Comments Off

Stable national real estate market forecast to endure

- Housing market sees bounce back from 'awful winter' - Royal LePage
    revises forecast to the positive -

    TORONTO, July 7 /CNW/ - 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 $236,612 (-4.0 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 following annual
change of prices for key housing segments in select national markets:

    -------------------------------------------------------------------------
                             Detached Bungalows
    -------------------------------------------------------------------------
                          Q2 2009     Last Quarter      Q2 2008    Bungalow %
      Market              Average        Average        Average      Change
    -------------------------------------------------------------------------
    Halifax               235,333        215,667        233,000          1.0%
    -------------------------------------------------------------------------
    Charlottetown         160,000        157,000        156,000          2.6%
    -------------------------------------------------------------------------
    Moncton               158,000        156,000        164,000         -3.7%
    -------------------------------------------------------------------------
    Fredericton           172,000        167,000        162,000          6.2%
    -------------------------------------------------------------------------
    Saint John            187,681        201,476        202,364         -7.3%
    -------------------------------------------------------------------------
    St. John's            200,000        193,000        181,000         10.5%
    -------------------------------------------------------------------------
    Atlantic              198,368        190,748        192,636          3.0%
    -------------------------------------------------------------------------
    Montreal              236,148        232,375        234,352          0.8%
    -------------------------------------------------------------------------
    Ottawa                325,417        317,500        316,167          2.9%
    -------------------------------------------------------------------------
    Toronto               416,179        405,286        434,282         -4.2%
    -------------------------------------------------------------------------
    Winnipeg              237,750        231,663        233,800          1.7%
    -------------------------------------------------------------------------
    Regina                272,900        266,625        278,850         -2.1%
    -------------------------------------------------------------------------
    Saskatoon             312,250        312,500        340,375         -8.3%
    -------------------------------------------------------------------------
    Calgary               401,600        391,833        438,122         -8.3%
    -------------------------------------------------------------------------
    Edmonton              302,143        297,857        320,000         -5.6%
    -------------------------------------------------------------------------
    Vancouver             760,000        743,750        839,500         -9.5%
    -------------------------------------------------------------------------
    Victoria              466,000        453,000        450,000          3.6%
    -------------------------------------------------------------------------
    National              327,964        319,865        339,879         -3.5%
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                             Standard Two Storey
    -------------------------------------------------------------------------
                          Q2 2009     Last Quarter      Q2 2008    2 Storey %
      Market              Average        Average        Average      Change
    -------------------------------------------------------------------------
    Halifax               277,333        262,333        275,000          0.8%
    -------------------------------------------------------------------------
    Charlottetown         190,000        188,000        185,000          2.7%
    -------------------------------------------------------------------------
    Moncton               134,200        134,500        132,000          1.7%
    -------------------------------------------------------------------------
    Fredericton           210,000        210,000        197,000          6.6%
    -------------------------------------------------------------------------
    Saint John            240,889        268,000        285,179        -15.5%
    -------------------------------------------------------------------------
    St. John's            276,000        267,000        249,333         10.7%
    -------------------------------------------------------------------------
    Atlantic              198,368        190,748        192,636          3.0%
    -------------------------------------------------------------------------
    Montreal              337,872        330,056        336,443          0.4%
    -------------------------------------------------------------------------
    Ottawa                325,417        318,500        315,750          3.1%
    -------------------------------------------------------------------------
    Toronto               544,785        516,052        562,478         -3.1%
    -------------------------------------------------------------------------
    Winnipeg              262,914        251,721        257,800          2.0%
    -------------------------------------------------------------------------
    Regina                245,000        245,000        254,000         -3.5%
    -------------------------------------------------------------------------
    Saskatoon             337,250        348,500        388,000        -13.1%
    -------------------------------------------------------------------------
    Calgary               400,167        390,689        437,744         -8.6%
    -------------------------------------------------------------------------
    Edmonton              328,571        322,979        348,571         -5.7%
    -------------------------------------------------------------------------
    Vancouver             846,000        828,750        943,000        -10.3%
    -------------------------------------------------------------------------
    Victoria              446,000        435,000        470,000         -5.1%
    -------------------------------------------------------------------------
    National              392,378        379,708        407,374         -3.7%
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                            Standard Condominium
    -------------------------------------------------------------------------
                          Q2 2009     Last Quarter      Q2 2008       Condo %
      Market              Average        Average        Average       Change
    -------------------------------------------------------------------------
    Halifax               164,000        162,000        154,500          6.1%
    -------------------------------------------------------------------------
    Charlottetown         120,000        120,000        120,000          0.0%
    -------------------------------------------------------------------------
    Moncton                   n/a            n/a            n/a          n/a
    -------------------------------------------------------------------------
    Fredericton           140,000        137,000        126,000         11.1%
    -------------------------------------------------------------------------
    Saint John            126,000        181,387        119,191          5.7%
    -------------------------------------------------------------------------
    St. John's            215,333        205,667        193,333         11.4%
    -------------------------------------------------------------------------
    Atlantic              174,623        172,423        156,774         11.4%
    -------------------------------------------------------------------------
    Montreal              209,311        206,528        204,942          2.1%
    -------------------------------------------------------------------------
    Ottawa                212,750        207,833        203,667          4.5%
    -------------------------------------------------------------------------
    Toronto               296,039        289,397        311,026         -4.8%
    -------------------------------------------------------------------------
    Winnipeg              143,700        145,943        144,614         -0.6%
    -------------------------------------------------------------------------
    Regina                180,375        168,806        190,000         -5.1%
    -------------------------------------------------------------------------
    Saskatoon             202,500        187,000        236,000        -14.2%
    -------------------------------------------------------------------------
    Calgary               252,344        245,756        285,033        -11.5%
    -------------------------------------------------------------------------
    Edmonton              203,833        199,167        226,000         -9.8%
    -------------------------------------------------------------------------
    Vancouver             424,000        406,500        450,750         -5.9%
    -------------------------------------------------------------------------
    Victoria              275,000        260,000        295,000         -6.8%
    -------------------------------------------------------------------------
    National              236,612        231,526        246,490         -4.0%
    -------------------------------------------------------------------------

