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<span style="font-weight: bold">HOUSING RECORDS TO FALL; Red-hot Vancouver and Toronto drive totals</span>
Friday, December 4th, 2009 | 5:20 am
Canwest News Service
November housing sales across the country are set to reach new highs based on fresh data from the country's two most expensive markets.
The national numbers from the Ottawa-based Canadian Real Estate Association are not due out until mid-December but the Toronto Real Estate Board said yesterday it had its best November on record.
Toronto's news came on the heels of a Wednesday release from the <span style="font-weight: bold">Real Estate Board of Greater Vancouver that said sales activity in the city rocketed up 252.7% in November from a year ago.</span>
What the latest numbers will likely mean is an improvement in <span style="font-weight: bold">the national average sale price, which was up 20% in October from a year ago —</span> the largest such increase in two decades. The two cities tend to skew the national average price, based on levels of sales activity.
"You are going to see a very strong national number. It will be another double-digit increase for sure," said Benjamin Tal, senior economist at CIBC World Markets. "You have to remember you are comparing all this against a very low base. Last year at this time we were talking about 1929. This was a dead market."
In November 2008, the greater Vancouver area had a meagre 874 sales. This November that figure was up to 3,083. But there are some indications the temperature in the red-hot housing market is dropping; Vancouver November sales were down 16.8% from October, although the numbers are not seasonally adjusted.
<span style="font-weight: bold">Toronto has a similar story to Vancouver. Canada's largest market had 7,446 sales last month, almost double the number from a year ago, but down from the 8,476 in October.
Despite the lack of listings, prices eased last month. The average sale price in Toronto was $418,460, a 14% jump from a year ago, but a drop from the record high of $423,559 in October.</span>
In Vancouver, the average price of a home reached $557,384 last month, a 12.4% increase from a year ago. But at that level, prices in Vancouver are actually down 1.9% from the peak in May 2008.
Re/Max, one of the country's largest real-estate companies, issued its housing outlook for 2010 and though it still sees a strong market, both housing sales and prices are not expected to maintain their torrid pace. Re/Max says sales next year will climb by 2% while the average sale price across the country will rise to $325,000 for a 2% increase.
"There is a ton of business being done but nothing was being done in November [2008]. The whole world stopped last fall, not just the real-estate world," said Michael Polzler, executive vice-president of Re/Max Ontario-Atlantic Canada. "We should expect a very good year with a continued high number of sales. We don't expect significant changes in interest rate levels."
Record low interest rates have partly fuelled the market and prices, but so have low inventory levels. In Toronto, inventory levels remain 49% down from a year ago, with November 2009 new listings the same as a year ago. In Vancouver, total listings are down 39% from a year ago.
As for the interest-rate part of the puzzle, the Canadian Association of Accredited Mortgage Professionals latest statistics show consumers could find themselves exposed. In the past 12 months, only 20% of consumers opted for a variable-rate product but the overall numbers show 27% of Canadians still have mortgage tied to prime. "There is no questions rates and afford-ability have contributed to the market," said Jim Murphy, president of CAAMP.
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BY THE NUMBERS
After a steep downturn at the start of 2009, the housing market is beginning to show signs of recovery:
27 Average percentage drop in home sales across Canada in the first quarter of 2009, compared with 2008.
40 Percentage drop in 2009 Q1 in the hardest-hit markets, Greater Vancouver and Sudbury, compared with 2008.
20 Percentage drop of home sales during the same period in markets including Greater Toronto, Regina, Montreal and Halifax-Dartmouth.
7 Average percentage increase nationally in home sales by the final quarter of 2009, compared with 2008.
45 Percentage increase in home sales in Greater Vancouver by year-end 2009, compared with 2008.
15 Number of national markets, out of 23 surveyed, in which housing values posted new records in 2009.
2 Number of markets — Ottawa and Quebec City — that hit record highs in residential sales, reporting 15,500 and 14,000 units sold, respectively.
5 Average percentage increase nationally in home values by the final quarter of 2009, compared with 2008. The average house price rose to $3118,000 from $303,594.
