Housing performance expected to accelerate in 2010

The year isn’t over yet, but you can definitely expect new Market forecast coming this month, telling us how the year did so far and what to expect for 2010. This is the first we’re publishing here. The report was done by RE/MAX. More reports coming soon.

As economic stability returns to Canadian markets, housing performance expected to accelerate in 2010.
The RE/MAX Housing Market Outlook for 2010 examined residential real estate trends in 23 markets. The report found that sales are forecast to recover in almost all major centres by year-end 2009

“Canadians continue to demonstrate their commitment to homeownership – regardless of the economic climate,” says Sylvain Dansereau, Executive Vice President, RE/MAX Quebec.
“No where in Canada is that more evident than in Quebec. The province, with one of highest percentage of renters in the country, is well-poised for an escalation in homeownership levels as renters enter the market en masse to take advantage of ideal market conditions. Prices remain well under the national average, making ownership more attainable and leaving more room for appreciation that’s been long overdue.”

More on the Market Outlook Nationwide:

• Approximately 465,000 homes are expected to change hands nationally in 2009, a 7% increase over one year ago.
• Canadian housing values are forecast to close the year at $318,000, up 5% from $303,594 in 2008.
• By year-end 2010, the number of homes sold is predicted to climb another 2% to 475,000 units.
• The average price of a home is also expected to experience an uptick, rising 2% to $325,000 – the highest level in Canadian history.

Home re-sale market shows signs of recovery

Canada’s housing market shows every sign of having bounced back from its recessionary bottom, with both the number and price of homes rising for the third straight month in April.

The Canadian Real Estate Association said homes sales soared 11.2 per cent on a seasonally adjusted basis from March, the biggest jump in five years, and with 34,838 units trading hands, the highest level in seven months.

Meanwhile, the national average sale price of homes listed by realtors also rose in April to $306,366 in April.

But while encouraging, the report noted that both sales activity and prices remain at levels lower than a year ago, indicating the housing market has yet to fully recover to pre-recession levels.

The average home resale price is down 3.2 per cent from a year ago and down almost 10 per cent from the peak of $324,000 reached in December 2007.

Economists with Scotia Capital pointed out in a note to clients that the resale housing market does little to increase gross domestic product since it involves paper transactions, and that new home construction remains week.

Source: Canadian Press. Read the complete article

In Vancouver: Ritz Carlton Condo-Hotel Project Cancelled

Missed opportunity of what could have been a great Development.

The Holborn Group stopped its 60-storey Ritz-Carlton project in downtown Vancouver after only 62 of the 123 units were sold. The $500-million luxury hotel and condominium project featured a 20-storey hotel topped by 40 storeys of condos.

“The development would have been the second-tallest building in the city and was scheduled to be completed in 2011.
Prices ranged from between $2.5 million and $10 million, with the penthouse set at $28 million. Buyers will get their deposits refunded.” -The Canadian Press

Reasons: Lack of pre-sales and the current economic downturn

“To get financing, you need a certain amount of presales – and because we didn’t have enough units sold, financing didn’t turn out the way we wanted,” Holborn president Joo Kim Tiah said yesterday.
Those sales didn’t meet the threshold of 75 the company, and potential lenders, were looking for, so the project was put on ice. – Globe and Mail

Sunday Morning Suggested Reading

• 10 Questions to Ask a Seller’s Agent Before You Hire Them – Vancouver Reflections
• Is a 40-Year Mortgage Hazardous for your Financial Health? – Move Smartly
• Underground contractors can cost you everything – St. John’s Real Estate Blog
• How long should it take to sell? – Toronto Real Estate Intelligence
• Variable rate versus fixed rate mortgages, what is the way to go? – Mississauga Real Estate

News Roundup: Canadian Housing Market.

• Market Blog – Just bought a house? Don’t read this – Globe & Mail Market Blog.
• Homeless crisis grows while Canada prospers – The Vancouver Sun.
• ‘Cooling’ the watchword in Canadian real estate – CBC News.ca.
• Slide ends housing boom – National Post
• Has the housing boom gone bust? – Calgary Herald
• Low inflation gives Canada wiggle room on rates, analysts say – Canada.com
• A little mortgage savvy gets some big savings – Report on Business.

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Friday Morning links: Canadian Market News

• Housing markets on shaky ground. [ Report on Business Globe & Mail ]“Canada is in better shape than many other countries and home prices here aren’t expected to drop this year.But that doesn’t mean home owners should expect, or want, to see the big gains of past years.”
• Voices: 40-year mortgages [ The Star.com ] “It should be against the law for banks to offer (and CMHC to insure) 40-year mortgages. If you have to finance with little or no money down and spread the payments of 40 years then it is obvious you cannot afford the home you are buying.”
• Softer sales will cool market. [ The Star.com ] “Canadian housing markets should cool down some this year and next with softer sales, construction and price growth from coast to coast”

On Blogs:

• TD Economics Special Report “Canada’s Red Hot Real Estate Markets to Cool” – Mortgage Dairies.ca

Royal LePage Housing Report: first quarter 2008.

Canada’s real estate market stands on stable footing. On average, healthy year-over-year house price gains were recorded during the first three months of 2008.

While more modest price increases were observed when compared to previous quarters, the solid appreciations noted in the first quarter are largely due to the shared effects of resilient local economies, high immigration levels, and relatively low interest rates – all leading to enduring buyer demand, according to a House Price Survey report released today by Royal LePage Real Estate Services.

While almost all markets surveyed experienced price increases, it was the smaller cities, with relatively affordable housing and strong economies based on resource industries that emerged with the most significant gains. Thriving Saskatoon saw appreciation as high as 66 per cent, while areas in Newfoundland posted increases above 20 per cent for the first time since Royal LePage started tracking house prices. Continue reading this article >>

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