Text By The Canadian Press
Published: October 17, 2010 4:41 PM
TORONTO — Home sales in Canada were down 20 per cent in September from the record highs of last year in what the chief economist of Canada’s main real estate industry group described Friday as a trend that will continue well into next year.
The Canadian Real Estate Association said Friday that 33,913 homes were sold in September, up three per cent from last month and the most since May.
But sales were still significantly lower than the 42,431 recorded last September, when buyers flocked to the market as the economy showed signs of recovery from the recession.
“They were pretty strong year-ago numbers, so that’s to be expected,” CREA’s chief economist, Gregory Klump, said of the drop in comparative numbers.
However, he noted that this September’s sales reflected similar sales for the month in 2006, 2007 and 2008.
Prices were little changed from last year at $331,089.
Unfavourable year-over-year comparisons are expected to continue into the second quarter of next year because sales didn’t start to drop from post-recession record highs until this spring, Klump said.
“We certainly do expect continued year-over-year comparisons to be negative until at least the end of the first quarter of 2011,” he said.
“If you take a look at what happened from the standpoint of sales activity in late 2008, early 2009, they fell to the lowest level in a decade.
“And when it became apparent that the worst of the economic crisis was behind us, a lot of deferred purchases began to flood back into the market.”
A pull-forward effect in advance of looming higher interest rates, tighter mortgage qualification rules and a new sales tax in Ontario and British Columbia that took effect this spring, further contributed to distorted year-on-year comparisons.
The impact of the recession on delaying purchases until late last year combined with the temporary factors that pushed sales ahead this spring condensed a flurry of demand into a very short time frame.
“It’s going to take a year for those things to fall out of the numbers,” Klump said.
“Even with steady numbers, compared to year ago levels, you’re still going to see comparisons that are going to fall short of some pretty extraordinary sales activity one year ago.”
Sherry Cooper, chief economist at the Bank of Montreal, said back-to-back advances in August and September figures followed an ugly slide in the first seven months of the year that saw sales plunge 30 per cent from peak to trough.
“The Canadian housing market has returned to balance, which still feels like a stark change from the rip-roaring sellers’ market seen (earlier this year),” she said in a note.
The slight monthly rise in sales can be attributed to falling five-year fixed mortgage rates, which have helped offset a decline in consumer confidence as the economy weakens, she added.
Shahrzad Mobasher Fard, an economist at TD Economics, said the pullback in mortgage rates will continue to stimulate borrowing and help home sale activity.
“This, together with recent developments in existing home sales activity, signal the likelihood that we are closer to a balanced market position than previously envisaged. Some firming up in existing home sales and prices may consequently be in sight,” he said.
However, he warned the decelerating pace of Canada’s economic growth, weak prospects for employment and income growth, and rising household indebtedness will limit Canadian existing home sales activity.
Two-thirds of local markets posted monthly increases in September, led by Winnipeg, Calgary, and Montreal, CREA said. Sales declined in only one province, Nova Scotia.
The number of new property listings coming on the market last month was up less than one per cent from August and remained 15 per cent below this year’s peak in April. At current levels of activity, it would take an estimated 6.6 months to sell all the homes on the market at the end of September. That’s down from 6.9 months in August and 7.2 months in July.
Tuesday, October 19, 2010
Tuesday, September 14, 2010
Housing starts fall for a thi
Text By Advocate staff
Published: September 10, 2010 9:27 AM
Activity in Red Deer’s residential construction sector could be waning, after a third consecutive month in which 2010 housing starts were down from 2009.
Canada Mortgage and Housing Corp. reported on Thursday that work began on 36 homes in the city last month: 23 single-detached houses and 13 units in multi-family projects. That’s down 43 per cent from August 2009, when there were 43 single-detached starts and 20 multi-family starts for a total of 63.
In July, Red Deer recorded 42 housing starts, one fewer than in July 2009. And in June, the tally was 46, as compared with 65 the previous year.
Despite these year-over-year declines, total housing starts in Red Deer so far this year remain 64 per cent ahead of the 2009 tally to the same point. As of Aug. 31, work had started on 435 homes: 266 single-detached and 169 multi-family. That compares with 266 during the first eight months of 2009, including 190 single-detached and 76 multi-family.
Among the seven largest urban centres in the province, Red Deer, Lethbridge and Grande Prairie all posted big declines in the number of housing starts recorded this August. The Regional Municipality of Wood Buffalo was up slightly and Medicine Hat, Calgary and Edmonton all had sizable jumps in residential construction starts last month.
Nationally, the seasonally adjusted annual rate of housing starts in August decreased three per cent from 12 months earlier, said CMHC.
“Housing starts moved lower in August, reflecting a decrease in both single and multiple starts,” said Bob Dugan, chief economist at CMHC’s market analysis centre
Text By Advocate staff
Published: September 10, 2010 9:27 AM
Activity in Red Deer’s residential construction sector could be waning, after a third consecutive month in which 2010 housing starts were down from 2009.
Canada Mortgage and Housing Corp. reported on Thursday that work began on 36 homes in the city last month: 23 single-detached houses and 13 units in multi-family projects. That’s down 43 per cent from August 2009, when there were 43 single-detached starts and 20 multi-family starts for a total of 63.
In July, Red Deer recorded 42 housing starts, one fewer than in July 2009. And in June, the tally was 46, as compared with 65 the previous year.
Despite these year-over-year declines, total housing starts in Red Deer so far this year remain 64 per cent ahead of the 2009 tally to the same point. As of Aug. 31, work had started on 435 homes: 266 single-detached and 169 multi-family. That compares with 266 during the first eight months of 2009, including 190 single-detached and 76 multi-family.
Among the seven largest urban centres in the province, Red Deer, Lethbridge and Grande Prairie all posted big declines in the number of housing starts recorded this August. The Regional Municipality of Wood Buffalo was up slightly and Medicine Hat, Calgary and Edmonton all had sizable jumps in residential construction starts last month.
Nationally, the seasonally adjusted annual rate of housing starts in August decreased three per cent from 12 months earlier, said CMHC.
“Housing starts moved lower in August, reflecting a decrease in both single and multiple starts,” said Bob Dugan, chief economist at CMHC’s market analysis centre
Saturday, September 4, 2010
First video
I have just posted my first video but without sound and music so I will be still getting educated on adding this. If you have some suggestions please let me know. Thanks
Wednesday, September 1, 2010
Resale activity slipping
Activity in the local residential resale market will remain subdued for the rest of this year, with only a slight improvement expected in 2011, says Canada Mortgage and Housing Corp.
In its latest housing market outlook, released on Tuesday, the national housing agency predicted that 3,000 Central Alberta homes will be sold through the Multiple Listing Service this year. That would be a 20.4 per cent drop from the 3,770 sales that closed in the region last year.
