The Canadian housing market appears to be picking up steam, as prices climbed an average of 4.2% across Canada in June, according to the Canadian Real Estate Association (CREA). However, some areas are struggling. Click the arrows to find out which markets have been left behind as prices rise.

Having decided Canada would not face the same scenario in the real estate market as the United States there was still speculation late last year about supposed free-falling property prices, fuelled by market trends in British Columbia and Alberta where rapid price increases and speculation had been prevalent. Based on current statistics there is now an emerging body of evidence that the Southern Central Ontario real estate marketplace is seeing what is best described as a “market adjustment” resulting in a soft landing and not the crash that much of the media projected.

In our local area, residential resale activity for June is up on the same month last year. In Oakville, by 18% and the ever
expanding Milton by 34%. Current data would suggest little movement up or down in average sales prices with Oakville
down 1% and Milton up 2% on last June.

The median sale price. which is the midpoint of all sales, in Oakville for the first six months of this year is $418,000 down
just 2% from the same period last year and in Milton at $325,000 is down only 1%. With the number of new listings also down, year to date and June statistics showing signs of pent up demand resulting in higher sales we could be moving back to a sellers market. Many of the economical problems facing home buyers today have been offset by lower mortgage rates and a stable market place.

There are signs that we may be recovering from the first recession since 1992. Buyers, Sellers and REALTORS® will certainly find this scenario much less stressful.Taking the stress out of buying and selling is our day to dayactivity.

If you are considering either buying or selling now could be one of the best times to be reviewing your options while the market is stable. Preparation is a key part of the process.

http://valeriepeebles.com/better-signs-in-the-market/

reviewed by Moishe Alexander, CFC canadian funding corp CEO

Tight conditions in the mortgage world should normally mean lower rates, since banks would have to lower rates in order to attract customers with good credit ratings. But it sems that banks are actually raising rates, in the hope that will improve their revenue.

Under other circumstances, this would seem like a bad choice since the usual route to increased earnings is to lower prices. This shortsightedness is not limited to the home loan industry; credit card companies are doubling and even tripling their rates in reacton to defaults on the part of customers in this depressed economic environment.

It used to be that when the economy slowed down, banks would lower their interest rates and this would give an incentive to borrowers. But with the lending industry in turmoil, it seems like none of the old rules count.

So what is the solution for a potential homebuyer with the right credit score to borrow? Wait for this phase to pass and for rates to come down or grab a loan now, while there is still some credit around, or wait for the fallout from the recession?

Not only is there a current, there are many who even believe there is a depression coming, which will surely lead to deflation. Normally, deflation will in turn lead to lower interest rates, so this indicates a wait and see attitude is the best to take right now.

Some lenders are still actively seeking borrowers. Many small lenders never had the capital to delve into the giant home loan programs that many of the larger banks did. In this case, being small was an advantage, since many of them were insulated from the problems now haunting most of the credit industry.

A second good argument for waiting is that home prices continue to plummet, with predictions of futher price cuts of as much as 35%, even after the 20 to 25% decreases already seen. The Case-Schiller study published in November of 2008 reported year on year decreases of 17% nationally, with 25% in some areas. If the scenario is set not only for decreased rates, but also for lower home prices, it would seem wise to wait until more of the credit crisis fallout can be judged.

http://www.classic-realestate.com/term-life-insurance-canada-the-news-in-the-interest-rate-world.html

reviewed by Moishe Alexander, CFC canadian funding corp CEO

In Ottawa, housing sales jumped 12.5% in June to 1,895, also a new record for the month.
The average sale price in the GTA last month $403,972, up 2% from a year earlier. In Ottawa, the average sale price rose 3% annually to $306,925.

“I think the next stage” might be price pressure, said Doug Porter, deputy chief economist at BMO Capital Markets. “The moderation we have seen in prices may not last long if this kind of sales and listing balance remains in place.”

Porter said the mad scramble to buy a house is playing out across the country, as consumers wade back into the market tempted by interest rates the lowest they’ve been in 50 years.
Five-year fixed rate mortgages were as low as 3.75% last month, though they’ve nudged back up to about 4.5% since.

“Vancouver sales were up about 76% from a year ago, the second best June ever for them. Calgary sales were up 27%, and Edmonton sales were up 38%,” said the economist. “A lot of people emerged from their foxholes over the winter and have been brought in by low mortgage rates or a belief the economy is going to improve.

“There was some pent-up demand, things almost froze over solid over the winter.”

http://ontariomortgageinfo.blogspot.com/2009/07/housing-sales-soar-in-ontarios-biggest.html

brought by Moishe Alexander, CFC canadian funding corp CEO

Property experts say first-time buyers and Bank of Canada rate cuts have helped restore stability to a market that slumped from late 2008 to early this year, when the worst leg of the global financial crisis battered consumer confidence.

