Barak Obama Make You Want To Buy A House?
Apparently, a bunch of Canadians told Royal LePage just that. Here’s the Canada real estate company’s press release:
Economic downturn and dampened consumer confidence caused house prices to dip during fourth quarter
Poll indicates tomorrow’s federal budget announcement, Obama inauguration anticipated to buoy optimism
TORONTO, Jan. 26 /CNW/ - During the fourth quarter of 2008, Canada’s real estate market posted a decline in both unit sales and house prices, according to a House Price Survey released today by Royal LePage Real Estate Services.
The combination of a global economy in recession and shrinking employment figures did much to dampen consumer confidence, diminish home sales and cause house prices to drop.
Of the housing types surveyed, the average price of detached bungalows dipped by 4.8 per cent to $319,640, followed by standard condominiums, which decreased by 5.2 per cent to $233,230, year-over-year. The average price of standard two-storey properties fell by 6.3 per cent to $376,140, year-over-year.
While national average house prices decreased, price trends varied dramatically across regional real estate markets. Bolstered by strong local economies, the housing markets in Regina and St. John’s posted double-digit year-over-year price appreciations, while the larger cities that have seen the greatest increase in prices this decade, including Toronto, Edmonton, Calgary and Vancouver, recorded declining house prices.
The tumultuous times that characterized the end of 2008 are not anticipated to define 2009. A recent poll commissioned by Royal LePage found that almost half (49%) of Canadians surveyed agree that the economic stimulus measures anticipated as part of tomorrow’s Canadian federal budget announcement will have a positive impact on Canada’s real estate market.
Political actions taking place south of the border are also likely to buoy the country’s economic conditions, as the poll found that 82 per cent of Canadians agree that the inauguration of Barack Obama will have a positive impact on consumer confidence in Canada.
“The steady flow of universally dire news that Canadian consumers faced in the fourth quarter has gradually given way to a mixed diet of positive and negative economic indicators,” said Phil Soper, president and chief executive, Royal LePage Real Estate Services. “This is clearly having some impact on consumer confidence as nearly half of all Canadians believe the steps the government is taking to stimulate the economy in tomorrow’s budget will positively impact the country’s real estate market.”
Added Soper: “During the fourth quarter, housing markets go through a typical seasonal slowdown, and 2008 was no different. Earlier in 2008, as the country began to experience the anticipated adjustment in home sales, news that Canada would be hit hard by the rapidly expanding global recession caused home sales to grind to a halt in the last quarter. In many regions of the country, those that did decide to sell their homes were faced with a limited number of buyers who could be broadly classified as bargain hunters. What would have been a normal cyclical correction gave way to a sharp reset in housing values.”
The inability for real estate activity to continue at the pace seen earlier in the decade comes as no surprise. While the large price increases, bidding wars and brief listing periods that characterized the ‘boom’ years were driven by solid economic fundamentals including real buyer demand and the ability and willingness to match rising listing prices, they were unsustainable in the long run, particularly if any of the factors that underpinned the economy weakened - exactly what occurred at the end of 2008.
Soper notes that as consumer confidence levels begin to creep upwards, the country’s solid economic fundamentals should lead to a recovery in the housing market. “For many people, deciding to hold off on buying a home at the end of the year was an easy decision to make. With consumer confidence in tatters, many were reticent about making any large purchases. However, waiting on the sidelines during the normally slow winter market is one thing, sitting out the seasonally busy spring market is quite a different story. Activity levels should rise as the year progresses.” said Soper.
Despite the global and Canadian economic downturn that characterized much of the fourth quarter of 2008, each province soldiered on in their way, and relied on the strength of their local economies to support their housing markets.
While lags in sales and prices were noted in many parts of the country, St. John’s real estate market experienced phenomenal double-digit price increases and recorded Canada’s highest price appreciation in the fourth quarter. Move-up buyers created an abundance of activity in the housing landscape as stable employment and growing incomes encouraged investment in more expensive properties. Despite disappointing employment news from the forestry sector, the recent announcement that Vale Inco NL is planning to construct a large new hydromet plant, helped to sustain the high level of confidence Newfoundlanders have in their province’s economy. Mirroring St. John’s healthy economic activity and fuelled by stable and diverse economies, many cities in Atlantic Canada saw healthy price appreciations at the year’s end.
Looking west, Saskatchewan’s local economy also weathered the storm, and led to price increases in both Regina and Saskatoon. Finally adjusting to the sharp rise in prices experienced over the past two years, residents of Saskatoon saw much smaller average price increases year-over-year in the fourth quarter. Regina, where recent price increases have been more modest, experienced double-digit house price gains. In both cities, favourable employment rates and consumer confidence levels, and growing population figures, were able to sustain upward trends within the province’s real estate market during the last three months of 2008. Also insulated to a certain degree by its strong regional economy, Winnipeg’s real estate market saw price gains during the fourth quarter. However, like Saskatoon, the large percentage increases that have characterized the Winnipeg market in recent years have given way to modest single digit price appreciations.