CMHC is projecting weaker year-over-year sales in five of Alberta’s seven larger urban centres, but the decline in Red Deer would be the greatest. Home resales in Calgary are forecast to fall 14 per cent, with Edmonton 11.2 per cent lower, Lethbridge down 8.4 per cent and Medicine Hat slipping 1.7 per cent.
MLS residential sales in Grande Prairie are expected to rise by 4.5 per cent, and the figure for the Regional Municipality of Wood Buffalo to jump 13.3 per cent this year.
In CMHC’s previous housing market outlook, issued in May, MLS sales in Central Alberta this year were anticipated to reach 3,500.
Looking further ahead, CMHC is calling for resales of local home to improve to 3,100 in 2011. Three months ago, it was forecasting 3,700 sales next year.
In its quarterly report, CMHC said resale transactions in Alberta received a boost during the first half of this year as buyers rushed to take advantage of market conditions — a trend that hasn’t continued.
Low interprovincial migration and higher monthly carrying costs for homeowners have also slowed sales.
Next year, said CMHC, “a tighter labour market, combined with wage growth and improved migration will expand sales in the low single-digits.”
For the Red Deer area, home resales are projected to reach 3,100 in 2011, as compared with the 3,700 that CMHC was forecasting in May.
Despite the drop in sales this year, CMHC expects the average price of MLS transactions in Central Alberta to hit $270,000 — 2.1 per cent higher than the $264,417 average last year but down slightly from the $273,000 it was forecasting in May. Next year, it anticipates that resale prices will average $275,000, a downward adjustment from the $282,000 it was previously projecting.
An increase in the number of home listings will continue to constrain prices, said CMHC.
The housing market outlook is rosier when it comes to new construction.
CMHC is anticipating 720 housing starts in Red Deer this year: 440 single-detached dwellings and 280 units in multi-family projects. Those figures are unchanged from the agency’s May forecast and much higher than the corresponding stats from 2009.
Specifically, residential starts this year are expected to be 44.9 per cent higher than last year’s 497, with the single-detached category up 32 per cent from the 333 starts last year, and multi-family units up 70.7 per cent over the 164 posted in 2009.
Compared to Alberta’s other large urban centres, the anticipated year-over-year jump in Red Deer’s total housing starts would be second only to Edmonton’s 50.4 per cent. And the local increase in the multi-family category would be the highest among the big cities.
Next year, housing starts in Red Deer are projected to number 770, with 460 single-detached homes and 310 multi-family units.
Those numbers are much more conservative than the figures CMHC was offering in May, when it projected 900 residential construction starts in 2011: 530 single-detached and 370 multi-family.
In its report, CMHC said the rising number of homes being built and increased competition from the resale market should impact demand and lead to a slowdown in the pace of construction.
“Wage and employment growth, as well as more balanced market conditions in 2011, will allow single-detached starts to increase in the single-digits.”
Nationally, CMHC is expecting housing starts to moderate during the remainder of this year and stabilize in 2011.
Bob Dugan, CMHC’s chief economist, said in a news release that existing home market conditions will remain balanced over the next two years as MLS resales ease and inventory levels remain elevated.
In 2011, MLS sales will move lower, CMHC said. And with an improved balance between demand and supply, the average MLS price is expected to edge lower through the end of 2010 and then rise modestly in 2011, it added.
In its latest housing market outlook, released on Tuesday, the national housing agency predicted that 3,000 Central Alberta homes will be sold through the Multiple Listing Service this year. That would be a 20.4 per cent drop from the 3,770 sales that closed in the region last year.
CMHC is projecting weaker year-over-year sales in five of Alberta’s seven larger urban centres, but the decline in Red Deer would be the greatest. Home resales in Calgary are forecast to fall 14 per cent, with Edmonton 11.2 per cent lower, Lethbridge down 8.4 per cent and Medicine Hat slipping 1.7 per cent.
MLS residential sales in Grande Prairie are expected to rise by 4.5 per cent, and the figure for the Regional Municipality of Wood Buffalo to jump 13.3 per cent this year.
In CMHC’s previous housing market outlook, issued in May, MLS sales in Central Alberta this year were anticipated to reach 3,500.
Looking further ahead, CMHC is calling for resales of local home to improve to 3,100 in 2011. Three months ago, it was forecasting 3,700 sales next year.
In its quarterly report, CMHC said resale transactions in Alberta received a boost during the first half of this year as buyers rushed to take advantage of market conditions — a trend that hasn’t continued.
Low interprovincial migration and higher monthly carrying costs for homeowners have also slowed sales.
Next year, said CMHC, “a tighter labour market, combined with wage growth and improved migration will expand sales in the low single-digits.”
For the Red Deer area, home resales are projected to reach 3,100 in 2011, as compared with the 3,700 that CMHC was forecasting in May.
Despite the drop in sales this year, CMHC expects the average price of MLS transactions in Central Alberta to hit $270,000 — 2.1 per cent higher than the $264,417 average last year but down slightly from the $273,000 it was forecasting in May. Next year, it anticipates that resale prices will average $275,000, a downward adjustment from the $282,000 it was previously projecting.
An increase in the number of home listings will continue to constrain prices, said CMHC.
The housing market outlook is rosier when it comes to new construction.
CMHC is anticipating 720 housing starts in Red Deer this year: 440 single-detached dwellings and 280 units in multi-family projects. Those figures are unchanged from the agency’s May forecast and much higher than the corresponding stats from 2009.
Specifically, residential starts this year are expected to be 44.9 per cent higher than last year’s 497, with the single-detached category up 32 per cent from the 333 starts last year, and multi-family units up 70.7 per cent over the 164 posted in 2009.
Compared to Alberta’s other large urban centres, the anticipated year-over-year jump in Red Deer’s total housing starts would be second only to Edmonton’s 50.4 per cent. And the local increase in the multi-family category would be the highest among the big cities.
Next year, housing starts in Red Deer are projected to number 770, with 460 single-detached homes and 310 multi-family units.
Those numbers are much more conservative than the figures CMHC was offering in May, when it projected 900 residential construction starts in 2011: 530 single-detached and 370 multi-family.
In its report, CMHC said the rising number of homes being built and increased competition from the resale market should impact demand and lead to a slowdown in the pace of construction.
“Wage and employment growth, as well as more balanced market conditions in 2011, will allow single-detached starts to increase in the single-digits.”
Nationally, CMHC is expecting housing starts to moderate during the remainder of this year and stabilize in 2011.
Bob Dugan, CMHC’s chief economist, said in a news release that existing home market conditions will remain balanced over the next two years as MLS resales ease and inventory levels remain elevated.
In 2011, MLS sales will move lower, CMHC said. And with an improved balance between demand and supply, the average MLS price is expected to edge lower through the end of 2010 and then rise modestly in 2011, it added.
Conflicting views on 'bubble' emerging
Home prices that continue to inflate even as sales and construction activity fall sparked conflicting views in two new reports Tuesday over whether the Canadian housing market has become a precarious bubble that could burst at any time.