Friday, December 4th, 2009 | 5:20 am
Canwest News Service
November housing sales across the country are set to reach new highs based on fresh data from the country's two most expensive markets.
The national numbers from the Ottawa-based Canadian Real Estate Association are not due out until mid-December but the Toronto Real Estate Board said yesterday it had its best November on record.
Toronto's news came on the heels of a Wednesday release from the <span style="font-weight: bold">Real Estate Board of Greater Vancouver that said sales activity in the city rocketed up 252.7% in November from a year ago.</span>
What the latest numbers will likely mean is an improvement in <span style="font-weight: bold">the national average sale price, which was up 20% in October from a year ago —</span> the largest such increase in two decades. The two cities tend to skew the national average price, based on levels of sales activity.
"You are going to see a very strong national number. It will be another double-digit increase for sure," said Benjamin Tal, senior economist at CIBC World Markets. "You have to remember you are comparing all this against a very low base. Last year at this time we were talking about 1929. This was a dead market."
In November 2008, the greater Vancouver area had a meagre 874 sales. This November that figure was up to 3,083. But there are some indications the temperature in the red-hot housing market is dropping; Vancouver November sales were down 16.8% from October, although the numbers are not seasonally adjusted.
<span style="font-weight: bold">Toronto has a similar story to Vancouver. Canada's largest market had 7,446 sales last month, almost double the number from a year ago, but down from the 8,476 in October.
Despite the lack of listings, prices eased last month. The average sale price in Toronto was $418,460, a 14% jump from a year ago, but a drop from the record high of $423,559 in October.</span>
In Vancouver, the average price of a home reached $557,384 last month, a 12.4% increase from a year ago. But at that level, prices in Vancouver are actually down 1.9% from the peak in May 2008.
Re/Max, one of the country's largest real-estate companies, issued its housing outlook for 2010 and though it still sees a strong market, both housing sales and prices are not expected to maintain their torrid pace. Re/Max says sales next year will climb by 2% while the average sale price across the country will rise to $325,000 for a 2% increase.
"There is a ton of business being done but nothing was being done in November [2008]. The whole world stopped last fall, not just the real-estate world," said Michael Polzler, executive vice-president of Re/Max Ontario-Atlantic Canada. "We should expect a very good year with a continued high number of sales. We don't expect significant changes in interest rate levels."
Record low interest rates have partly fuelled the market and prices, but so have low inventory levels. In Toronto, inventory levels remain 49% down from a year ago, with November 2009 new listings the same as a year ago. In Vancouver, total listings are down 39% from a year ago.
As for the interest-rate part of the puzzle, the Canadian Association of Accredited Mortgage Professionals latest statistics show consumers could find themselves exposed. In the past 12 months, only 20% of consumers opted for a variable-rate product but the overall numbers show 27% of Canadians still have mortgage tied to prime. "There is no questions rates and afford-ability have contributed to the market," said Jim Murphy, president of CAAMP.
———
BY THE NUMBERS
After a steep downturn at the start of 2009, the housing market is beginning to show signs of recovery:
27 Average percentage drop in home sales across Canada in the first quarter of 2009, compared with 2008.
40 Percentage drop in 2009 Q1 in the hardest-hit markets, Greater Vancouver and Sudbury, compared with 2008.
20 Percentage drop of home sales during the same period in markets including Greater Toronto, Regina, Montreal and Halifax-Dartmouth.
7 Average percentage increase nationally in home sales by the final quarter of 2009, compared with 2008.
45 Percentage increase in home sales in Greater Vancouver by year-end 2009, compared with 2008.
15 Number of national markets, out of 23 surveyed, in which housing values posted new records in 2009.
2 Number of markets — Ottawa and Quebec City — that hit record highs in residential sales, reporting 15,500 and 14,000 units sold, respectively.
5 Average percentage increase nationally in home values by the final quarter of 2009, compared with 2008. The average house price rose to $3118,000 from $303,594.
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