The cities in which real estate prices appreciated most quickly over the last few years, including Toronto, Calgary, Edmonton and Vancouver trended lower as shown by year-over-year house price comparisons. Despite these cities’ tight labour markets and reasonable buyer demand, the fact that house price growth overshot the rate of income growth during the boom periods, will result in a short-term price correction.
With relatively modest average housing values and a recent history of moderate price appreciation, residents in Montreal and Ottawa experienced only slight price corrections. While no region of the country is immune to the effects of the global recessions, the relative strength of these regions’ diversified economies are expected to buffer the housing markets there when compared to the corrections happening in other large Canadian cities.
Looking ahead, Soper concluded, “The first quarter of 2008 was the final period of substantial price appreciation during the long expansionary cycle that Canadian housing enjoyed this decade. The first quarter of this year will pale in year-over-year comparison, although conditions should improve over the dismal final months of 2008. The balance of 2009 should see gradual and continuous improvements as the effects of low mortgage rates along with efforts by governments and central banks to get the economy back on its feet again begin to take hold.”
Source: Canada NewsWire
Canada Real Estate Blog Roundup
Today’s post is a quick check on what’s being said and where on blogs other than Canadarealestategateway.com which deal with various Canadian real estate markets. Please note, most of the blogs are run by realtors, real estate agents or brokerages. But they’re still good and informative and that’s why we’ve listed them below.
In Toronto, condo specialist Andrew La Fleur has a breakdown of the December sales and listing numbers for Toronto condominiums. He reports on Toronto Real Estate Board figures showing Toronto condo sales are down, condo prices are down and the number of condo properties listed is either up or down, depending on the area.
As for the Montreal real estate market, the Montreal Real Estate Blog has a short post (with a video clip) indicting that the Greater Montreal Real Estate Board wants its Montreal realtor and real estate agent members to start blogging.
In Edmonton, the Edmonton Real Estate Blog has a good post reminding Edmonton home owners that their tax assessment does not reflect the current market value of their home.
At Edmonton Condo Blog, you can follow the weekly sales update posts to notice a trend - sales and prices are down.
In Calgary, The Calgary Real Estate Blog says it’s making some changes to its site, but hopefully it keeps going with the new “Are they serious” series calling real estate agents out on how they describe properties on MLS.
In Vancouver, the Vancouver Reflections real estate blog by Maggie Chandler of Chandler Realty Ltd. has a whole whack of charts on sales, prices and listings in West Vancouver.
In the world of borrowing and mortgages, the very informative insiders’ blog at Canadianmortgagetrends.com reports that fixed rate mortgages are actually dropping and looking much more appealing these days.
Montreal Real Estate Performed Well in 2008
That headline kinda contradicts most of what we’ve been posting here at Canadarealestategateway.com about most major Canadian real estate markets for last year, so we thought we’d let the Greater Montreal Real Estate Board explain it in their own words:
Montreal Resale Market Performed Well in 2008
Ile-des-Soeurs, The Greater Montreal Real Estate Board (GMREB) reported that the median price of single-family homes in the Montreal Metropolitan Area increased by 6 per cent in 2008 compared to 2007 while, overall, residential sales slowed by 7 per cent.
“The Montreal real estate market fared well in 2008 with almost 41,000 sales transactions, 7 per cent less than the previous year, which was the year that broke all records,” said Michel Beausejour, FCA, Chief Executive Officer of the GMREB. “In addition, prices continued to increase in 2008, which bodes well for homeowners and anyone who has a vested interest in Montreal real estate. You just have to look at what’s happening elsewhere like Calgary, Vancouver or Toronto, which have seen prices and sales drop dramatically over the last year, to appreciate the strength of the Montreal market,” he said.
All real estate property types registered price increases in 2008. The median price of a single-family home grew by 6 per cent compared to 2007, to reach $227,000. The median price of plexes also grew by 6 per cent, while that of condominiums increased by 3 per cent.
In terms of sales, condominiums were the big winners in 2008 with sales virtually matching those in the record-breaking year of 2007. Sales of single-family homes dropped by 10 per cent and sales of plexes fell by 9 per cent compared to 2007.
The number of transactions on the South Shore and in Laval was down 5 per cent and 6 per cent, respectively, compared to last year.
Sales on the Island of Montreal were down 8 per cent, and sales were down 9 per cent on the North Shore and in Vaudreuil-Soulanges.
The average number of active listings on the MLS system in 2008 was 7 per cent higher than last year, giving a bit more choice to potential buyers.
Prices Up, Sales Down in December 2008
Sales in the Montreal Metropolitan Area were down 29 per cent in December 2008 compared to December 2007.Single-family and plex prices continued to grow, increasing by 3 per cent in December 2008 compared to the same period last year, while that of condominiums dropped by 2 per cent.
