YOU'RE HOT & YOU'RE COLD!

Hot Toronto, cold Vancouver have competing effects on Canadian housing market
By Sunny Freeman
CANADIAN PRESS May 15, 2012

TORONTO – The Canadian housing market gained momentum in April as strong sales in the Toronto offset weakness in Vancouver, the Canadian Real Estate Association said Tuesday.

April seasonally adjusted home sales on CREA’s Multiple Listing Service gained 0.8 per cent compared with March.

On a year-over-year basis, the association said there were 49,480 homes sold in April, up 11.5 per cent from 44,370 a year ago, when sales slowed following a tightening of mortgage lending rules including the elimination of 35-year amortizations came into effect in March 2011.

Two of Canada’s largest markets are having opposite effects on the national average, with slowing sales and falling prices in Vancouver dragging, and soaring sales and prices in Toronto exerting upward pressure.

The average home price in Canada in April was up 0.9 per cent from a year ago at $375,810.

“It bears repeating that the national average price was skewed higher last spring by record level high-end home sales in Vancouver’s priciest neighbourhoods, and that a replay of this phenomenon was not expected this year,” said Gregory Klump, CREA’s chief economist.

The average selling price in Vancouver was down 9.8 per cent compared with a year ago at $735,315, while the average price in Toronto was up 8.4 per cent at $517,556. April sales in Vancouver slid 13.2 per cent while Toronto sales picked up 14.5 per cent compared to a year ago.

“Trends in Vancouver and Toronto continue to diverge. These two housing markets have an obvious influence on national statistics and a high profile, but Canada is a big place,” said Wayne Moen, CREA President.

Excluding Toronto and Vancouver, the average price in Canada was up 3.1 per cent from a year ago.

Gains in Montreal, Winnipeg, Edmonton, as well as London and St. Thomas, Ont., also contributed to the increased sales, offsetting declines in Ottawa, Windsor-Essex, Quebec City, the Fraser Valley, and Vancouver.

Continued strength in the housing market, largely due to the staying power of low interest rates, has led some economists to warn the market is overvalued. That could make homeowners vulnerable to a downturn, especially those who have used low interest rates to borrow more than they could otherwise afford.

TD Bank estimates Canadian home prices are 10 to 15 per cent overvalued, with the excess most evident in Toronto and Vancouver, said TD economist Diana Petramala.

“With mortgage rates still at rock bottom through the early part of this year and job creation heating up through March and April, it’s not that surprising to see continued growth in Canadian home sales,” she said.

“Still, growth in home prices and sales will likely be limited as the overvaluation has led to a deterioration in affordability. Overall, we anticipate the Canadian housing market to remain relatively flat in the coming year with home prices to rise just another two per cent this year, following gains of seven per cent in each of the last two years.”

The number of newly listed homes pared back 0.2 per cent from March to April, which, combined with slightly higher sales resulted in a tighter national housing market, but remains firmly entrenched in balanced market territory,” CREA said in a release.

A total of 157,804 homes have traded hands so far this year, up 6.4 per cent from levels reported in the first four months of 2011.

That’s also about four per cent higher than both the five- and 10-year averages for sales during the first third of the year.

Sales on CREA’s Multiple Listing Service was either up or held steady in half of all local markets, with Toronto and Calgary posting the biggest monthly increases for the second consecutive month.

Toronto home sales in 2012 have been particularly strong, up 9.5 per cent from year ago levels at 31,639 homes sold so far this year. But sales in Vancouver, a market that was bustling with high-end home purchases last year, are down 19.9 per cent so far this year at 9,935 homes sold.

“While these two cities are garnering most of the attention, Calgary is quietly becoming a market to watch,” said BMO economist Robert Kavcic, adding that sales in the city jumped 30 per cent year-over-year in April.

“If oil prices remain high enough to continue supporting strong economic growth and migration flows, Calgary could again become Canada’s real estate hot spot in short order.”

