CANADIAN HOME PRICES IN JULY 2013

The Globe and Mail report says, that home prices in Canada increased in July, reaching a record high, but the slower monthly growth in prices hints at the possibility of the housing market, presently at a strong point, may once again be cooling. This was revealed  through analytics on the Teranet-National Bank Composite House Price Index. The metric is a measurement of price changes for repeat sales of single-family residences, and for July, prices increased 0.7 percent from the month of June. This represented the fifth monthly increase in a row and a higher increase than in June from May, but was modest in comparison to the gains made in previous months. Year-over-year, the index is up by just 1.9 percent from July 2012 numbers. The statistics above are congruent with previously released analytics that suggest Canada’s housing market has indeed recovered after the launch of more stringent mortgage policies in July of last year.  A few economists are still forecasting a burst of the housing bubble akin to that in the U.S., but a rally in sales in the spring months point to what can be called a “soft landing” in analyst parlance. Canada Mortgage and Housing Corp. said in July that, because of the weakness during the first half of this year, it forecasts about 448,900 sales of existing homes during 2013, down from 453,372 last year. But it expects sales to rise to about 467,600 units next year, with prices growing at roughly the same rate as inflation. Royal Bank of Canada economist Robert Hogue said the next major test the market now faces will be in late 2014, when interest rates will likely rise at the same time as a large number of newly built condos come on stream. While the market appears to be on a modest upward trajectory for the moment, there are some factors that could weigh on it this year. Mortgage rates are likely to trend up. The job market could continue to be worse than expected. And CMHC says that “lower population growth among the 25-to-34-year age group … will moderate growth in the pool of first-time home buyers.” “Higher mortgage rates of late have led to some erosion in affordability,” Toronto-Dominion Bank economist Sonya Gulati wrote in a research note. “This should keep a lid on sales growth in the second half of the year, but positive annual sales gains are slated for 2014.”There also remains the possibility that if the market shows too much of a resurgence, the government will act to rein it in again. “Sales dropped sharply in August last year, so we may see some year-over-year increases in sales and average prices next month that would reflect weakness in the rear view mirror,” said Gregory Klump, chief economist of the Canadian Real Estate Association. “Canadian home sales have staged a bit of a recovery in recent months after having declined in the wake of tightened mortgage rules and lending guidelines last year, but the numbers for July suggest that national activity is levelling off at what might best be described as average levels.” Home sales in the first seven months of this year are 4.6 per cent below the first seven months of 2012. The average selling price of existing homes in July was $382,373, up 8.4 per cent from a year earlier. CREA said much of that is because of the resurgence in Vancouver and Toronto, which tend to be pricier markets. The MLS Home Price Index, which attempts to adjust for any change in the type or location of homes that are selling, was up 2.7 per cent. That’s a slightly faster pace than the 2.3-per-cent annual increase in June. “A tightening [though not yet tight] market balance has put a floor under average prices, with 23 of 26 cities posting gains in the past year,” Bank of Montreal economist Robert Kavcic wrote in a research note. Calgary, Winnipeg and Edmonton were among other markets that saw significant year-over-year sales increases last month, while Ottawa, Halifax and Montreal posted declines.

TORONTO REAL ESTATE IN 2012

      Toronto and Canada's housing market will remain stable for at least two more years,  predicted Canada Mortgage and Housing Corp., with the expected slow growth in the economy keeping house prices in check.
      With the Canadian economy set to expand at a moderate pace and mortgage rates expected to remain low, activity levels in 2012 in both new home construction and sales of existing Toronto homes will stay close to levels seen in 2011.
       Mortgage rates will remain flat through most of 2012, CMHC predicts, and start increasing moderately in late 2012 or early 2013.
       Housing starts are expected to be around 190,000 units this year and 193,800 units in 2013, the CMHC also predicted.
       Over 2012, CMHC expects Canada's six eastern provinces will see a contraction in housing starts. By 2013, however, modest growth will return to Quebec and Ontario, they say.
       Around 457,300 existing homes are expected to change hands in 2012, moving a little higher in 2013 to 468,200 units.

Toronto real estate. JULY RESALE MARKET

     Greater Toronto REALTORS® reported 7,922 transactions through the TorontoMLS® system in July 2011, representing a 23% increase over July 2010. Total sales through the first seven months of this year amounted to 55,863 – down by 1.3% compared to the same period in 2010. After adjusting for seasonal fluctuations, the July figure continued to point to an annual sales result close to 90,000 – in line with results from the previous six months.
      “Strong home sales continued in July, with a substantial rebound over last summer’s slow-down brought about by higher mortgage rates, new lending guidelines and misconceptions about the HST. The greatest rebound was seen in the condominium apartment segment in the City of Toronto,” said Toronto Real Estate Board President Richard Silver. “If the current pace of sales holds up, we could see the second best year on record under the current TREB market area.”
      The average selling price in July was $459,122 – up by almost ten % compared to the July 2010 average of $418,675.
      “Tight market conditions have boosted the annual rate of price growth this year. However, the listings situation is starting to improve. A better supplied market later this year and into 2012 would lead to a more sustainable rate of price growth,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

       Competition from the resale market has impacted demand for new homes, comments the Canada Mortgage and Housing Corporation. With sales of newly built contemporary homes potentially suffering, the 0.3% reduction is hoped to increase interest from buyers and overseas investors.
       Despite worries that the US economic downturn may impact sales, however, there is still overall confidence in the Canadian housing market. A study from the Real Property Association of Canada, revealed yesterday in the Canadian Real Estate Magazine, has found that the country's property market is still growing, and has been for the last eight quarters.
       “The market is largely viewed as stable and attractive, which bodes well for future investment and development,” says the report.

Toronto real estate. TORONTO REAL ESTATE MARKET UPDATE

Record breaking warm temperatures in March helped bring out buyers during the first two weeks of the month.

The Toronto Real Estate Board reported 4,353 existing home sales, up 70 per cent from the same time last year, when the market was in recession.

But sales were also strong enough to break the mid-month peak set in March of 2006 by 16 per cent, according to the board.

“The spring-like weather in the first half of March brought the first green sprouts of the recurring spring market,” said board president Tom Lebour.

The average price for March mid-month transactions was $440,153, up 20 per cent over last year.

Some good news for buyers was that new listings improved by 34 per cent over last year.

“Look for double digit price increases to cease later in 2010, as new listings rebound from the low levels experienced in 2009,” said Jason Mercer, TREB’s senior manager of market analysis. “Increased listings will give buyers more choice, resulting in less upward pressure on home prices.”

If you want to know more about Toronto real estate, call sales representative and mortgage agent Alexandre (Alex) Malkhassiants, Right at Home Realty,  with all your questions: (416) 723-9383 (cell).

Toronto real estate. Healthy Toronto housing market seen in 2010

Toronto's housing market will stay healthy next year as new home groundbreakings in Canada's most populous city jump even as existing home sales cool, said the Canada Mortgage and Housing Corp.

The federal government agency expects a 26-percent rise in housing starts next year to 36,140 units.

But existing home sales are expected to dip to 78,000 in 2010 from 82,000 this year. Still, CMHC expects average prices to rise by 5 percent, which is in line with the annual average for this decade.

The agency said that while overall demand for home ownership is expected to moderate next year, households with stable employment will take advantage of improved affordability.

Housing has been a rare bright spot as the Canadian economy struggles to emerge from recession. Toronto has seen an upswing in housing activity in recent months, helped by low mortgage rates.

The Bank of Canada cut interest rates to a record low this year and conditionally pledged to keep them there until at least the end of the first half of 2010.