Low inventory levels set stage for heated Spring market
in most major Canadian centres, says RE/MAX
Active listings down in 81 per cent of markets in January.
Lack of inventory will be the greatest challenge facing housing markets across the country this Spring, according to a report released by RE/MAX.
The RE/MAX Market Trends Report 2010, which examined real estate trends and developments in 16 markets across the country, found that unusually strong activity during one of the traditionally quietest months of the year has led to a sharp decline in active listings in 81 per cent of markets surveyed. The threat of higher interest rates, tighter lending criteria, and in British Columbia and Ontario, the introduction of the new Harmonized Sales Tax (HST) have clearly served to kick-start real estate activity from coast-to-coast, prompting an unprecedented influx of purchasers. As a result, 87.5 per cent of markets posted an increase in sales in January. Average price appreciated in 81 per cent of markets surveyed.
There have never been so many motivating factors in play at once. We’re in for a heated Spring market that will, in all probability, spill over into the summer months, as the window of opportunity draws to a close. The supply of homes listed for sale has been drastically reduced, housing values are once again on the upswing, and banks and governments are moving in unison toward stricter lending policies.
Markets experiencing the tightest inventory levels include Toronto (- 41 per cent); Kitchener-Waterloo
(-33 per cent); Ottawa (- 30 per cent); Victoria (- 30 per cent); Greater Vancouver (- 27 per cent); Halifax-Dartmouth (- 19 per cent); London-St. Thomas (- 18 per cent); Regina (- 16 per cent); and Winnipeg (- 13 per cent). Conditions were still balanced, but starting to tighten in Calgary, Edmonton and Saskatoon, particularly in the single-family detached category.
The highest year-over-year sales gains were reported in Greater Vancouver (152 per cent), Kelowna (121 per cent), Greater Toronto (87 per cent), Victoria (69 per cent), Hamilton-Burlington (58 per cent), London-St. Thomas (55 per cent) and Calgary (47 per cent). Western Canadian cities dominated the list of centres with the highest increases in price appreciation. These included Victoria at 25.5 per cent, Kelowna at 22 per cent, Greater Vancouver at 19.5 per cent, and Winnipeg at 17 per cent. St. John’s (23 per cent) and Toronto (19 per cent) were also among the frontrunners for price growth.
Affordability is the catalyst for the vast majority of purchasers in today’s housing market. While homeownership is still within reach in many major centres, levels are slipping. There is a growing sense, on both sides of the fence, that the time to act is now.
While buyers are taking advantage of favourable conditions, sellers too are reaping the rewards. Competing bids are a factor in the marketplace once again, with well-priced listings—especially at the entry-level price point—experiencing multiple offers. Properties priced at fair-market value will likely sell quickly for top dollar. The overall pressure on sales and price is significant across the board – and it’s not likely to subside unless more inventory comes on-stream.
The level of frustration is growing, as pent-up demand builds. For every successful offer, there are those that will walk away empty-handed. They’re thrust back into the buyer pool and the process starts all over again. Some buyers are upping the ante, while others are considering alternate housing options. Still, purchasers remain cautious in their bids, with most careful not to max out debt service ratios.
Recent revisions to lending criteria will add fuel to the fire in the short term. Buyers considering a variable rate mortgage will step up their plans for homeownership in the next month or so just to get in under the wire. In the longer term, buyers will adjust, but move forward. Compromise has long been a reality—particularly in the larger centres. This simply means they may go smaller or further in their pursuits.
It’s been a 180 degree turnaround from this time last year. It’s clear that real estate from coast to coast has roared back to life and markets are once again firing on all cylinders. The vast majority of markets are now recovered and fully-evolved, with all segments working in tandem. At the luxury price point, activity was brisk in seventy-three per cent of centres surveyed, with momentum ramping up in the remainder. Opportunity exists in some areas, but the question is for how much longer?
Wednesday, February 24, 2010
Monday, February 8, 2010
January 2010 Real Estate Market for Oakville
According to MLS statistics released by the Oakville, Milton & District Real Estate Board (OMDREB), for the month of January 2010, total sales transactions were 527, an increase of 64 percent over January 2009. Total sales are comprised of all sales by OMDREB members regardless of jurisdiction. The constant increases witnessed in the market over the past 8 months are solid indications of strong consumer confidence in real estate. This confidence should result in a very strong and active spring market.
According to MLS statistics released by OMDREB, residential sales for Oakville in January 2010 are up by 133 percent over January 2009, which experienced extremely low sales activity. The average residential sale price is $594,986 and the median is $507,500.
Predictions are that we are not experiencing a housing bubble but that we should expect strong annual growth rates for existing home sales and average price through the first quarter as we continue to make comparisons to the weak market conditions at the beginning of 2009. It is anticipated that the rate of sales and price growth will be lower in the second half of 2010. The introduction of the Harmonized Sales Tax plus any increase in mortgage interest rates may affect affordability in the latter half of this year.