SOARING IN APRIL

Calgary’s housing market soars in April
MLS sales up 26% from a year ago
By Mario Toneguzzi
Calgary Herald May 1, 2012

CALGARY — It was a very busy April for Calgary’s housing market.

According to the Calgary Real Estate Board, overall residential MLS sales in the city of 2,200 for the month were up 26.07 per cent from April 2011 and the average sale price of $429,388 increased by 1.95 per cent from last year.

Carrie Pepper was one of the many caught up in the April activity as she bought a condo in the Thorncliffe-Greenview neighbourhood.

“I wasn’t even planning on buying. I was looking for two months maybe. I found a lot of places that were good prices,” said Pepper who looked at about 10 properties.

“I didn’t want to rent because it’s so expensive. So why not buy?”

She said continued low interest rates played a role in her decision.

“That was huge. This is my first time buying. I know it’s a good time to buy right now,” added Pepper.

Apparently many others felt the same as Pepper.

In the single-family home category, CREB said sales of 1,582 were up 30.64 per cent from last year and the average sale price rose by 0.88 per cent to $483,519.

In the condo apartment category, there were 351 MLS sales, up 13.23 per cent from last year but the average sale price dipped by 5.76 per cent to $267,931.

And in the condo townhouse category, sales rose by 19.20 per cent to 267 with the average sale price increasing by 8.31 per cent to $320,912.

“What we saw in April was strong demand coupled with less good inventory. We also saw lots of multiple offers,” said Cody Battershill, a realtor in Calgary with RE/MAX House of Real Estate.

"I think that everyone’s realizing the world didn’t end and in fact on most metrics we are back to or stronger than most of the previous peaks achieved in the last cycle. Some people think we could be at the beginning of another strong positive economic cycle while others would still encourage cautious optimism. Regardless, living in Calgary means enjoying high economic growth, job growth, income growth and migration.”

He said the economic fundamentals in Calgary are strong and will be for the foreseeable future.

Ann-Marie Lurie, CREB’s chief economist, said the growth in full-time employment, combined with improving migration levels, is translating into improved demand for housing.

“While sales growth does seem exceptionally strong, it is important to keep in perspective that the sales activity in Calgary is returning to levels more consistent with the long-term average,” she said.

CREB said its MLS Home Price Index benchmark price for single-family homes was $449,500 in April, up 7.41 per cent from a year ago. The benchmark price for condo apartments was up 0.77 per cent to $248,300 and it rose by 4.58 per cent in the condo townhouse category to $294,500.

CREB says its new home price index measures how typical properties are valued in the market rather than relying on average and median prices.

It is calculated using a statistical model that estimates prices based on several factors.

In the city, total new listings in the MLS market dipped by 0.49 per cent in April to 3,238 and active listings were off by 16.67 per cent to 5,270.

“While sales activity and the level of new listings continue to remain below long-term trends, the spring market is definitely on the rise over the previous year,” said Bob Jablonski, CREB’s president. “As confidence in the local housing market continues to build, we anticipate a rise in demand, followed by improved listings from those waiting to see some price appreciation prior to listing their home.”

BLOOM & BOOM

Calgary housing market booming
Calgary Herald April 23, 2012

Just over three weeks into April and it appears Calgary’s housing market has seen a resurgence of activity this spring.

A boom perhaps?

According to the Calgary Real Estate Board, MLS sales in all housing categories are noticeably up compared with last year.

From April 1-22, single-family sales of 1,108 transactions are up 26.05 per cent from the same period a year ago but the average sale price has dipped by 0.43 per cent to $481,423.

The condo apartment category has seen sales grow year-over-year by 14.91 per cent to 262 units while the average price has dropped by 2.83 per cent to $269,046.

And in the condo townhouse sector, sales of 198 are up 15.79 per cent from last year and the average price has risen by 6.46 per cent to $319,140.