Canada home price index rises for 6th month in May

 

TORONTO, July 27 (Reuters) - Home resale prices in Canada notched their biggest monthly rise in May since last July, according to the Teranet-National Bank Composite House Price Index released on Wednesday.

The index, which measures price changes for repeat sales of single-family homes in six metropolitan areas, showed overall prices were up 1.3 percent in May from April, the second straight monthly gain of 1 percent or more. It was also the sixth straight monthly gain.

Vancouver and Toronto, already expensive markets, were the price-gain leaders, up 1.6 percent and 1.7 percent, respectively.

The Vancouver market was especially heated in the spring as buyers tried to get in ahead of the implementation of tougher mortgage rules in mid-March.

Time lags between the actual home sales and their entry into public land registries may account for the large gains in April and May after the mortgage rules were already in effect, the report said.

"This spike in activity is now behind us. Therefore, the recent large monthly rises in home prices in Canada should not be a lasting trend," said Marc Pinsonneault, senior economist at National Bank Financial.

Data from the Canadian Real Estate Association for June showed slowing sales in Vancouver and a trend toward slower sales nationally.

Economists at TD Bank and Royal Bank of Canada have recently forecast cooler housing markets over the next year or two, a view that is widely held by market watchers as the stricter mortgage rules and the anticipation of higher interest rates dampen demand.

Other Canadian markets in the Teranet index registered strength in May. Montreal prices rose 0.7 percent from April and Ottawa was up 0.5 percent. Calgary prices were up 0.6 percent, and Halifax eked out a 0.1 percent rise in the month. Overall prices were up 4.4 percent from a year earlier. The report did not provide actual prices.

 

Cat: Canada Real Estate

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West Vancouver Real Estate Boom

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Canadian home sales pick up in June 2011 - Canadian Real Estate

 

According to statistics released today by The Canadian Real Estate Association (CREA), home
sales activity over MLS® Systems of Canadian real estate Boards climbed in June 2011 compared to May.

Cat: BC Real Estate

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BCREA Housing Market Update - (July 2011)

 

(BCREA) Chief Economist Cameron Muir discusses the June 2011 statistics and an in depth look at VIREB's Buyer Profile Survey.

 

Cat: Vancouver Real Estate (BCREA)

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Bank of Canada inching closer to a rate increase

 

As expected, the Bank of Canada maintained the policy rate at 1.00% today; however, the Bank assumed a more aggressive tone with respect to the outlook saying that "some of the considerable monetary policy stimulus currently in place will be withdrawn." This is a step up from the May statement, which projected that stimulus would be "eventually withdrawn." On the outlook for the global economy, the Bank reiterated that the expansion is proceeding as it expected in the April forecast. On global inflation, the Bank maintained that global pressures have broadened as strong growth in the emerging markets keeps upward pressure on commodity prices. The Bank expects that commodity prices will remain at elevated levels. Importantly, the Bank's forecast assumes that the European sovereign-debt crisis will be contained.

Recent data and the prospect of stronger growth going forward suggest that domestic conditions warrant higher interest rates. This is especially true in light of the stronger than expected inflation and employment numbers lately. The Bank's decision, however, to maintain the policy rate at 1.0% reflects lingering concerns about the pass through of external developments on Canada's economy. Uncertainty about U.S. and Eurozone fiscal policy, and the likelihood that there will be significant steps made toward the resolution of their fiscal challenges to placate financial markets is keeping alive the potential for global risk premia to rise. Even with its superior economic and fiscal fundamentals, it is unlikely that Canadian financial markets will be able to avoid coming under pressure should this occur.

 

While these external risks bear watching, the Bank still expects Canada's economy to post stronger growth in the second half of 2011, supported by very stimulative financial conditions. Similar to the Bank, our base case forecast is that the global economy will avoid a replay of 2008's financial market crisis and ensuing economic recession. After growing at a projected 2% annualized pace in the second quarter of 2011, we forecast the economy will accelerate with real GDP rising at a 4% average annualized pace in the second half of the year. Backing out the Bank's second-half 2011 growth forecast based on its 2011 projection that the economy will grow by 2.8% in 2011 suggests that our forecast is for Canada's economy to grow at a stronger clip in the final six months of the year. More details of the Bank's quarterly projections will be in tomorrow's Monetary Policy Report.