The reports place renewed emphasis on questions that have been simmering since Canada’s housing market appeared to be overheating earlier this year before a major spring slowdown.
Is Canada experiencing a housing bubble?
If so, when will it burst? And, perhaps most troubling for homeowners, will Canadians face a crisis like the one in the U.S?
In the view of the Canadian Centre for Policy Alternatives, prices in six of Canada’s largest housing markets are in bubble territory for the first time in 30 years — and a U.S.-style correction is still not out of the question.
But the C.D. Howe Institute dismissed the possibility in its own report, which concluded that Canada’s cautious mortgage lending policies will protect against a housing crash similar to the one that has hammered the market in the United States.
Bubbles generally occur when housing prices rise faster than inflation, incomes and economic growth, until they reach unsustainable levels and a collapse in prices is triggered.
Many of the concerns about the Canadian housing market are motivated by the recent experience in the U.S., where one in 10 homeowners faces foreclosure.
But there is little likelihood of a surge in foreclosures or a collapse of house prices in Canada, according to the C.D. Howe report.
That’s because of the country’s tighter mortgage requirements — which include a minimum down payment of five per cent, as opposed to zero down at some U.S. banks — as well as regulations against risky lending and a much smaller subprime mortgage market, the C.D. Howe report says.
U.S. home prices fell about 30 per cent between 2006 and 2009, while Canadian prices fell only about nine per cent before a rapid bounceback last year.
Canadian homes are now estimated to be overvalued by as much as 15 to 20 per cent.
The CMHC predicts average prices in the third quarter of this year will be $336,400, a 2.4 per cent decline from an April peak of over $344,000.
The Canadian Centre for Policy Alternatives report says the steep rise in house prices — which now sit at 4.7 to 11.3 times Canadians’ annual income in many cities — is an “accident waiting to happen.”
It would take only a one to 1.25 per cent mortgage rate increase by Canada’s big banks to cause a housing crash similar to the one the U.S. is grappling with, said David Macdonald, author of the report.
However, many economists have concluded that Canada’s once-overheating housing market, which began to cool in the second quarter of the year, has stopped just shy of a bubble.
Adrienne Warren, a real estate economist at Scotiabank, said overvaluation in the Canadian market is largely due to underlying supply and demand conditions that have driven prices up, and not the type of speculative activity normally associated with a housing bubble.
“Given the strength of demand, there was a shortage of choice out there and that led to essentially sellers’ market conditions throughout the decade. It’s something that is fairly unprecedented,” Warren said.
She maintained that Canada’s housing market will avoid a sharp correction, and will instead continue to see a gradual softening in prices.
“A trigger for a sharp correction would be signs of overbuilding ... or a recession and a sharp rise in unemployment rates,” she said.
“That’s not the typical scenario we see unfolding for the next few years.”
Bob Dugan, chief economist at the Canada Mortgage and Housing Corporation, said new housing starts are expected to moderate in the second half of this year and stabilize in 2011 as they adjust to lower demand, which should further deflate fears of a bubble.
He pointed out that while prices have risen rapidly from a trough at the end of 2008, they have increased by a more moderate 2.1 per cent over the 31-month period beginning with a pre-recession peak of $325,000 at the end of 2007 to around $332,000 in July.
Dugan said home prices are expected to gradually decrease, and there isn’t a lot of evidence to support the fact that Canada is experiencing a house-price bubble.
The CMHC predicts average prices in the third quarter of this year will be $336,400, a 2.4 per cent decline from an April peak of over $344,000, Dugan said.
“I don’t think it has to do with a bursting bubble. It has to do with the fact that ... we’re seeing a different balance between supply and demand.”
The reports place renewed emphasis on questions that have been simmering since Canada’s housing market appeared to be overheating earlier this year before a major spring slowdown.
Is Canada experiencing a housing bubble?
If so, when will it burst? And, perhaps most troubling for homeowners, will Canadians face a crisis like the one in the U.S?
In the view of the Canadian Centre for Policy Alternatives, prices in six of Canada’s largest housing markets are in bubble territory for the first time in 30 years — and a U.S.-style correction is still not out of the question.
But the C.D. Howe Institute dismissed the possibility in its own report, which concluded that Canada’s cautious mortgage lending policies will protect against a housing crash similar to the one that has hammered the market in the United States.
Bubbles generally occur when housing prices rise faster than inflation, incomes and economic growth, until they reach unsustainable levels and a collapse in prices is triggered.
Many of the concerns about the Canadian housing market are motivated by the recent experience in the U.S., where one in 10 homeowners faces foreclosure.
But there is little likelihood of a surge in foreclosures or a collapse of house prices in Canada, according to the C.D. Howe report.
That’s because of the country’s tighter mortgage requirements — which include a minimum down payment of five per cent, as opposed to zero down at some U.S. banks — as well as regulations against risky lending and a much smaller subprime mortgage market, the C.D. Howe report says.
U.S. home prices fell about 30 per cent between 2006 and 2009, while Canadian prices fell only about nine per cent before a rapid bounceback last year.
Canadian homes are now estimated to be overvalued by as much as 15 to 20 per cent.
The CMHC predicts average prices in the third quarter of this year will be $336,400, a 2.4 per cent decline from an April peak of over $344,000.
The Canadian Centre for Policy Alternatives report says the steep rise in house prices — which now sit at 4.7 to 11.3 times Canadians’ annual income in many cities — is an “accident waiting to happen.”
It would take only a one to 1.25 per cent mortgage rate increase by Canada’s big banks to cause a housing crash similar to the one the U.S. is grappling with, said David Macdonald, author of the report.
However, many economists have concluded that Canada’s once-overheating housing market, which began to cool in the second quarter of the year, has stopped just shy of a bubble.
Adrienne Warren, a real estate economist at Scotiabank, said overvaluation in the Canadian market is largely due to underlying supply and demand conditions that have driven prices up, and not the type of speculative activity normally associated with a housing bubble.
“Given the strength of demand, there was a shortage of choice out there and that led to essentially sellers’ market conditions throughout the decade. It’s something that is fairly unprecedented,” Warren said.
She maintained that Canada’s housing market will avoid a sharp correction, and will instead continue to see a gradual softening in prices.
“A trigger for a sharp correction would be signs of overbuilding ... or a recession and a sharp rise in unemployment rates,” she said.
“That’s not the typical scenario we see unfolding for the next few years.”
Bob Dugan, chief economist at the Canada Mortgage and Housing Corporation, said new housing starts are expected to moderate in the second half of this year and stabilize in 2011 as they adjust to lower demand, which should further deflate fears of a bubble.
He pointed out that while prices have risen rapidly from a trough at the end of 2008, they have increased by a more moderate 2.1 per cent over the 31-month period beginning with a pre-recession peak of $325,000 at the end of 2007 to around $332,000 in July.
Dugan said home prices are expected to gradually decrease, and there isn’t a lot of evidence to support the fact that Canada is experiencing a house-price bubble.