“We should be less fearful than we were six months ago, but I don’t think we should be exuberant yet. The resale markets in Canada are very strong. May numbers were pretty good, and June numbers will be even better,” said Will Dunning, an economic consultant who specializes in the housing market.

“But by July and into the fall there will be an offset of considerably slower activity. I don’t think it’s likely to go off a cliff. It’ll depend on what happens in employment and the broader economy, and how that affects confidence.”

Recent data suggest Canada’s residential property market, which weathered the financial crisis much better than its hard-hit U.S. counterpart, has been thawing for several months.

The latest Canadian Real Estate Association data shows May resale home prices rose 0.4 per cent to $319,757, topping the previous record set a year earlier. It was the first year-over-year increase since May last year. And sales activity climbed for a fourth straight month.

The industry group, which represents more than 97,000 real estate brokers and agents, also cut its forecast for a drop in home prices this year and said it expected sales activity to trend higher.

Meanwhile, Canada Mortgage and Housing Corp., the national housing agency, forecast in its second-quarter outlook that new home construction is expected to decline to 141,900 units in 2009 but rebound next year.

“ Stability is something you can’t overemphasize”

Still, no one predicts the residential property market is headed back to the heady times seen between 2002 and 2007, when prices surged and outpaced income growth. In some cities, such as Vancouver and Calgary, home prices doubled and are now going through a sharp correction.

A “stable but unremarkable” period for the real estate market is expected this year, said Philip Soper, chief executive officer of Brookfield Real Estate Services, an arm of Canadian property giant Brookfield Properties Corp that holds real estate broker brand Royal LePage.

“Stability is something you can’t overemphasize in terms of its importance for the housing market right now.”

Unless the global financial system succumbs to another crisis, analysts expect the Canadian home market is likely to stabilize further.

Activity from first-time buyers appears to be providing support because of stimulative measures by the federal government that allow these buyers to defray closing costs and withdraw more from retirement funds.

The Bank of Canada has also pledged to keep interest rates near zero until mid-2010, which could underpin confidence.

But the economy is still on shaky ground, contracting for the ninth straight month in April. And the unemployment rate spiked to an 11-year high in May, boosted by layoffs in the factories of Ontario.

Experts warn that further job losses in pockets of Canada’s export-oriented economy could slow the momentum that has been gathering in the housing sector.

“We don’t expect the recession to end until the fall. It’s clear that the spring fling in housing markets, this remarkable surge in resales and prices, has been driven by record low mortgage rates,” said Sal Guatieri, senior economist at BMO Capital Markets.

These record low rates, whether variable or fixed, had increased affordability for many buyers. But weakness in the bond market, caused in part by reduced investor demand for safe-haven assets, has pushed mortgage rates higher.

The posted rate on a five-year mortgage at Royal Bank of Canada, the country’s largest lender, has risen to 5.85 per cent from 5.25 per cent in April.

Brookfield’s Mr. Soper has been telling his management team to prepare for softness in the housing market in the second half.

“The advice I have been giving … is to accept the recovery this spring with humility, to continue to plan for a difficult second half of the year although the comparables are going to be positive simply because the second half of 2008 was so poor,” he said in an interview.

“But at least we have a stable market and stable prices, which is something that you need to encourage consumers to trade.”

http://www.theglobeandmail.com/report-on-business/real-estate-recovery-expected-to-be-tepid/article1204023/

reviewed by Moishe Alexander, CFC CEO

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

Following gains in April, employment decreased by 42,000 in May, led by further manufacturing losses in Ontario. The unemployment rate rose by 0.4 percentage points to 8.4%, the highest rate in 11 years. Since the employment peak of last October, employment has fallen by 363,000 or 2.1%.

While there were pronounced losses in Ontario in May, employment increased in Manitoba, Nova Scotia and Saskatchewan, and was little changed in all other provinces.

In addition to manufacturing losses in May, transportation and warehousing also declined. Public administration was the only industry with a notable employment increase.

Employment declines in May affected mostly men and women aged 25 to 54, while there were employment increases among women aged 55 and over.

There were large declines in full-time employment (-59,000) in May, bringing total full-time losses since October to 406,000 (-2.9%). Over the same period, part-time employment has continued to trend up, increasing by 44,000 (+1.4%).

The average hourly wage for employees was 3.4% higher in May compared with the same month a year earlier, the lowest year-over-year increase in two years.

