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

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

Canada’s resale housing market recovered lost ground in the second quarter and is poised to stabilize for the remainder of 2009, after a very slow start to the year, according to the Royal LePage Market Survey Forecast and House Price Survey released today.  As the economy begins to stabilize and consumer confidence improves, house prices are expected to appreciate slightly in much of eastern and central Canada.   Greater than national average price declines are predicted for the western cities that saw the greatest price inflation earlier in the decade, including Edmonton, Calgary and Vancouver.

“Given the grim shape that Canada’s real estate market was in this past winter, the turnaround we have witnessed in the second quarter is really quite remarkable.  We believe this improvement represents a sustainable change across the country. While seasonally weaker conditions are to be expected in the fall, the plucky Canadian real estate market is stabilizing and a healthy level of activity is forecast for the second half of 2009,” said Phil Soper, president and chief executive officer, Royal LePage Real Estate Services.

During the second quarter, average house prices across most Canadian markets began to appreciate, recovering from the lows experienced during the winter months. Average national prices remain slightly behind those posted during the same period in 2008. Of the housing types surveyed, the price of detached bungalows declined to $327,964 (-3.5 per cent), two storey property prices decreased to $392,378 (-3.7 per cent), and standard condominiums price points fell slightly to $237,112 (-3.8 per cent), year-over-year.

Soper observed, “With our industry’s busiest quarter behind us, we feel comfortable revising our 2009 forecast to the positive. When the anticipated market decline struck last winter, it was with greater speed and intensity than predicted, but the strength of the rebound was equally surprising.  If general economic conditions continue to improve, as we expect they will, 2009 will be characterized as a period of moderate housing market correction after several years of above-average price growth.”

The 2009 national average house price is forecast to decline marginally by 2.0 percent, to $297,500 by end of year and unit sales are projected to fall slightly by 1.0 percent to 430,000.

“Improved affordability, driven by flat or lower home prices and inexpensive mortgage financing, has been the principle catalyst in this recovery.  Pent up demand is also a factor in the lift we see in the second quarter numbers.  For six months straddling the year’s beginning, buyers stayed away from the market in an understandable, emotional reaction to very unsettled global economic conditions.  Canadians appear to be stepping beyond these fears and are once again moving onto and up the home ownership ladder,” stated Soper.

In early 2009, the precipitous drop in unit sales remains the most dramatic indicator of the recession’s impact on Canada’s real estate market.  With spring, consumers appeared ready to believe the worst was behind them and returned to the market in force, driving increased activity across each housing type.  Couple this with historically low interest rates and leveling unemployment, Canada’s residential real estate market got back on track during the quarter.

Undergoing an inevitable cyclical correction, price adjustments can be seen with marked variances across Canada’s provinces.  As expected, British Columbia and Alberta posted the most significant price modifications, as home values in those markets retreated in the wake of several mid-decade years of unsustainable price inflation, and have now evolved to a more balanced state.   Prices appear to have stabilized and it is expected that these regions will continue to see improvements into 2010.  In particular, the impact of lower home prices has improved affordability to the point that people are buying homes again on the West Coast, where sales activity has increased substantially.

Alternatively in Atlantic Canada, homes continue to appreciate due to strong local economies, which have helped to shelter the region somewhat from the turbulence witnessed in other provinces. As well, the region’s generally moderate home prices have helped keep demand strong.   Newfoundland, in particular, stands out as a region that continues to see significant home price appreciation, as supply cannot keep up with the demand driven by vibrant and growing industries such as those in the province’s oil and gas sector.

Meanwhile, home prices in Toronto declined slightly in the second quarter, reflecting the national average trend.  In the early spring, it was first-time buyers who triggered the increased activity levels, now those looking to move up are also active in the market. Similar to the situation in other large cities in central Canada, the most desirable neighbourhoods experienced supply shortages, which put upward pressure on prices.

“Looking ahead to the second half of 2009, year-over-year price comparisons will likely appear increasingly more favourable. It is important to remember that the baseline for the latter half of 2008 was unusually low, particularly in the fourth quarter when the full impact of the global financial crisis was felt. Our expectation is that most Canadian regions will experience stable housing prices through into the spring of 2010,” concluded Soper.

