The world housing market is continuing in its recovery, the newest Global Real Estate Trends report by Scotia Economics claims. Canadian market is in a good condition and in couple of other states, signs of recovery of the real estate market are visible too.
In 2009, the approximate number of MLS home sales 465,000 - increase of seven percent from a year before. The number of new homes last year, however, decreased from 2008. It was approximately 146,000 in 2009 and 211,000 in 2008. There was an increase in home prices, though - up to $315,000 over the year.
Canada is actually the leader in the property price increases. In the third quarter of 2009, average home prices rose by 11 percent. "Canada still leads the pack among the markets we track. " Adrienne Warren, Senior Economist of Scotia Economics said. "Inflation-adjusted average home prices in the July to September period were up 11 percent from the same quarter a year ago, a dramatic turnaround from the 10 percent yearly decline recorded in the opening months of 2009. " Warren further noted. There is no need to be worried about the rising prices in the country, according to Scotia Economics, though. As they claim, prices in the country rose mainly due to basic demand-supply factors and they should stabilize in the near future.
In Australia, the average home prices are in positive territory again, as they increased by 5 percent from third quarter of 2008 to third quarter of 2009. However, in the US, average home prices decreased by 6 percent in the third quarter of 2009 from the same period in 2008. That still is a pretty good result, if we consider that there was a fourteen percent decline in first quarter of 2009 from the year before. In European countries it's diverse: the situation in the UK is almost like the situation in the US. And in France we can see stabilizing of prices. "A shortage of homes for sale, alongside strengthening housing demand, is contributing to the firming in prices in a number of countries, including Canada, Australia and the UK." said Warren.
Good, good. Expected, too, after all the recent positive news about economic recovery. Great to hear once again that Canada belongs to countries doing just fine. If we compare our results with those of the US, we are pretty good. And frankly, I do feel quite proud.
Showing posts with label market. Show all posts
Showing posts with label market. Show all posts
Jan 20, 2010
Sep 21, 2009
Calmer times arrived to Toronto real estate market in August
For many of us, August means a time for holidays and relaxation to calm down your nerves after the hectic times before. This is also what has been going on concerning the housing market - the rapid growth from June and July has now ended and things are calming down, moving towards a more healthy and stabilized environment. Compared to August last year, all the indicators are showing much better results now, however lower than during the few months before.
Tom Lebour, the TREB President, points out the demand has increased across all housing types and also price ranges. The market is now very active, which is reflected by the days on market and active listings indicators both dropping. For a more detailed analysis, please follow our Toronto real estate market article.
Aug 27, 2009
Housing Situation Report in Canada: Syntesys
The conditions on the Canadian real estate market in 2008 and the first half of 2009 are analyzed in a report recently published by the Canada Mortgage and Housing Corporation. It deals mostly with the housing starts and with the affordability to rent & buy.
The report finds that after the shock of last year, now our real estate market is recovering again, however slowly. The new home market began the year of 2009 some 43% lower than in the first six months of 2008. However, in July 2009, the MLS sales already grew bigger by over 17% than in July 2008.
The general trend on the real estate market is growth now, and this goes also for the new housing price index. The average price in Canada has changed from -0.6% to -0.1% between January and May. In conformity with the improving resale market, the new housing price change in Toronto was slightly over zero for most of the time.
Economic conditions: Unemployment
We can be rather optimistic at the moment in regard to our economy. First, the unemployment growth seems to have got under control. In July, the number of net losses was 13,000, whereas during the first quarter of 2009, the fall reached 273,000. Moreover, the Bank of Canada describes the positive outcomes of the stimulus packages that were brought out by many countries during the last year.
Affordability to rent
Affordability of home ownership or renting is based on calculations of how many hours one needs to work in a month to bring the average cost of 2-bedroom apartment rent or the average mortgage payment down to 30 per-cent of gross monthly income. In 2008, the average hourly wages has increased by more than 5% up to $23.69 (Ontario: $24.65, Toronto: $24.93)).