The CMHC predicts average prices in the third quarter of this year will be $336,400, a 2.4 per cent decline from an April peak of over $344,000, Dugan said.
“I don’t think it has to do with a bursting bubble. It has to do with the fact that ... we’re seeing a different balance between supply and demand.”
Housing bubble threat resurfaces
Home sales may be slowing, but prices in six of Canada's largest housing markets are in bubble territory for the first time in 30 years — and a U.S.-style correction is still not out of the question, according to a report from an Ottawa-based think tank.
The report by the Canadian Centre for Policy Alternatives, to be released Tuesday, says home prices now sit at 4.7 to 11.3 times Canadians’ annual income — much higher than historical comfort levels of between three and four times income.
"To see all of the (major) markets outside of that comfort zone is very unique and concerning," said David Macdonald, a research associate who authored the report entitled "Canada's Housing Bubble: An Accident Waiting To Happen."
Sales have fallen by 25 per cent since reaching a peak at the beginning of the year as fewer buyers compete and more houses come onto the market. But Canadian home prices were up 13.6 per cent in June from a year ago in Canada's major cities, according to the Teranet-National Bank composite house price index.
June prices were up 1.5 per cent compared to May — the largest monthly increase since last August and the 14th straight monthly increase.
The steep rise in house prices in so many cities points toward an "accident waiting to happen,” Macdonald said.
In the past 30 years Canada's housing market has undergone three bubbles. Bubbles occur when housing prices increase more rapidly than inflation, household incomes and economic growth, according to the report.
Each of Canada's previous bubbles was punctured by only a one per cent rise in interest rates over two years, Macdonald warned.
It would take only a one per cent to 1.25 per cent mortgage rate increase by Canada's big banks to cause a housing crash similar to the one the U.S. is grappling with, he added.
Vancouver saw housing bubbles in 1981 and 1994 and another one burst in Toronto in 1989. In Canada's other major markets — Calgary, Edmonton, Ottawa, and Montreal — prices remained stable from 1980 to 2001 at around $150,000 to $220,000 in today's dollars.
"The concern today is all six major markets, not just Vancouver and Toronto, are out of that comfort zone," Macdonald said. "All six major markets now have an average price of over $300,000."
And the current cooling trend doesn't necessarily signify that the market has emerged from a bubble, he added.
Before Toronto's housing market crashed in 1989, the market saw a similar decline in sales volumes in 1987, but that marked only the halfway point before further increases led to the burst.
Douglas Porter, deputy chief economist at the Bank of Montreal, said that while the report's warnings should not be dismissed as completely improbable, it's clear that the market is backing off bubble territory as price increases subside.
"Given the rebound we've seen in employment in the last year in Canada and the fact that interest rates are still at extremely favourable levels, I can't get that pessimistic on the outlook for housing," he said.
Many economists have concluded that Canada's once overheating housing market, which began to cool in the second quarter of the year, has stopped just shy of a bubble. They credit stricter Canadian lending rules with preventing the type of dramatic crash experienced stateside, where one in 10 households is facing foreclosure.
"A lot of the fundamental differences between the Canadian and U.S. markets suggest that we're far less likely to have the kind of deep downturn that the U.S. market went through," said Porter.
However, Canada is not immune to a serious housing market correction and if prices continue to rise for a prolonged period, even as the resale market slides, that could be a danger sign, he added.
Macdonald said he sees at least a few similarities in home price index data between some American and Canadian cities. Calgary and Edmonton have seen the same price increases as some of the worst-hit U.S. cities, for example.
Canadian homes remain affordable because mortgage rates sit at record lows, but home affordability could change rapidly if rates return even partway to their historic norms, the report warns.
If that does happen, young families who have over-extended themselves and seniors relying on selling their house for retirement income would be most affected.
Macdonald said there's about a six-month to one-year window of opportunity before mortgage rates rise dramatically to "let some air out of the housing market" and help prevent the possibility of future bubbles.
Mortgage qualification changes announced in April, meant to discourage homeowners from taking out mortgages on homes they might not be able to afford down the road, didn't go far enough, Macdonald said.
He argued that the government should change the required downpayment from five per cent to ten per cent to further deter those who won't be able to afford rate increases.
But Porter said there's little point in increasing the minimum downpayment level now as the market is softening on its own.
He pointed out that the bubble bursts of the early 1990s were sparked by the Bank of Canada's decision to raise interest rates to 10 per cent above inflation, aimed at taking down the housing market.
"I don't see the Bank of Canada going on a campaign to lift interest rates to absolutely crush the housing sector. It's just not that much of an inflation concern to them this time," Porter said.
The report by the Canadian Centre for Policy Alternatives, to be released Tuesday, says home prices now sit at 4.7 to 11.3 times Canadians’ annual income — much higher than historical comfort levels of between three and four times income.
"To see all of the (major) markets outside of that comfort zone is very unique and concerning," said David Macdonald, a research associate who authored the report entitled "Canada's Housing Bubble: An Accident Waiting To Happen."
Sales have fallen by 25 per cent since reaching a peak at the beginning of the year as fewer buyers compete and more houses come onto the market. But Canadian home prices were up 13.6 per cent in June from a year ago in Canada's major cities, according to the Teranet-National Bank composite house price index.
June prices were up 1.5 per cent compared to May — the largest monthly increase since last August and the 14th straight monthly increase.
The steep rise in house prices in so many cities points toward an "accident waiting to happen,” Macdonald said.
In the past 30 years Canada's housing market has undergone three bubbles. Bubbles occur when housing prices increase more rapidly than inflation, household incomes and economic growth, according to the report.
Each of Canada's previous bubbles was punctured by only a one per cent rise in interest rates over two years, Macdonald warned.
It would take only a one per cent to 1.25 per cent mortgage rate increase by Canada's big banks to cause a housing crash similar to the one the U.S. is grappling with, he added.
Vancouver saw housing bubbles in 1981 and 1994 and another one burst in Toronto in 1989. In Canada's other major markets — Calgary, Edmonton, Ottawa, and Montreal — prices remained stable from 1980 to 2001 at around $150,000 to $220,000 in today's dollars.
"The concern today is all six major markets, not just Vancouver and Toronto, are out of that comfort zone," Macdonald said. "All six major markets now have an average price of over $300,000."
And the current cooling trend doesn't necessarily signify that the market has emerged from a bubble, he added.
Before Toronto's housing market crashed in 1989, the market saw a similar decline in sales volumes in 1987, but that marked only the halfway point before further increases led to the burst.
Douglas Porter, deputy chief economist at the Bank of Montreal, said that while the report's warnings should not be dismissed as completely improbable, it's clear that the market is backing off bubble territory as price increases subside.
"Given the rebound we've seen in employment in the last year in Canada and the fact that interest rates are still at extremely favourable levels, I can't get that pessimistic on the outlook for housing," he said.
Many economists have concluded that Canada's once overheating housing market, which began to cool in the second quarter of the year, has stopped just shy of a bubble. They credit stricter Canadian lending rules with preventing the type of dramatic crash experienced stateside, where one in 10 households is facing foreclosure.