    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://newswire.ca/fr/releases/archive/July2009/07/c4373.html

reviewed by Moishe Alexander, CFC CEO

Comments Off

Royal Lepage First Time Home Buyers Report: “AFFORDABILITY AND JOB SECURITY MOST IMPORTANT FACTORS FOR FIRST TIME HOMEBUYERS”

Canadians who are considering purchasing their first home are primarily motivated by lower home prices and very low interest rates, but some require confidence in the economy and their employment prospects before they will enter the market, according to a report released today by Royal LePage Real Estate Services. Eighty-six per cent of potential first-time buyers say low interest rates make them more likely to purchase a home; 81 per cent cite lower housing prices as a motivating factor; while 76 per cent cite job security and 64 per cent say a stable economy is an important factor in their decision to buy.

Potential buyers were asked to rank their top incentives for purchasing a first property. While home prices and interest rates took the number one and two rankings, respectively, the third most popular incentive was the First-Time Home Buyers’ Tax Credit. The recently introduced Home Renovation Tax Credit for 2009 was cited by 42 per cent of potential first-time buyers as either ‘very likely’ or ‘somewhat likely’ to impact their purchasing decision.

“When first time buyers stepped out of the market in the fourth quarter of 2008, at the height of the global recession, their absence was profoundly felt.  Without significant volumes of entry-level homes trading hands, the entire market limped through the winter months.   First time buyers are back in force this spring, and with them the beginnings of a market recovery.  While these consumers appreciate government incentives such as tax credits, greater RSP deduction limits and rebates on home renovations, it is markedly improved affordability that is proving to be the powerful drawing card,” said Phil Soper, president and chief executive of Royal LePage Real Estate Services. “Our survey demonstrates how important affordability factors such as interest rates and house prices are in stimulating demand.”