Generally, the average number of working hours required to earn the average rent for a 2-bedroom apartment down to 30% has declined from 114 to 113 hours per month. The biggest decrease has been observed in St John's, Brantford and Guelph, whereas in Toronto the number of hours declined from 149 to 146, meaning that Toronto ended up as the second most expensive city in this "competition", just after Vancouver.
Affordability of home owner-ship
While the number of hours required to rent didn't decrease so distinctly, the same number for average mortgage payments down to 30% of gross income was more distinct - between 2007 and 2008 it declined from 255 to 240 hours. One of the cities where the amount of hours required to own declined the most, was Toronto: from 299 to 286. But yet Toronto stays 4th among the most expensive cities to own after Vancouver, Victoria and Abbotsford.
End notes
As an overall result of real estate market recovering from the second half of the year 2008, also new housing made a step towards better affordability, which I really welcome, being a Toronto realtor. If we look at the numbers for the first half of 2009, we can see steady or slight decrease of prices and slight improvement in affordability of both renting and home ownership. As the interest rates are still staying quite low, it is now a good time for purchasing a property, before the market takes a second breath.
Photo source: Rantes Aguirre
Jul 23, 2009
Canadian Real Estate Market: Better Times Ahead
The real estate bubble in the USA exploded about two years ago. As a result, people participating in the real estate market in Canada came up with a demand: "How will the circumstances in real estate in Toronto or Canada be developing from now on?"
There were two basic motives for this uncertainty. First, Canadian real estate market, as our whole economy, has powerful attachment to the situation in the USA. The second reason is originating from the progress of the property market in Canada between the years 2006 and especially 2007. The situation indicated a likelihood for a similar bubble to develop here. Now let's look at the situation almost twelve months later.
The way how things were developing between 2008 and 2009 didn't really appear too good, which only reinforced all the negative prophecies and only a few people still managed to keep their confident viewpoint. If we look at the monthly year to year sales statistics, we can identify a clear fall with its peak in January 2009: -47% compared to the same month last year. So it's apparent that the "depression panic" from fall 2008 has reached Canada. No wonder that most people were reluctant about making any important financial decisions, resulting in the property market almost coming to a halt. Under these circumstances, some “experts” foretold Canada facing similar collapse as in the USA. However, the reality is quite different. Let’s examine the 2009 figures.
Number of sales and year-to-year change
These are the most characteristic and closely watched indicators. Looking at these indicators, it is evident how the market froze in during the winter months. However, the sales in June sprang to more than four times of the volume in December. May was the first month in this period when we observed sales growth (compared to the same month in previous year) and June's +27% indicated the Toronto housing market is back on the horse.
Days on market
Another important indicator. While the previous ones draw the bulk of the market, Days on market show us the speed and freshness. These are important characteristics, since if we had only the whole market volume numbers available, we wouldn't be able to predict how long any property would be out on the open market. It is like another side of the same coin. In January, during the most problematic times, an average home stayed on the market just 14 days longer. Confronted with South Florida or Detroit, where days on market value got close to 120-150 days, our slowdown was ridiculous.
Active listings flow change
This figure indicates the mood of the real estate market. It is based on observing the number of new listings on the market. If the home owners are scared that their property price would decline and they want to save their investment, the inflow is naturally growing, while the opposite situation is generally considered as a favourable time to buy property. The future of other market's attributes can be predicted from the active listings flow change. For instance the positive change after January was seen as a market turn signal.
Average price
This one usually attracts the greatest attention from my real estate clients. Usually, one of the biggest items on people's property list is their home, which means that every market change can result in the owner getting thousands of dollars more or less. When the prices declined in autumn 2008, already the next April they rose back and higher.