The Bank acknowledged that inflation has been running hotter than expected. The core rate is likely to average 1.7% in the second quarter of 2011 and the headline rate at 3.5%, with the June data to be reported on Friday sealing the second quarter of 2011. The Bank expects that headline inflation rate will hold above 3% in the near term, with core inflation now expected to "remain around 2% over the projection horizon." Persistently higher than expected services prices were attributed with the firmer than expected core rate. The Bank maintained its assessment that the headline rate will converge to the 2% target in the middle of next year. To that end, the Bank indicated that with the expansion expected to continue and excess slack absorbed, some of the current policy stimulus "will be withdrawn." Looking ahead, some of the key international issues are coming to a head in the weeks ahead and will give the Bank a clearer view about the global outlook when it meets again in September. Our expectation that the global economy will avoid another crisis sets the stage for Canada's domestic economy to reaccelerate and for the Bank to make good on its promise to withdraw "some of the considerable monetary policy stimulus currently in place" with the case for a September hike supported by today's statement.

Cat: RBC Report

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REBGV June 2011 Housing Market Update

 

The Real Estate Board of Greater Vancouver (REBGV) housing market update for June 2011 with REBGV president Rosario Setticasi.

Cat: Vancouver Real Estate

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Condo rebound pushes new-home construction higher

 

Metro Vancouver builders have returned to building condominiums in a big enough way to push up the region’s overall housing starts this year while the number of single-family homes is declining, according to new numbers from Canada Mortgage and Housing Corp.

The pace of new-home construction in June declined from an unexpected frenzy of starts in May, according to Robyn Adamache, a Canada Mortgage and Housing analyst in Vancouver. However, the 8,472 total housing starts recorded in Metro Vancouver at the end of June represented a 23-per-cent increase from the same period of 2010.

Of those starts, 6,813 were multi-family homes — condominiums and townhouses — which was a 51-per-cent increase from starts during the same period of 2010. On the other hand, the 1,659 single-family-home starts for the same period represented a 30-per-cent decline.

Adamache said the post-recession recovery in housing construction began a year ago in single-family home building, but this year’s increase in multi-family construction reflects the confidence developers have that the economic recovery is on more solid ground.

“Builders are feeling more confident to start those larger projects now on the multi-family side,” Adamache said Monday. “They’re feeling like it’s not just a short-term change in the economy and things are really settling down.”

Overall, Adamache added that the factors that drive new-home construction — immigration, an improving job market and continuing low mortgage rates — are still strong enough to support the construction underway.

Adamache said Metro Vancouver saw a spike in the pace of housing construction in May that skewed provincial results, but that was likely due to the nature of stronger multi-family construction.

“[Multi-family] construction is very volatile,” she said. “It makes it look like things are swinging a lot from month to month when it really could be the difference of one or two projects [starting in a given month] if they are very large.”

As of the end of June, Adamache said builders around Metro Vancouver were on pace to start work on 15,700 new housing units by the end of 2011, which is close to Canada Mortgage and Housing’s forecast of 16,000.

The biggest increases in multi-family construction have come in Richmond and Surrey with some of the activity pushed along by same influence of immigrant and offshore purchasing that is affecting the overall real estate market.

Richmond recorded 1,185 multi-family housing starts in the first half of 2011 versus 458 for the first half of 2010, and total starts of 1,315 in 2011 compared with 595 in 2010.

Across B.C., the province’s urban centres saw 11,405 new-home starts in the first half of 2011, which was fractionally lower than the 11,475 in the same period of 2010.

Nationwide, home construction rose more than expected in June, led by a jump in single-unit activity, according to Canada Mortgage and Housing.

Nationally, the seasonally adjusted annual rate of housing starts was 197,400 units last month, up 1.7 per cent from a revised 194,100 units in May, CMHC said. The April figure was also revised to 194,100 units.

Economists had expected between 184,000 and 185,000 starts in June.

“Housing starts increased in June due to an increase in single and multiple starts in Ontario,” said Bob Dugan, chief economist at CMHC’s Market Analysis Centre.

“The revised numbers show that housing starts have been above their trend line since March,” according to Bob Dugan, Canada Mortgage and Housing’s chief economist. “However, we expect housing starts to move back toward levels consistent with demographic fundamentals in the near term.”

Cat: Vancouver Real Estate ( KCPQA6BZP3DZ )

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Home prices in B.C. to rise 13 per cent this year

B.C. home prices will rise an average 13 per cent to $571,000 this year before edging back 2.5 per cent to $557,000 in 2012, the B.C. Real Estate Association said in its second quarter housing forecast released Thursday.

The BCREA also predicted a moderate increase in housing sales this year and next.

However, the 13-per-cent increase in housing costs this year is misleading, according to BCREA chief economist Cameron Muir.  

“The average price in the province is being skewed very high because of a higher proportion of single-detached homes selling in the pricier markets of Vancouver,” Muir said in an interview. “This is at a time when sales are a bit below the 10-year average. My expectation is for quite flat prices going forward.”

Muir said that the average price in the Greater Vancouver area rose 26 per cent in May compared to May 2010, but that the benchmark price – the price of a typical home in the region – rose only about five per cent over the same period.