REGIONAL MARKET SUMMARIES

Halifax
In Halifax, a stable economy has contributed to a healthy real estate market where average house prices increased modestly despite a slight dip in sales activity.   The market is beginning to pick up following a slow first quarter.  Pent up demand will see a return to a more active market in the last half of the 2009 with the anticipation of a slight boost in sales activity and average house prices growing at a leisurely pace.

Montreal
The housing market in Montreal experienced a solid second quarter, with average house prices for most property types expected to increase for the remainder of 2009.  Higher inventory levels resulted in balanced market conditions seeing the number of new listings equal to the number of sales.  Low interest and unemployment rates will help maintain the strength of the real estate market through to the end of the year.

Ottawa
Ottawa continues to remain a steady market for residential real estate, with sales activity in the second quarter coming out strong from a slow first quarter.  Ranked number two among Canada’s large cities for affordable real estate and coupled with low interest rates, all types of buyers were drawn to the market.  House prices are expected to remain stable throughout the remainder of year with numbers slightly higher than anticipated.

Toronto
In Toronto, the real estate market witnessed significant second quarter gains.  The return of consumer confidence and an upswing in spring market activity brought house prices and unit sales down as buyers emerged to take advantage of affordable properties and low lending rates.
As the market begins its transition from a buyer’s market to a balanced market, with indications of a seller’s market arising, it’s anticipated that the market will stabilize by the end of year.

Winnipeg
Winnipeg’s real estate market has remained relatively resilient in the second quarter with average house prices in key housing segments increasing from the first quarter of 2009.  Real estate in Winnipeg is modestly priced when compared to other cities in Canada, creating ideal conditions for buyers in the province.  Looking ahead, average house prices are anticipated to stabilize for the remainder of the year.

Regina
Regina’s real estate market started on the road to recovery in the second quarter of 2009 and is expected to further improve through the remainder of the year.  An increase in unit sales helped diminish the city’s high inventory levels as buyers are beginning to initiate deals.   Recovering manufacturing and resource sectors, new construction activity in Regina, and low interest rates have also helped to improve buyer confidence.

Calgary
With the economic downturn and the oil and gas industry struggling, the housing market in Calgary has been on the decline since 2008, after many years of price inflation at the beginning of the decade.  Quarter one of 2009 revealed some signs of price increases and stabilization in certain areas in Calgary, but the second quarter reveals fluctuations in the market. These price fluctuations are occurring across Calgary in all housing types with the market forecast predicting price reductions for the remainder of 2009.

Edmonton
Housing market conditions in Edmonton were characterized by lower inventory levels and moderate house price increases.  Buyer demand was strong during the second quarter as most buyers felt a sense of urgency to capitalize on the recent market conditions.  This has led to a slight tightening in Edmonton’s housing market with appreciation in average house prices expected for the last half of 2009.

Vancouver
Vancouver’s real estate market stabilized in the second quarter of 2009 following a price correction that started last fall moving towards a balance between supply and demand. Properties priced at, or below, market value are generating multiple offers from buyers. Average house prices throughout the last half of the year are expected to inch upwards, but increases will likely be in the low single digits.

Royal LePage’s quarterly House Price Survey shows the annual change of prices for key housing segments in select national markets. Click here to view the chart (.PDF).

The Royal LePage Survey of Canadian House Prices is the largest, most comprehensive study of its kind in Canada, with information on seven types of housing in over 250 neighbourhoods from coast to coast.  This release references an abbreviated version of the survey, which highlights house price trends for the three most common types of housing in Canada in 80 communities across the country.  A complete database of past and present surveys is available on the Royal LePage Web site at www.royallepage.ca.  Current figures will be updated following the complete tabulation of the data for the second quarter. A printable version of the second quarter 2009 survey will be available online on August 7, 2009.

Housing values in the Royal LePage Survey are Royal LePage opinions of fair market value in each location, based on local data and market knowledge provided by Royal LePage residential real estate experts.  Historical data is available for some areas back to the early 1970s.

http://www.muchmormagazine.com/2009/07/canadian-housing-market-sees-bounce-back-from-awful-winter/

reviewed by Moishe Alexander, CFC CEO