December 28, 2007
Home sales break records
The Canadian Real Estate Association hasn’t even tabulated data from December, but Canadian home sales for the first 11 months of the year have already broken the full-year record reached in 2006.
According to CREA, 496,890 homes were sold in Canada by the end of November, a number that is already 2.7% higher for the full-year tally from 2006.
Year-over-year, seasonally adjusted November home sales rose 1.6% to 42,576 units for November, 2007. The average national price for a Canadian home rose 11.7% over the same period to $313,645.
“Resale housing activity next year will recede from this year’s breakneck pace as further price increases dent affordability,” said Gregory Klump, Crea’s chief economist.
Yet that’s not necessarily bad news, he added. CREA is expecting interest rates will continue to edge slightly lower while household incomes will continue to rise. So even if the total number of sales declines, Mr. Klump said CREA still expects 2008 to produce the second-highest level of sales on record.
Canada has having much more luck that the United States, where on Friday the U.S. Department of Commerce reported that American home sales for November fell to the lowest level since April, 1995. Economists surveyed by Reuters had expected sales of 720,000.
December 26, 2007
Can you afford it?
With house prices soaring by 10 per cent in the past year, many Canadians are struggling to find an affordable home. But take a step back, and Canada’s situation doesn’t look so bad, as Jason Kirby reports in the current issue of Maclean’s. In fact, when compared to some of the world’s other major centres, Canadian cities still offer some of the best housing deals anywhere.
Each year, Demographia—a U.S.-based real estate research firm—reports on housing affordability in 159 major markets around the world. Their most recent report found that Canada had some of the most affordable regions of all the nations surveyed(which included the U.S., the U.K., Ireland, Australia and New Zealand). In fact, Regina, is listed as one of the three most affordable markets(Fort Wayne, IN, and Youngstown, OH, were the others).
And while both Vancouver and Victoria ranked among the 25 least-affordable markets in the survey, earning the description of “severely unaffordable,” they were the only Canadian cities represented in that category—well below the number of U.S. cities(14), as well as the U.K.(5)and Australia(4).
Calgary and Toronto, meanwhile, were described as “seriously unaffordable,” while Montreal, St. Catharines, Edmonton, Hamilton and Halifax are “moderately unaffordable.” But good news - several Canadian cities were classified “affordable,” including Ottawa, Saskatoon, Quebec, Winnipeg, and of course, Regina.
December 21, 2007
Condos outselling houses
A single-family detached house has long been the ideal dream for Canadian homebuyers. But, in case you couldn’t already tell by all the construction cranes dotting Toronto’s ever more crowded skyline, 2007 has become the year of the condo. New condominium sales in the Toronto area officially passed the 50% mark for the first time, outselling new low-rise homes, according to November figures to be released today by the Building Industry and Land Development Association.
“This is really unheard of. Low-rise homes were always the preferred choice, but it shows you how much the market has changed,” Stephen Dupuis, chief executive of the association, said in an interview.
The average new condo price is now $347,207, up 8.6 per cent from last November. Low-rise homes saw a price increase of 6.8 per cent to $429,673.
Historically, from one-quarter to one-third of all new homes sold were condos, Dupuis said. But over the years, that ratio has risen sharply, with condos taking the lead in November, making up 52 per cent of all new homes sold in the 11 months.
With one month left to go, builders expect that ratio to stay above 50 per cent to close 2007.
“When condo sales were 45 per cent of the market last year, we thought we’d never see another year like that,” Dupuis said.
In the first 11 months of this year, 22,059 condos were sold, smashing the previous annual record of 17,561, set in 2005
.
Analysts say affordability is one of the main drivers of the condo market, as buyers priced out of the single-detached segment set their sights on something more financially manageable.
“The $82,000 difference in price between an average low-rise home and a condo goes a long way to explaining the highrise market strength,” Dupuis said.
“The suburban type home with the big lot has gotten so expensive, people are backing into the condo market.”
Thanks to the strength of the condo market, overall new-home sales, which were forecast to be 10 per cent less this year than last, will likely be 10 per cent higher, said association president Bob Finnigan.
“New condos are selling like hotcakes, it’s as simple as that,” said Finnigan.
This week has seen a string of good news for realtors, in stark contrast to the capsizing U.S. housing market, which has seen prices implode
.
On Wednesday, the Toronto Real Estate Board reported that, during the first two weeks of December, home resales in the Toronto area topped the 90,000 mark for the first time.
Nationally, the Canadian Real Estate Association this week said home resales broke the annual record in the first 11 months of the year, with one month to go.
Despite the strength in sales, analysts say next year will see fewer sales of homes and more moderate price appreciation.
The real estate firm Royal Lepage Real Estate Services expects the average resale home to appreciate by 3.5 per cent in 2008.