Across the country, potential first-time homebuyers agreed that affordability was their top consideration, however the survey also revealed differences amongst buyers in various regions of Canada. In provinces such as British Columbia where high housing prices have kept some buyers out of the market in recent years, 92 per cent of potential first-time buyers are now motivated by low interest rates and 96 per cent say lower home prices are likely to prompt them to buy.

In Atlantic Canada, where local economies have been resilient in the face of a worldwide recession and housing markets remain stable, 43 per cent of first-time buyers say they that job security is a factor in their decision to buy, while 84 per cent of buyers in British Columbia and Alberta said job security will influence them.

Atlantic Canadians were less motivated than other Canadians by declining interest rates, with only 72 per cent saying it will likely prompt a buying decision, compared to 86 per cent of Canadians overall. Buyers in Ontario and Quebec rated the Home Renovation Tax Credit as a bigger factor in their buying decision, compared to the Canadian average.

Mr Soper continued, “The significant response differences from region to region show how closely the residential real estate market is tied to broader economic trends and consumer confidence. Buying your first home is a major life decision, and people are more likely to purchase a home if they feel comfortable about the state of the economy and confident that they will have a job to support their new mortgage obligation.”

Top Incentives for First-Time Buyers across Canada
Potential first-time buyers were asked to choose their number one incentive for purchasing a first property. The table shows the percentage of respondents who selected each factor as their top incentive.

REGIONAL SUMMARIES

Atlantic
Overall activity in the housing market has remained steady in the Atlantic region with first-time homebuyers continuing to enter the market.  Low interest rates and recent government incentives, such as the Home Renovation Tax Credit, greater RSP deduction limits and the First-Time Homebuyer’s Tax Credit speak to affordability.  Buyers in this area are entering the market that would not have a few years ago, due to these influencing factors. Entry-level buyers in Newfoundland, Prince Edward Island, New Brunswick and Nova Scotia continue to search for detached bungalows, with the average price ranging from $157,000 in Charlottetown to $215,667 in Halifax during the first quarter of 2009.

Quebec
First-time buyers continue to pursue the dream of home ownership in Montreal, as the number of entrants to the housing market has remained relatively stable. Low interest rates are contributing to increased market entry with 41 per cent of first-time buyers suggesting this is the key incentive driving the purchase of their first property, followed by 13 per cent who suggest lower housing prices might influence their buying decision. With 47 per cent of new buyers in Quebec planning to settle in urban areas, buyers are planning to invest and live in their first home for ten or more years.  Fifty-six per cent of first-time buyers hope to purchase a property in the $150,000 to $300,000 price range.

Ontario
Encouraged by recent government initiatives, home ownership in Ontario is becoming a reality for an increasing number of younger purchasers.  Across Ontario, 36 per cent of potential first-time buyers are most likely to purchase property in an urban setting.  Condominiums continue to attract first-time buyers in the Greater Toronto Area with urban communities at accessible price points appealing most to market newcomers. In addition to affordability, location is a leading factor dictating condominium appeal. Neighbourhoods in Toronto’s east and west downtown core are popular with first-time buyers. In Ottawa, affordability continues to drive activity and most first-time buyers are opting to purchase in suburban areas where properties typically cost $50,000 to $75,000 less than in the city centre. Active first-time buyer markets include Orleans, Barrhaven and Kanata.

Manitoba & Saskatchewan
Thirty per cent of Prairie buyers planning on purchasing their first home in the next three years will choose a detached bungalow. The second-most popular choice for first-time buyers is condominiums at 21 per cent, followed by detached two-story homes at 15 per cent. In Winnipeg, up-and-coming neighbourhoods for first-time buyers include River Heights – which has traditionally been attractive for people entering the market – Fraser’s Grove and East / North Caldonin. With a good selection of older bungalows and two story homes, Broders Annex is the hottest neighbourhood for first-time buyers in Regina.

