ Housing Survey in February and March 2009. Previously, CMHC had regional seniors’ reports in B.C., Ontario and Quebec, which were published annually.
* The new national survey was conducted in all 10 provinces and in all centres regardless of size, which had a residence meeting the eligibility criteria.
* The survey targeted private and non-profit residences where the majority of residents were 65 years of age or older and had access to additional services not offered in traditional rental structures. To be eligible for the survey, a residence must provide an on-site meal plan or on-site medical services. Virtually all residences surveyed provided an on-site meal plan. Other amenities and services that were popular in some of the residences included on-site medical services (57.8 per cent), transportation services (44.2 per cent) and 24 hour call-bell service (92.0 per cent). Note that the survey excluded nursing homes and long-term care facilities.
* Across Canada, some 43 per cent of standard spaces in the seniors’ housing market rented for less than $1,500 and 22.0 per cent of spaces rented for $2,500 or more per month.
* Some 176,845 seniors lived in the 2,464 residences surveyed, capturing 8.2 per cent of the Canadian population at, or above, the age of 75.

http://www.cmhc.ca/en/corp/nero/nere/2009/2009-06-22-0815.cfm

reviewed by Moishe Alexander, CFC CEO