Continued employment losses in Ontario

Ontario was the only province to experience a substantial employment decline in May, down 60,000, bringing total losses since last October to 234,000 or 3.5%. While Ontario accounts for 39% of the total working-age population, it has experienced 64% of overall employment losses since the start of the labour market downturn.

Ontario’s unemployment rate in May rose by 0.7 percentage points from the previous month to 9.4%, the highest in 15 years.

In May, both manufacturing and construction employment continued their downward trend in Ontario. Since October, the number of workers in manufacturing has fallen by 14.0%, while it has decreased by 9.3% in construction.

Employment in Quebec was unchanged in May. An increase in labour force participation pushed the unemployment rate up to 8.7%. Since last October, employment is down by 0.7% in Quebec.

Manitoba and Saskatchewan added employment in May with gains of 3,900 and 3,100 respectively. Both provinces had an unemployment rate of 4.9%, the lowest in the country, and are the only two provinces with an increase in employment since last October.

Following declines in the two previous months, employment increased by 3,600 in Nova Scotia in May.

Sharp decline in manufacturing employment

Manufacturing employment continued on its downward trend with a decline of 58,000 in May, mostly in Ontario. This brings losses since October to 186,000 or 9.4%, with the largest decline in transportation equipment manufacturing. Ontario has experienced the brunt of overall manufacturing losses over this period.

In May 2009, there were 778,000 factory workers in Ontario, the lowest level since comparable data became available in 1976. Manufacturing employment in Ontario reached a peak in November 2002 with 1,115,000 workers.

There was also a decline in transportation and warehousing (-16,000) in May, bringing total losses in that industry to 48,000 (-5.5%) since October. Public administration was the only industry with notable gains in May, up 19,000.

Self-employment fell by 32,000 in May, offsetting the gain in April. The number of private sector employees continued to decline, down 36,000 in May, while public sector employment was up 27,000, largely driven by the gains in public administration.

Since October, the number of private sector employees has fallen by 2.9% and public sector employment has declined by 1.3%. Over the same period, the number of self-employed has shown little change.

Fewer people aged 25 to 54 working

Employment fell by 50,000 in May for persons aged 25 to 54, with losses of 28,000 among men and 22,000 among women. Since the start of the labour market downturn, however, it is men in this age group who have experienced most of the losses, down 3.4%, while employment among core-age women has fallen by 1.1% over the same period.

Employment for women aged 55 and over increased in May, up 16,000. Since last October, employment among older women has risen by 3.1%, while employment for older men has shown little change.

Although employment edged down among youths aged 15 to 24 in May, losses for this group have been substantial during the current labour market downturn, with losses since last October totalling 134,000 or 5.1%. In May, the unemployment rate for youths climbed to 14.9%, the highest rate since 1999.

A difficult start to the summer for students aged 20 to 24

From May to August, the Labour Force Survey collects labour market information about young people aged 15 to 24 who were attending school full-time in March and who intend to return to school in the fall. The May survey results provide the first indicators of the summer job market, especially for students aged 20 to 24, as students aged 15 to 19 were not yet out of school for the summer. The data for June, July and August will provide further insight into the summer job market. The published estimates are not seasonally adjusted; therefore comparisons can only be made from one year to another.

The summer job market started in May for students aged 20 to 24. The number of employed students fell by 59,000 compared with a year earlier, all in full time. At the same time, their participation in the labour force fell substantially from 75.2% to 68.6%. May’s unemployment rate was 18.3% for this group of students, compared with 15.4% in May 2008.

Full Report Available here:

http://www.statcan.gc.ca/daily-quotidien/090605/dq090605a-eng.htm

Canada Mortgage and Housing released its Spring Rental Market Report today. Highlights:

• The average apartment vacancy rate in Alberta’s urban centres increased from 2.9 per cent in April 2008 to 4.6 per cent in April 2009. All centres except Grande Prairie reported a higher vacancy rate in 2009.
• The 2009 vacancy rates ranged from a low of 1.2 per cent in Cold Lake to a high of 8.5 per cent in Grande Prairie.
• Calgary and Edmonton, the two largest urban centres, reported vacancy rates of 4.3 and 4.7 per cent, respectively.
• The provincial average rent for all unit types was $962 per month in April. At $2,088, Wood Buffalo had the highest average monthly rent amongst all urban centres in Alberta, while Medicine Hat had the lowest average rent at $654 monthly.

Brought by Moishe Alexander, CFC CEO.

Residential home values and monthly trends for Montreal Metro Area, Quebec Canada, report from Moishe Alexander

Home Values Service © 2009 Homes-Market.com – Real Estate Search

Home Values Service © 2009 Homes-Market.com – Real Estate Search