"A lot of the fundamental differences between the Canadian and U.S. markets suggest that we're far less likely to have the kind of deep downturn that the U.S. market went through," said Porter.
However, Canada is not immune to a serious housing market correction and if prices continue to rise for a prolonged period, even as the resale market slides, that could be a danger sign, he added.
Macdonald said he sees at least a few similarities in home price index data between some American and Canadian cities. Calgary and Edmonton have seen the same price increases as some of the worst-hit U.S. cities, for example.
Canadian homes remain affordable because mortgage rates sit at record lows, but home affordability could change rapidly if rates return even partway to their historic norms, the report warns.
If that does happen, young families who have over-extended themselves and seniors relying on selling their house for retirement income would be most affected.
Macdonald said there's about a six-month to one-year window of opportunity before mortgage rates rise dramatically to "let some air out of the housing market" and help prevent the possibility of future bubbles.
Mortgage qualification changes announced in April, meant to discourage homeowners from taking out mortgages on homes they might not be able to afford down the road, didn't go far enough, Macdonald said.
He argued that the government should change the required downpayment from five per cent to ten per cent to further deter those who won't be able to afford rate increases.
But Porter said there's little point in increasing the minimum downpayment level now as the market is softening on its own.
He pointed out that the bubble bursts of the early 1990s were sparked by the Bank of Canada's decision to raise interest rates to 10 per cent above inflation, aimed at taking down the housing market.
"I don't see the Bank of Canada going on a campaign to lift interest rates to absolutely crush the housing sector. It's just not that much of an inflation concern to them this time," Porter said.
Friday, August 27, 2010
Do I Buy or Should I Wait
I am getting asked by many people whether they are clients or acquaintances DO I BUY OR SHOULD I WAIT. This question is probably one of the most discussed topics right now no matter where you are in the world.
Two years ago when we were affected by the economic downturn everyone’s investments took a hit including their homes. We read about the markets bouncing back and therefore real estate rebounding, this may be true in the large financial centers but is it happening here in our local market? Are we in for another adjustment or a double dip as economists call it? I think you need to look at supply and demand because price movements are not always correct while the number of units sold is absolute. This is where my concern is because inventory levels are up substantially. Is there a problem with financing I do not think so. You can read all you want about the national market but you must remember that real estate is local and I believe that the oil industry is getting ready for busier winter based on what I am hearing and therefore in a few months the spinoff will be great for my business. The people that look at the opportunity today and act on it, will I believe have taken advantage of an opportunity we have not seen since the early eighties. In my opinion that opportunity is found in newer homes under $300,000.00 in Red Deer, Lakefront property at Sylvan Lake, and Valley of the Sun properties in Arizona. I am also seeing what I believe are buying opportunities in specific areas of the Euro zone because of downward price adjustments, currency differences and the biggest adjustment is yet to come because of the change the Euro zone needs to make to adjust to the new world economic realities.
Two years ago when we were affected by the economic downturn everyone’s investments took a hit including their homes. We read about the markets bouncing back and therefore real estate rebounding, this may be true in the large financial centers but is it happening here in our local market? Are we in for another adjustment or a double dip as economists call it? I think you need to look at supply and demand because price movements are not always correct while the number of units sold is absolute. This is where my concern is because inventory levels are up substantially. Is there a problem with financing I do not think so. You can read all you want about the national market but you must remember that real estate is local and I believe that the oil industry is getting ready for busier winter based on what I am hearing and therefore in a few months the spinoff will be great for my business. The people that look at the opportunity today and act on it, will I believe have taken advantage of an opportunity we have not seen since the early eighties. In my opinion that opportunity is found in newer homes under $300,000.00 in Red Deer, Lakefront property at Sylvan Lake, and Valley of the Sun properties in Arizona. I am also seeing what I believe are buying opportunities in specific areas of the Euro zone because of downward price adjustments, currency differences and the biggest adjustment is yet to come because of the change the Euro zone needs to make to adjust to the new world economic realities.
Friday, July 16, 2010
Summertime: July Finally
We are really starting to see some good weather and it will become harder to put deals together as the buyers, sellers and facilitators all put themselves into a summer mood and schedule until the kids get back in school. At this time of the year I like to look at the market and adjust my business plan for the balance of the year. What I have noticed in the first 6 months of this year is that unit sales are down, inventory levels are increasing more than I expected, pricing in my opinion has held steady but for how long.
I think we will see mortgage rates continue to trend upward through the remainder of the year; the stock market will be flat and finish with a loss compared to where it started the year. It is my opinion credit thru the banks will continue to be tight for any type of borrowing.
As an investor there are still strong opportunities if you are prepared to hold properties or re merchandise properties such as zoning changes for suites and look at a realistic returned based on the amount invested not on the total leveraged amount.
As an investor I still believe the fundamentals of diversification, risk management and cash property re balancing need to be addressed so you can take advantage of the many opportunities that will present themselves in the next few months. Are you adaptable to the market changes?
All of this means business in the next few months will be more challenging to complete and will take all-embracing expansive type of experience not just more experience. As inventories increase, prices will start to fall so motivation and realism will rule the day to complete the negotiations. Anyone can write the deal but can they get it to close? This will be the question going forward.
What are a few things you need to consider when selling your home
1) Know the current situation in the housing market
2) Price your property realistically
3) Smarten up your home
4) Avoid delays in the selling process
5) Eliminate any problems before you list
6) Read the contracts you are signing
7) Make sure you understand the representation you are receiving
8) Choose the right agent
It is my opinion that the next few months will be like a child in the candy store who likes 10 candies but can only have one but which one. Welcome to real estate going forward this year.
I think we will see mortgage rates continue to trend upward through the remainder of the year; the stock market will be flat and finish with a loss compared to where it started the year. It is my opinion credit thru the banks will continue to be tight for any type of borrowing.
As an investor there are still strong opportunities if you are prepared to hold properties or re merchandise properties such as zoning changes for suites and look at a realistic returned based on the amount invested not on the total leveraged amount.
As an investor I still believe the fundamentals of diversification, risk management and cash property re balancing need to be addressed so you can take advantage of the many opportunities that will present themselves in the next few months. Are you adaptable to the market changes?
All of this means business in the next few months will be more challenging to complete and will take all-embracing expansive type of experience not just more experience. As inventories increase, prices will start to fall so motivation and realism will rule the day to complete the negotiations. Anyone can write the deal but can they get it to close? This will be the question going forward.
What are a few things you need to consider when selling your home
1) Know the current situation in the housing market
2) Price your property realistically
3) Smarten up your home
4) Avoid delays in the selling process
5) Eliminate any problems before you list
6) Read the contracts you are signing
7) Make sure you understand the representation you are receiving
8) Choose the right agent
It is my opinion that the next few months will be like a child in the candy store who likes 10 candies but can only have one but which one. Welcome to real estate going forward this year.