“Consumer confidence, a key factor in the vibrancy of the real estate market, has obviously been affected recently as a result of the constant bombarding of unsettling news about the world economy. However, Montrealers should be heartened by the overall results for 2008, which was the second most significant year overall for the Montreal real estate market in terms of sales,” said Beausejour. “As well, it’s interesting to note the results of our annual buyers’ and sellers’ survey which show that roughly the same number of people intend on buying this year as last year,” he said.
On December 31, 2008, the number of active listings on the MLS system was up 17 per cent compared to the same date last year.
Buyers’ and Sellers’ Intentions Remain Good
According to the latest GMREB Buyers’ and Sellers’ Survey, 5 per cent of households in the Montreal Metropolitan Area intend on purchasing a home in 2009, a similar result to that of 2008. In addition, 17 per cent of respondents said they were likely or very likely to buy a home within the next five years, down 3 points compared to the results obtained last year.“The surveys we have conducted have been quite accurate and this is good news for Montreal real estate. For example, in 2006, the buyers’ intention was 9 per cent and this led to the record-breaking year of 2007,” said Beausejour.
Sellers’ intentions were also similar to those of last year. The proportion of respondents in the Montreal Metropolitan Area who indicated they were likely or very likely to sell a property within the next five years remained at 15 per cent.
The survey also showed significant differences in the profile of future buyers. Four out of 10 buyers will be couples with one or more children, a significant increase compared to 2007 (40 per cent versus 28 per cent). There was also an increase in the proportion of future buyers in the 40-to-49-year-old age group (28 per cent versus 20 per cent). Also of interest was the significant increase in the amount of respondents who plan on buying a smaller property (29 per cent versus 21 per cent).
The GMREB commissioned Groupe Multi-Reso to conduct an annual telephone survey of more than 1,500 buyers and sellers in the Montreal Metropolitan Area, which was undertaken from October 21 to November 9, 2008.
Source: Greater Montreal Real Estate Board
Streak Officially Over in Vancouver
So says the Real Estate Board of Greater Vancouver (REBGV). We’ve been reporting on dismal state of real estate in Vancouver here at this Canada real estate blog for some time, but the Real Estate Board of Greater Vancouver has made it official - 2008 was ugly. Actually, what the Real Estate Board said was 2008 “improved housing affordability” - God bless the eternal optimism of your average real estate agent. Vancouver Canada real estate benchmark prices, as calculated by the MLSLink Housing Price Index, declined 10.9 per cent between Decembers 2007 and 2008.
Since May 2008, the overall residential benchmark price has declined 14.8 per cent in Greater Vancouver to $484,211 from $568,411.
The Board was sure to point out, however, that the Vancouver BC real estate market saw home prices escalate from $357,770 for a single family detached home in December 2001 to $648,421 by December 2008.
Sales of detached, attached and apartment homes in Vancouver decreased 35.3 per cent in 2008 to 24,626 sales compared to 38,050 sales in 2007.
The total number of homes for sale in Vancouver, on the other hand, for the year increased 13.9 per cent to 62,561 compared to 2007 when 54,945 new properties were listed.
The Real Estate Board of Greater Vancouver also released its December Vancouver BC real estate sales figures.
The Board said in a press release that in December 2008, sales of detached, attached and apartment homes in Vancouver totaled 924, a decrease of 51.3 per cent compared to the 1,897 sales in December 2007.
New listings for detached, attached and apartment-style Vancouver homes declined 8.6 per cent to 1,550 in December 2008 compared to December 2007 when 1,695 new units were listed. Total MLS listings in December declined 17.2 per cent to 15,193 from the 18,348 total active MLS listings in Greater Vancouver in November 2008.
Sales of detached homes in Vancouver in December 2008 declined 48.7 per cent to 348 from the 679 units sold during the same period in 2007. The benchmark price for detached properties declined 11.2 per cent from $730,399 in December 2007 to $648,421 in December 2008. Since May 2008, the benchmark price for a detached piece of residential real estate in Greater Vancouver has declined 15.9 per cent.
Sales of Vancouver BC apartment properties declined 53.7 per cent last month to 417 compared to 901 sales in December 2007. The benchmark price of an apartment property declined 11.7 per cent from $377,579 in December 2007 to $333,275 in December 2008. Since May 2008, the benchmark price for an apartment property in Greater Vancouver has declined 14.5 per cent.
Attached property sales in December 2008 decreased 49.8 per cent to 159, compared with the 317 sales in December 2007. The benchmark price of an attached unit declined 7.4 per cent from $456,941 in December 2007 to $423,338 in December 2008. Since May 2008, the benchmark price for an attached property in Greater Vancouver has declined 11.6 per cent.
Source: Real Estate Board of Greater Vancouver