Sources: The Canadian Real Estate Association
The Oakville, Milton & District Real Estate Board
According to MLS statistics released by OMDREB, residential sales for Oakville in January 2010 are up by 133 percent over January 2009, which experienced extremely low sales activity. The average residential sale price is $594,986 and the median is $507,500.
Predictions are that we are not experiencing a housing bubble but that we should expect strong annual growth rates for existing home sales and average price through the first quarter as we continue to make comparisons to the weak market conditions at the beginning of 2009. It is anticipated that the rate of sales and price growth will be lower in the second half of 2010. The introduction of the Harmonized Sales Tax plus any increase in mortgage interest rates may affect affordability in the latter half of this year.
Sources: The Canadian Real Estate Association
The Oakville, Milton & District Real Estate Board
Monday, February 1, 2010
Heated housing activity throughout 2009 lends little air to bubble theory in the GTA, says RE/MAX
According to Thursday's press release from RE/MAX Ontario-Atlantic Canada, despite limited inventory levels in the Greater Toronto Area in the latter half of the year, double-digit price appreciation failed to materialize in the single-detached housing category in 2009.
In fact, an in-depth analysis by RE/MAX of 63 districts within the Toronto Real Estate Board found that detached housing values in 27 percent of districts remained slightly off 2008 levels, while 57 percent reported price appreciation of less than five percent in 2009. Sixteen percent of districts recorded an increase in average price in excess of five percent. No double-digit gains were noted.
"There is simply no evidence of a housing bubble," says Michael Polzler, Exective Vice President, RE/MAX Ontario-Atlantic Canada. "While sales were up considerably over one year ago - and supply was tight in many of the city's hot pocket areas - the expected surge in average price did not occur. Buyers remained cautious in their pursuit of homeownership - with most unwilling to overpay for the privilege."
While one quarter of all TREB districts saw prices in the detached housing category soften in 2009, just over half declined by less than two percent. Those that saw prices fall by more than two percent were primarily upper-end neighbourhoods - the vast majority located in the central core - which were slower to rebound once the market regained momentum. By year-end, however, sales in all these areas posted double-digit growth - a fact that clearly indicates a greater number of transactions at the lower end of the price spectrum. Inventory may have also played a role as sellers held off listing their lucury properties until market conditions improved.
"First-time buyers were a driving force throughout much of the year, but their role was most noticeable in early 2009," says Polzler. "Almost one in every two homes sold was priced under $400,000 in the first quarter of the year. An entirely different picture emerged in the final quarter when just one-third of homes moved under the $400,000 price point." As the move-up segment swelled, so too did demand for more upscale properties across the board. Yet, despite the upswing, average price registered only a small percentage increase.
"After a dismal start, the stats confirm that 2009 returned to the healthy, upward trajectory that we have followed for much of the last decade," says Polzler. "We see detached homes continuing on that course in 2010, with moderate gains expected. The detached housing category continues to be a solid gauge of the market's overall performance, accounting for approximatley half of the activity in GTA."
In fact, an in-depth analysis by RE/MAX of 63 districts within the Toronto Real Estate Board found that detached housing values in 27 percent of districts remained slightly off 2008 levels, while 57 percent reported price appreciation of less than five percent in 2009. Sixteen percent of districts recorded an increase in average price in excess of five percent. No double-digit gains were noted.
"There is simply no evidence of a housing bubble," says Michael Polzler, Exective Vice President, RE/MAX Ontario-Atlantic Canada. "While sales were up considerably over one year ago - and supply was tight in many of the city's hot pocket areas - the expected surge in average price did not occur. Buyers remained cautious in their pursuit of homeownership - with most unwilling to overpay for the privilege."
While one quarter of all TREB districts saw prices in the detached housing category soften in 2009, just over half declined by less than two percent. Those that saw prices fall by more than two percent were primarily upper-end neighbourhoods - the vast majority located in the central core - which were slower to rebound once the market regained momentum. By year-end, however, sales in all these areas posted double-digit growth - a fact that clearly indicates a greater number of transactions at the lower end of the price spectrum. Inventory may have also played a role as sellers held off listing their lucury properties until market conditions improved.
"First-time buyers were a driving force throughout much of the year, but their role was most noticeable in early 2009," says Polzler. "Almost one in every two homes sold was priced under $400,000 in the first quarter of the year. An entirely different picture emerged in the final quarter when just one-third of homes moved under the $400,000 price point." As the move-up segment swelled, so too did demand for more upscale properties across the board. Yet, despite the upswing, average price registered only a small percentage increase.
"After a dismal start, the stats confirm that 2009 returned to the healthy, upward trajectory that we have followed for much of the last decade," says Polzler. "We see detached homes continuing on that course in 2010, with moderate gains expected. The detached housing category continues to be a solid gauge of the market's overall performance, accounting for approximatley half of the activity in GTA."
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