Home sales continue slide in June
Canada’s housing market continued to slide in June in a trend that economists expect will be accelerated by an anticipated interest rate hike by the Bank of Canada next week.
Seasonally-adjusted home sales fell 8.2 per cent in June from May levels, according to statistics released Thursday by the Canadian Real Estate Association.
“With interest rates on the rise, housing affordability and home sales activity are expected to continue to erode over the second half of 2010,” Gregory Klump, the Canadian Real Estate Association’s chief economist, said in the report.
“National home sales activity is easing due to fewer and more cautious first-time homebuyers,” he added.
Home sales are now down 25 per cent from the peaks reached at the end of last year, said Bank of Montreal (TSX:BMO) deputy chief economist Douglas Porter, who added that the sector is now firmly in buyer’s market terrain.
Housing sales were front-end loaded in the early months of 2010 ahead of higher interest rates and the new harmonized sales tax in the hot markets of British Columbia and Ontario, but “are now in rapid reverse,” Porter wrote in a note Thursday.
Economists have predicted a slowdown in the housing market in the second half of the year as many buyers hurried to close in late 2009 and the first half of this year to take advantage of record low interest rates.
The Bank of Canada is widely expected to hike interest rates a quarter-point to 0.75 per cent in its policy announcement next week.
“(That) may add yet another dampener to sales, although the recent slide in longer-term mortgage rates suggests borrowing costs may be less of a factor on housing than initially feared,” Porter said.
Sales have declined about 13.3 per cent from near-record levels seen in the first quarter. In May, seasonally adjusted home sales departed from historical averages to drop by 9.5 per cent nationally from near-record activity the month before.
Sales activity in the second quarter of this year stood 2.8 per cent below the comparable 2009 period, but on a year-to-date basis, sales are up 13.6 per cent.
“This gap is expected to shrink as the year progresses, since activity trended upward over the second half of last year and is forecast to continue easing over the second half of 2010,” CREA said in its release.
Toronto and Calgary led June’s decline that saw sales contract in nearly 70 per cent of local markets last month.
The market is becoming more challenging for sellers as buyers are in less of a hurry to make a purchase. Tighter mortgage regulations and anticipated interest rate hikes are also eroding some of the competitive pressure to get into the market, CREA said.
Some economists had predicted a boost in June sales driven by a rush to market before the HST hit Ontario and B.C. on July 1, but any pickup as a result of that wasn’t enough to offset weaker overall sales.
Meanwhile, the number of newly listed homes on CREA’s Multiple Listing Service declined 6.8 per cent last month from May — a trend the association says will help maintain balance between supply and demand.
Although a more balanced market is expected to eventually bring prices down, the national average price of a home rose 4.9 per cent on a year-over-year basis to $342,662 last month. That was down from the 8.5 per cent increase in May, which was a slower increase than has been seen over the past nine months.
On a seasonally-adjusted basis, it would take 6.9 months to sell all of the houses on the market in June at the current rate of sales activity — the highest number since March 2009. It could rise further as sales activity trends lower.
“While the pricing environment is becoming more challenging, a recovering economy and job market will provide support for housing activity and prices,” Klump said.
Porter noted that seasonally adjusted prices have stabilized since last fall.
He believes there will be some modest declines in prices before the year is over — particularly in the HST affected markets of B.C. and Ontario. However, double-digit price increases in hot markets like Vancouver are still much more common than price declines in major markets.
“It will be just a matter of months before the year-on-year price comparisons sag to around the zero line,” Porter said.
“While the headlines may look soggy for the next few months, there are reasons to believe the market could soon regain its balance (since) long-term mortgage rates have dropped, employment remains on a roll, and prices have stabilized,” he added.
Seasonally-adjusted home sales fell 8.2 per cent in June from May levels, according to statistics released Thursday by the Canadian Real Estate Association.
“With interest rates on the rise, housing affordability and home sales activity are expected to continue to erode over the second half of 2010,” Gregory Klump, the Canadian Real Estate Association’s chief economist, said in the report.
“National home sales activity is easing due to fewer and more cautious first-time homebuyers,” he added.
Home sales are now down 25 per cent from the peaks reached at the end of last year, said Bank of Montreal (TSX:BMO) deputy chief economist Douglas Porter, who added that the sector is now firmly in buyer’s market terrain.
Housing sales were front-end loaded in the early months of 2010 ahead of higher interest rates and the new harmonized sales tax in the hot markets of British Columbia and Ontario, but “are now in rapid reverse,” Porter wrote in a note Thursday.
Economists have predicted a slowdown in the housing market in the second half of the year as many buyers hurried to close in late 2009 and the first half of this year to take advantage of record low interest rates.
The Bank of Canada is widely expected to hike interest rates a quarter-point to 0.75 per cent in its policy announcement next week.
“(That) may add yet another dampener to sales, although the recent slide in longer-term mortgage rates suggests borrowing costs may be less of a factor on housing than initially feared,” Porter said.
Sales have declined about 13.3 per cent from near-record levels seen in the first quarter. In May, seasonally adjusted home sales departed from historical averages to drop by 9.5 per cent nationally from near-record activity the month before.
Sales activity in the second quarter of this year stood 2.8 per cent below the comparable 2009 period, but on a year-to-date basis, sales are up 13.6 per cent.
“This gap is expected to shrink as the year progresses, since activity trended upward over the second half of last year and is forecast to continue easing over the second half of 2010,” CREA said in its release.
Toronto and Calgary led June’s decline that saw sales contract in nearly 70 per cent of local markets last month.
The market is becoming more challenging for sellers as buyers are in less of a hurry to make a purchase. Tighter mortgage regulations and anticipated interest rate hikes are also eroding some of the competitive pressure to get into the market, CREA said.
Some economists had predicted a boost in June sales driven by a rush to market before the HST hit Ontario and B.C. on July 1, but any pickup as a result of that wasn’t enough to offset weaker overall sales.
Meanwhile, the number of newly listed homes on CREA’s Multiple Listing Service declined 6.8 per cent last month from May — a trend the association says will help maintain balance between supply and demand.
Although a more balanced market is expected to eventually bring prices down, the national average price of a home rose 4.9 per cent on a year-over-year basis to $342,662 last month. That was down from the 8.5 per cent increase in May, which was a slower increase than has been seen over the past nine months.
On a seasonally-adjusted basis, it would take 6.9 months to sell all of the houses on the market in June at the current rate of sales activity — the highest number since March 2009. It could rise further as sales activity trends lower.
“While the pricing environment is becoming more challenging, a recovering economy and job market will provide support for housing activity and prices,” Klump said.
Porter noted that seasonally adjusted prices have stabilized since last fall.
He believes there will be some modest declines in prices before the year is over — particularly in the HST affected markets of B.C. and Ontario. However, double-digit price increases in hot markets like Vancouver are still much more common than price declines in major markets.