“This is a recent phenomenon,” Muir said of the discrepancy between the two price measurements. “The average price used to track the benchmark price pretty well.”  

According to the report, after declining 12 per cent in 2010, residential unit sales through the multiple listing service are forecast to rise five per cent in B.C. to 78,200 units in 2011 and a further three per cent to 80,700 units in 2012.  

However, the report also said that home sales will remain below their 10-year average of 87,600 units both this year and next.  

“Home sales will post some modest gains over the next two years,” Muir said. “However, positive housing fundamentals like job growth, rising wages and an expanding population base will be somewhat offset by higher borrowing costs over the next eighteen months.”

He said a record 106,300 residential sales were recorded in 2005.

For Greater Vancouver, the report noted that sales — after declining 14 per cent to 31,144 units in 2010 — are forecast to rise 8.5 per cent to 33,800 units this year.  

It said that total housing starts in Vancouver are forecast to increase 6.5 per cent to 16,200 units in 2011 and another two per cent to 16,550 in 2012.

The average price in the Vancouver area is forecast to rise 17.6 per cent in 2011 to $795,000 and then drop three per cent in 2012 to $770,000.  

Muir noted that the average price in the south Okanagan is forecast to drop five per cent in 2011 to $304,000, the same percentage drop as the Kootenay region, where the average price is forecast to drop to $260,000.  

© Copyright (c) The Vancouver Sun

Cat:Vancouver Rental Real Estate

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Real Estate Board of Greater Vancouver Stats Package June 2011

Summer housing market trends toward balance after an active spring season

VANCOUVER, BC – Home sellers outpaced buyers on Greater Vancouver’s Multiple Listings Service® (MLS®) in June, drawing the market back toward balance this summer.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales of detached, attached and apartment properties reached 3,262 in June, a 9.8 per cent increase compared to the 2,972 sales in June 2010 and a 3.4 per cent decline compared to the 3,377 sales in May 2011.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,793 in June. This represents a 4.5 per cent increase compared to June 2010 when 5,544 properties were listed for sale on the MLS® and a 2.3 per cent decline compared to the 5,931 new listings reported in May 2011.

Last month’s new listing total was 9.8 per cent higher than the 10-year average for June, while residential sales were 7.3 per cent below the ten-year average for sales in June.

“With sales below the 10-year average and home listings above what’s typical for the month, activity in June brought closer alignment between supply and demand in our marketplace,” Rosario Setticasi, REBGV president said. “With a sales-to-active-listings ratio of nearly 22 per cent, it looks like we’re in the upper end of a balanced market.”

 

At 15,106, the total number of residential property listings on the MLS® increased 3.1 per cent in June compared to last month and declined 14 per cent from this time last year.

The MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver over the last 12 months has increased 8.7 per cent to $630,921 in June 2011 from $580,237 in June 2010.

“The largest price increases continue to be in the detached home market on the westside of Vancouver and in West Vancouver,” Setticasi said. “Since the end of May, the benchmark price of a detached home rose more than $147,000 on the westside of Vancouver and over $80,000 in West Vancouver. Detached home prices in Richmond, however, levelled off slightly, declining $25,000 in June.”

Sales of detached properties on the MLS® in June 2011 reached 1,471, an increase of 29.1 per cent from the 1,139 detached sales recorded in June 2010, and an 11.8 per cent decrease from the 1,667 units sold in June 2009. The benchmark price for detached properties increased 13.4 per cent from June 2010 to $901,680.

Sales of apartment properties reached 1,266 in June 2011, a 0.6 per cent increase compared to the 1,258 sales in June 2010, and a decrease of 29.3 per cent compared to the 1,790 sales in June 2009. The benchmark price of an apartment property increased 3.5 per cent from June 2010 to $405,200.

Attached property sales in June 2011 totalled 525, an 8.7 per cent decrease compared to the 575 sales in June 2010, and a 34.5 per cent decrease from the 802 attached properties sold in June 2009. The benchmark price of an attached unit increased 6 per cent between June 2010 and 2011 to $522,424.

 

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Cat: Vancouver Real Estate

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Canadian Mortgage rates on the rise

 

OTTAWA — CIBC and Bank of Montreal announced Tuesday that they will be raising their mortgage rates.
CIBC raised the rates on fixed-rate mortgages, following other major Canadian banks that did so Monday.
CIBC raised rates on closed mortgages by 0.10 to 0.15 percentage points, with the popular five-year closed option rising 0.15 per cent to 5.54 per cent, in line with the new rates announced by Royal Bank, TD Canada Trust and Laurentian Bank on Monday.
CIBC's new rates become effective Wednesday.
BMO Bank of Montreal also announced its changes in residential mortgage rates, effective Wednesday.
A five-year fixed rate closed is going up to 5.54%, a 0.15% increase.

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Cat: Canada Real Estate