Why is the market doing so well?! Even now, pessimistic news about the state of our economy are printed almost daily. So why has such a quick recuperation of the housing market occurred? We can find two basic factors:
1. Failed expectations
Many Canadians observed the collapse of US housing market and presumed the same scenario at home. However, what is crucial to emphasize here is the fact that the problems in the USA originated from the subprime sector. Few defaults at the beginning caused a chain reaction. It started with a price decline, and as a result foreclosures and short sales were not covering all the toxic mortgages, so the banks were pressed to put even more foreclosured properties on the marked, which decreased the prices even more. I dare to say that Canada has a very healthy financial system, which in cooperation with very limited subprime sector where there are only a few foreclosures occuring makes our real estate market a secure one. Homeowners became aware of this fact very soon and relaxed.
2. Stabilized economy and buying opportunities
Now we will briefly analyze the figures about inflation, unemployment, GDP predictions and interest rates. Real estate market largely depends on this data, as follows from real estate prices explanation. Despite the fact that these figures concerning employment or economic growth could look even much better, we can be quite relaxed: our economy is far from a collapse, it is only slowed down, in a stagnation period. All these facts also helped to stop the winter real estate fuss.
Conclusion and the future
We can say that in addition to enduring the winter depression, Toronto housing market has recovered very quickly and now it is growing again. We can even call the condo resale market as hot now. The previous "one year break" has resulted in low interest rates and favourable prices, which means especially first time buyers can enjoy terrific opportunities. Now it is also terrific time for investors to pick some cherries, as their prices still haven't recovered. Due to the market speed, most homes are now sold during the first month on the market and the selling price is usually quite good. So the vendors can feel comfortable too. On the other hand, slower labor market and pertaining level of uncertainty will hinder sudden price burst and bubble creation in next years. From the exceptional market growth of 27% in June we can tell that the market is trying to get to its previous speed and volume and it is likely to get steady soon. Toronto housing market forms a solid foundation of stability for Ontario's economy in wild times.
There were two basic motives for this uncertainty. First, Canadian real estate market, as our whole economy, has powerful attachment to the situation in the USA. The second reason is originating from the progress of the property market in Canada between the years 2006 and especially 2007. The situation indicated a likelihood for a similar bubble to develop here. Now let's look at the situation almost twelve months later.
The way how things were developing between 2008 and 2009 didn't really appear too good, which only reinforced all the negative prophecies and only a few people still managed to keep their confident viewpoint. If we look at the monthly year to year sales statistics, we can identify a clear fall with its peak in January 2009: -47% compared to the same month last year. So it's apparent that the "depression panic" from fall 2008 has reached Canada. No wonder that most people were reluctant about making any important financial decisions, resulting in the property market almost coming to a halt. Under these circumstances, some “experts” foretold Canada facing similar collapse as in the USA. However, the reality is quite different. Let’s examine the 2009 figures.
Number of sales and year-to-year change
These are the most characteristic and closely watched indicators. Looking at these indicators, it is evident how the market froze in during the winter months. However, the sales in June sprang to more than four times of the volume in December. May was the first month in this period when we observed sales growth (compared to the same month in previous year) and June's +27% indicated the Toronto housing market is back on the horse.
Days on market
Another important indicator. While the previous ones draw the bulk of the market, Days on market show us the speed and freshness. These are important characteristics, since if we had only the whole market volume numbers available, we wouldn't be able to predict how long any property would be out on the open market. It is like another side of the same coin. In January, during the most problematic times, an average home stayed on the market just 14 days longer. Confronted with South Florida or Detroit, where days on market value got close to 120-150 days, our slowdown was ridiculous.
Active listings flow change
This figure indicates the mood of the real estate market. It is based on observing the number of new listings on the market. If the home owners are scared that their property price would decline and they want to save their investment, the inflow is naturally growing, while the opposite situation is generally considered as a favourable time to buy property. The future of other market's attributes can be predicted from the active listings flow change. For instance the positive change after January was seen as a market turn signal.
Average price
This one usually attracts the greatest attention from my real estate clients. Usually, one of the biggest items on people's property list is their home, which means that every market change can result in the owner getting thousands of dollars more or less. When the prices declined in autumn 2008, already the next April they rose back and higher.