“It will be just a matter of months before the year-on-year price comparisons sag to around the zero line,” Porter said.
“While the headlines may look soggy for the next few months, there are reasons to believe the market could soon regain its balance (since) long-term mortgage rates have dropped, employment remains on a roll, and prices have stabilized,” he added.
Monday, June 7, 2010
Red Deer ranked highly for property
Looking for a Canadian city in which to put some money?
Red Deer should rank high on your list, says a Calgary-based organization that researches property investment opportunities.
The Real Estate Investment Network (REIN) has included the Central Alberta city on a list of 11 places it said deserve consideration by prospective property buyers. The others are Calgary, Edmonton and St. Albert; Surrey and Maple Ridge, B.C.; Saskatoon, Sask.; Winnipeg; and Kitchener-Waterloo-Cambridge, Hamilton and Simcoe Shores (Barrie-Orillia), Ont.
A report issued by REIN said Red Deer’s appeal is helped by its location on the bustling Calgary-Edmonton corridor. It added that the city and Red Deer County have experienced “tremendous economic growth” in the past seven years and the impact of the recent economic downturn was less prevalent there.
The report added that an influx of people to the region has helped support a strong rental and real estate market, and it credits municipal leaders for creating “a vision of renewal, revitalization and economic stability.”
It also acknowledged that Red Deer will suffer some growing pains as it diversifies, and urged investors to review plans for the city to identify opportunities.
Written by REIN president Don Campbell — who has published several books about investing in Canadian real estate — as well as REIN researchers Melanie Reuter and Allyssa Epp, the report said markets should be analyzed by looking at a number of factors. These include income, population and job growth relative to the provincial average, economic diversity, political leadership, infrastructure development and appeal to baby boomers, among others.
Red Deer should rank high on your list, says a Calgary-based organization that researches property investment opportunities.
The Real Estate Investment Network (REIN) has included the Central Alberta city on a list of 11 places it said deserve consideration by prospective property buyers. The others are Calgary, Edmonton and St. Albert; Surrey and Maple Ridge, B.C.; Saskatoon, Sask.; Winnipeg; and Kitchener-Waterloo-Cambridge, Hamilton and Simcoe Shores (Barrie-Orillia), Ont.
A report issued by REIN said Red Deer’s appeal is helped by its location on the bustling Calgary-Edmonton corridor. It added that the city and Red Deer County have experienced “tremendous economic growth” in the past seven years and the impact of the recent economic downturn was less prevalent there.
The report added that an influx of people to the region has helped support a strong rental and real estate market, and it credits municipal leaders for creating “a vision of renewal, revitalization and economic stability.”
It also acknowledged that Red Deer will suffer some growing pains as it diversifies, and urged investors to review plans for the city to identify opportunities.
Written by REIN president Don Campbell — who has published several books about investing in Canadian real estate — as well as REIN researchers Melanie Reuter and Allyssa Epp, the report said markets should be analyzed by looking at a number of factors. These include income, population and job growth relative to the provincial average, economic diversity, political leadership, infrastructure development and appeal to baby boomers, among others.
Thursday, May 27, 2010
Rec property sales soar from last year
Recreational property sales in most major Canadian markets have soared this year compared with a year ago, according to a report released Thursday by Re/Max.
The 2010 Re/Max Recreational Property Report found that 79 per cent of recreational areas reported an upswing in the number of properties sold during the first three months of the year. Starting prices for recreational properties were also on the move, with 43 per cent posting a nominal increase.
The report said the number of units sold in Canmore was up a substantial 130 per cent over a year ago, with 90 properties sold between January and March as opposed to 39 sales for the same period in 2009.
But the average price dipped by 17 per cent to $583,000 from $684,000, "bringing values more in line with markets further afield like Fernie and Invermere."
"Lower values -- combined with rock-bottom interest rates -- have finally kick-started Canmore's recreational property market," said the Re/ Max report.
"The popular resort area lagged behind Calgary and Edmonton in terms of housing recovery, but with prices now at or near bottom, cautious purchasers are coming out of the woodwork."
Pablo Martinez and his partner Gen Bouchard noticed the price reduction when they started looking for a place in Canmore close to three months ago. They purchased a condominium in the resort area about a month ago.
"It was good timing for both of us," said Martinez. "Canmore was a perfect place because we like the outdoors and the landscape is just fantastic.
"The price had dropped a lot. It was affordable for us. It was a very good deal."
Jessica Stoner, with Re/Max Alpine Realty, said the Canmore market has improved since last year.
"Last year there was just not much moving," Stoner said. "The sellers were not able to sell and the buyers were not able to buy because the price point overall hadn't adjusted much in Canmore. Over the last year we've had corrections. We just took longer to get there and because of that now the buyers are very interested in Canmore and the sellers are able to sell it. It's a far-improved market now."
The report said entry-level condominiums have sparked the greatest attention, with one-bedroom units most popular with first-time buyers of secondary properties.
"Demand in the top end of the market has also been on the upswing as buyers take advantage of softer prices. The most expensive sale so far this year was priced at $2.1 million."
As a contrast to Canmore, Sylvan Lake, the other recreational property market surveyed by the report, has seen buyers "continue to sit on the sidelines."
"No waterfront sales have been recorded to date, although a handful of back row properties have sold under $500,000," said Re/Max. "The starting price for a three-bedroom, winterized recreational property on a prime waterfront lot on Sylvan Lake is now $1.2 million.
"Pricing will be critical this season as well-priced properties are expected to move, while those that are overpriced will stagnate."
Carl Stepp, with Re/Max Real Estate Central Alberta, said last year's recreational property market in Sylvan Lake was "relatively slow with the downturn in the economy obviously."
"But there's definitely more people out and about looking around. Sales aren't a whole lot more than they were last spring, but there's more people looking anyway. Showing a little more promise," said Stepp.
"I think as the oilpatch picks up, because we are solely dependent on the oilfield here, people will be back looking at recreational property, lakefront property."
The report said oil executives, aged 35 to 45, with young children, have eclipsed the Baby Boomers as the most active purchasers in the Sylvan Lake market. Re/Max said many potential buyers are being lost to bargain U.S. markets.
At the national level, "stronger than expected economic recovery, combined with additional incentives such as rising interest rates, stricter lending criteria and a new sales tax, have served to kick-start activity in recreational property markets from coast-to-coast," said Elton Ash, regional executive vice-president, Re/ Max of Western Canada.
The 2010 Re/Max Recreational Property Report found that 79 per cent of recreational areas reported an upswing in the number of properties sold during the first three months of the year. Starting prices for recreational properties were also on the move, with 43 per cent posting a nominal increase.
The report said the number of units sold in Canmore was up a substantial 130 per cent over a year ago, with 90 properties sold between January and March as opposed to 39 sales for the same period in 2009.
But the average price dipped by 17 per cent to $583,000 from $684,000, "bringing values more in line with markets further afield like Fernie and Invermere."