Alberta
Alberta’s urban centres continue to be popular with first-time buyers, who make up nearly a third of home sales in both Calgary and Edmonton. Condominiums and detached bungalows are the most popular choices for first-time buyers in Edmonton, where lower housing prices and low interest rates are the biggest incentives for buyers entering the market for the first time. Popular areas for new buyers include the suburbs, where a new condominium may be within budget, the university area, where many parents are buying for their kids, Allendale and McKernan. In Calgary, new buyers are most interested in inner city condominiums and detached houses in the suburbs, with many seeking new or renovated homes.

British Columbia
With home prices either flat or declining in many communities in British Columbia and with interest rates at record lows, first-time buyers are taking advantage of greater affordability, with female buyers leading the trend. Sixty per cent of the buyers getting into BC’s housing market for the first time are women. In British Columbia, 40 per cent of prospective first-time buyers intend to purchase a ‘fixer-upper’ while 80 per cent would take advantage of the Federal Government’s Home Renovation Tax Credit in making upgrades to a home. First-time buyers in Vancouver are favouring condominiums and townhomes, however an increasing number of entry-level buyers are finding affordable detached homes outside the city in the Fraser Valley suburbs.

The survey portion of the Royal LePage First-Time Homebuyers’ Report was conducted by Pollara from April 29, 2009 to May 8, 2009 among 474 first-time homebuyers in Canada. The online survey was conducted among a randomly-selected sample of 474 adult Canadians who are likely to purchase their first home in the next 3 years.  A probability sample of this size with a 100% response rate would have an estimated margin of error of +/- 4.5 %, 19 times out of 20. The data was statistically weighted to ensure the sample’s regional and age/gender composition reflects the actual Canadian population according to the most recent Census data.

http://torontorealestatetrends.com/royal-lepage-first-time-home-buyers-report/

reported by Moishe Alexander, CFC CEO

Comments Off

Luxury Homes Sales Rebound May 2009 strongest month on record for luxury home sales, says Moishe Alexander

Sales of luxury properties in the Greater Toronto Area posted their strongest performance on record in May 2009, according to RE/MAX Ontario-Atlantic Canada.

Two hundred and seventy-three high-end homes changed hands in May 2009, up six per cent from 258 reported during the same period one year earlier, and the highest number of sales over $1 million in a one-month period in the history of the Toronto Real Estate Board. The previous record was set in May of 2007 at 266 sales.

“Confidence is slowly returning to the marketplace,” says Michael Polzler, Executive Vice President, Regional Director, RE/MAX Ontario-Atlantic Canada. “Traditional market indicators are in place – the stock market has made tremendous gains in recent months, crude values have risen significantly, and the Canadian dollar has gained almost 10 points in the past month. Combine these influences with pent-up demand and growing economic stability and you have the ingredients for solid sales in the top-end of the market.”

Further evidence of a rebound is the recent sale of a Bridle Path home priced at over $13 million, the first sale over the $10 million price point in more than a year. The 18,000 sq. ft. gated estate, situated on more than two acres, was listed by Barry Cohen, Broker, RE/MAX Realtron, and featured a spectacular backyard with a negative edge waterfall pool, fountains, hot tub, and tennis court.

Demand for homes priced in excess of $1 million has increased steadily since the beginning of the year, says Polzler, mimicking the overall real estate market. Seven hundred homes have changed hands year-to-date, compared to 944 in January to May of 2008. Given current momentum, however, it’s likely that activity will continue at a healthy pace for the remainder of the year – with sales at year-end at least on par or ahead of 2008 levels.

RE/MAX is Canada’s leading real estate organization with over 17,600 sales associates situated throughout its more than 677 independently-owned and operated offices across the country. The RE/MAX franchise network, now in its 36th year, is a global real estate system operating in more than 70 countries. Over 6,700 independently-owned offices engage nearly 100,000 member sales associates who lead the industry in professional designations, experience and production while providing real estate services in residential, commercial, referral, and asset management.

http://eleganthomesinwesttoronto.blogspot.com/2009/06/luxury-homes-sales-rebound.html