Why is the market doing so well?! Even now, pessimistic news about the state of our economy are printed almost daily. So why has such a quick recuperation of the housing market occurred? We can find two basic factors:
1. Failed expectations
Many Canadians observed the collapse of US housing market and presumed the same scenario at home. However, what is crucial to emphasize here is the fact that the problems in the USA originated from the subprime sector. Few defaults at the beginning caused a chain reaction. It started with a price decline, and as a result foreclosures and short sales were not covering all the toxic mortgages, so the banks were pressed to put even more foreclosured properties on the marked, which decreased the prices even more. I dare to say that Canada has a very healthy financial system, which in cooperation with very limited subprime sector where there are only a few foreclosures occuring makes our real estate market a secure one. Homeowners became aware of this fact very soon and relaxed.
2. Stabilized economy and buying opportunities
Now we will briefly analyze the figures about inflation, unemployment, GDP predictions and interest rates. Real estate market largely depends on this data, as follows from real estate prices explanation. Despite the fact that these figures concerning employment or economic growth could look even much better, we can be quite relaxed: our economy is far from a collapse, it is only slowed down, in a stagnation period. All these facts also helped to stop the winter real estate fuss.
Conclusion and the future
We can say that in addition to enduring the winter depression, Toronto housing market has recovered very quickly and now it is growing again. We can even call the condo resale market as hot now. The previous "one year break" has resulted in low interest rates and favourable prices, which means especially first time buyers can enjoy terrific opportunities. Now it is also terrific time for investors to pick some cherries, as their prices still haven't recovered. Due to the market speed, most homes are now sold during the first month on the market and the selling price is usually quite good. So the vendors can feel comfortable too. On the other hand, slower labor market and pertaining level of uncertainty will hinder sudden price burst and bubble creation in next years. From the exceptional market growth of 27% in June we can tell that the market is trying to get to its previous speed and volume and it is likely to get steady soon. Toronto housing market forms a solid foundation of stability for Ontario's economy in wild times.
Nov 17, 2008
Toronto real estate market news
I am sorry I haven't been present for so many weeks on my blog, but we have been very busy at luxury homes Toronto. So let me present you at least some stats from Toronto real estate market for October, issued by the TREB in Market Watch Report.
Where to start? Let's take it one after another.
Sales continued in serious decline, this time it was -35% for Great Toronto Area (-38% for the City and -32% for suburbs) compared to October 2007 and poor -25% down compared to October 2006.
Similar results appear when we look at the price level. It has declined -10% for GTA, (-13% for the City, -8% for suburbs). Fortunately, no signs of collapse appear, because the price level is still around the level of 2006. (-1% for GTA, -3% for the City and +1% for the suburbs).
Home sellers realize this and they don't flood the market with new listings. There was only 9% growth annually, but the number of active listings is still around the 27000 items. Market turnout remains pretty fast, with properties selling in less than 40 days on average.
Months are running and we can see the previous predictions were right - the peak of 2007 is gone, but the market is not going below its standards, which were set 4-5 years ago.
Except those, who bought their property 1 year ago, you don't have to feel any concerns about the value of your home.
And home buyers have still good chance to make an interesting deal!
Where to start? Let's take it one after another.
Sales continued in serious decline, this time it was -35% for Great Toronto Area (-38% for the City and -32% for suburbs) compared to October 2007 and poor -25% down compared to October 2006.
Similar results appear when we look at the price level. It has declined -10% for GTA, (-13% for the City, -8% for suburbs). Fortunately, no signs of collapse appear, because the price level is still around the level of 2006. (-1% for GTA, -3% for the City and +1% for the suburbs).
Home sellers realize this and they don't flood the market with new listings. There was only 9% growth annually, but the number of active listings is still around the 27000 items. Market turnout remains pretty fast, with properties selling in less than 40 days on average.
Months are running and we can see the previous predictions were right - the peak of 2007 is gone, but the market is not going below its standards, which were set 4-5 years ago.
Except those, who bought their property 1 year ago, you don't have to feel any concerns about the value of your home.
And home buyers have still good chance to make an interesting deal!
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