"Lower values -- combined with rock-bottom interest rates -- have finally kick-started Canmore's recreational property market," said the Re/ Max report.
"The popular resort area lagged behind Calgary and Edmonton in terms of housing recovery, but with prices now at or near bottom, cautious purchasers are coming out of the woodwork."
Pablo Martinez and his partner Gen Bouchard noticed the price reduction when they started looking for a place in Canmore close to three months ago. They purchased a condominium in the resort area about a month ago.
"It was good timing for both of us," said Martinez. "Canmore was a perfect place because we like the outdoors and the landscape is just fantastic.
"The price had dropped a lot. It was affordable for us. It was a very good deal."
Jessica Stoner, with Re/Max Alpine Realty, said the Canmore market has improved since last year.
"Last year there was just not much moving," Stoner said. "The sellers were not able to sell and the buyers were not able to buy because the price point overall hadn't adjusted much in Canmore. Over the last year we've had corrections. We just took longer to get there and because of that now the buyers are very interested in Canmore and the sellers are able to sell it. It's a far-improved market now."
The report said entry-level condominiums have sparked the greatest attention, with one-bedroom units most popular with first-time buyers of secondary properties.
"Demand in the top end of the market has also been on the upswing as buyers take advantage of softer prices. The most expensive sale so far this year was priced at $2.1 million."
As a contrast to Canmore, Sylvan Lake, the other recreational property market surveyed by the report, has seen buyers "continue to sit on the sidelines."
"No waterfront sales have been recorded to date, although a handful of back row properties have sold under $500,000," said Re/Max. "The starting price for a three-bedroom, winterized recreational property on a prime waterfront lot on Sylvan Lake is now $1.2 million.
"Pricing will be critical this season as well-priced properties are expected to move, while those that are overpriced will stagnate."
Carl Stepp, with Re/Max Real Estate Central Alberta, said last year's recreational property market in Sylvan Lake was "relatively slow with the downturn in the economy obviously."
"But there's definitely more people out and about looking around. Sales aren't a whole lot more than they were last spring, but there's more people looking anyway. Showing a little more promise," said Stepp.
"I think as the oilpatch picks up, because we are solely dependent on the oilfield here, people will be back looking at recreational property, lakefront property."
The report said oil executives, aged 35 to 45, with young children, have eclipsed the Baby Boomers as the most active purchasers in the Sylvan Lake market. Re/Max said many potential buyers are being lost to bargain U.S. markets.
At the national level, "stronger than expected economic recovery, combined with additional incentives such as rising interest rates, stricter lending criteria and a new sales tax, have served to kick-start activity in recreational property markets from coast-to-coast," said Elton Ash, regional executive vice-president, Re/ Max of Western Canada.
Sylvan Lake home to some of Canada’s priciest waterfront
Canada’s priciest waterfront might now be located on Sylvan Lake.
The 2010 Re/Max Recreational Property Report, released on Thursday, places the starting price for a three-bedroom lakefront property on the Central Alberta lake at $1.2 million. That’s the same as for a comparable home on Lake Windermere in British Columbia, and higher than the nearly 50 other resort communities considered in the report.
Last year, Re/Max’s Recreational Property Report determined that the starting price for lakefront property at Sylvan Lake was $1,125,000. That ranked behind Lake Windermere and Vernon, B.C., which each came in at $1.2 million.
In the 2008 report, Sylvan Lake’s price was $1,250,000, and the year before that it was $1 million.
Re/Max noted this year that no waterfront properties at Sylvan Lake had been sold as of March 31. Back row homes were going for less than $500,000, with water-access properties available from $800,000 and smaller cottages from $600,000.
The most expensive property available on Sylvan Lake is priced at $2.5 million, said the report, with the cheapest $598,000.
Typical buyers of recreational property at Sylvan Lake were identified as 35- to 45-year-old oil executives from Edmonton or Calgary, with young families.
Canmore was the only other Alberta community included in the report, with the starting price for a two-bedroom condominium there listed at $270,000.
The least expensive waterfront properties in Canada were on Newfoundland’s east coast, with the starting price for a three-bedroom home there $105,000.
The other most expensive included Vernon ($1.15 million), Tofino ($875,000), Salt Spring Island ($750,000 to $800,000), Fraser Valley ($800,000) and Okanagan Valley ($800,000), all of which are in B.C.
The report noted that sales of recreational property have increased in nearly 80 per cent of the areas considered, with prices going up in 43 per cent.
It added that few Americans are now buying recreational properties in Canada. Instead, discounted homes in the southern states are drawing purchasers from Canada.
The 2010 Re/Max Recreational Property Report, released on Thursday, places the starting price for a three-bedroom lakefront property on the Central Alberta lake at $1.2 million. That’s the same as for a comparable home on Lake Windermere in British Columbia, and higher than the nearly 50 other resort communities considered in the report.
Last year, Re/Max’s Recreational Property Report determined that the starting price for lakefront property at Sylvan Lake was $1,125,000. That ranked behind Lake Windermere and Vernon, B.C., which each came in at $1.2 million.
In the 2008 report, Sylvan Lake’s price was $1,250,000, and the year before that it was $1 million.
Re/Max noted this year that no waterfront properties at Sylvan Lake had been sold as of March 31. Back row homes were going for less than $500,000, with water-access properties available from $800,000 and smaller cottages from $600,000.
The most expensive property available on Sylvan Lake is priced at $2.5 million, said the report, with the cheapest $598,000.
Typical buyers of recreational property at Sylvan Lake were identified as 35- to 45-year-old oil executives from Edmonton or Calgary, with young families.
Canmore was the only other Alberta community included in the report, with the starting price for a two-bedroom condominium there listed at $270,000.
The least expensive waterfront properties in Canada were on Newfoundland’s east coast, with the starting price for a three-bedroom home there $105,000.
The other most expensive included Vernon ($1.15 million), Tofino ($875,000), Salt Spring Island ($750,000 to $800,000), Fraser Valley ($800,000) and Okanagan Valley ($800,000), all of which are in B.C.
The report noted that sales of recreational property have increased in nearly 80 per cent of the areas considered, with prices going up in 43 per cent.
It added that few Americans are now buying recreational properties in Canada. Instead, discounted homes in the southern states are drawing purchasers from Canada.
Sunday, January 3, 2010
2009 Comments
It is now the end of 2009 and I thought I would make a comment on the real estate market in Red Deer. 2009 has been a very funny year with lot's of change. I believe most people thought the year would be another tough year and in the first half of the year that was correct in my opinion. The majority of my business was under $325,000.00 and by the end of the year we saw price increases in this part of the market. We also saw inventories decrease which is a great signal for 2010. I do not believe we saw much change in the market in the higher priced homes. It is my opinion that the first half of 2010 will see strong sales and some price increases. The back half of the year could be interesting based on inflation, where mortgage rate go, and any government changes to down payments and amortization periods.Thank you for reading and your e-mails and I look forward to 2010.
Subscribe to:
Posts (Atom)
