A signal from the Bank of Canada that it is not raising its key lending rate any time soon, coupled with the likelihood of falling mortgage rates, could be enough to keep the latest housing rally going.

There have been signs the housing market is in recovery mode with year-over-year sales rising in many markets, albeit generally below 10-year averages. Analysts have called it a short-term blip caused by consumers rushing to buy to take advantage of pre-approved mortgages signed 120 days ago when long-term rates were lower.

But with the Bank of Canada signaling Wednesday it won’t be raising rates — its neutral stance could even mean lower rates — consumers can safely slide back into variable mortgages tied to prime which tracks the central bank rate.

The short-term rate option and the possibility long-term rates will follow has people worried the market may be recovering too fast for the taste of Ottawa, leaving Finance Minister Jim Flaherty with no choice but to tighten lending rules again.

“It’s possible interest rates will go down,” said CIBC deputy chief economist Benjamin Tal, adding there’s a huge amount of mortgage debt already in the pipeline that was created when people took advantage of rates they were pre-approved for in the summer. “I’ve seen what is in the pipeline in mortgage activity and you won’t believe the numbers when it is official.”

With no panic to buy, the question is whether people will be encouraged to continue to take on more debt or slow down their spending if the economy slows?

“If we don’t get the softness we are expecting [in housing], quite frankly I think they are already talking about more restrictions,” said Mr. Tal, adding that would be the only option to slow the housing market if Ottawa is reluctant to raise rates.

Kelvin Mangaroo, president of RateSupermarket.ca, says long-term mortgage rates have so far not followed recent reductions in bonds yields, making the variable rate look all the more attractive.

He says the lowest variable rate mortgages on a five-year term is now 2.4% which compares with 3.34% for a five-year fixed closed mortgage. The major banks are still offering 3.89% for a five-year fixed rate closed mortgage.

“The rule of thumb is people start looking at variable when there is a one percentage point spread between five-year variable and five-year fixed,” said Mr. Mangaroo. “We might have more people looking variable with the latest Bank of Canada news.”

Most of the banks and Ottawa have taken great pains to get people to lock in the mortgage rate so they won’t be vulnerable to a spike in interest rates. Changes to mortgage rules even allow you to borrow more, as long as you lock in for five years or longer.

York University Prof. Moshe Milevsky said historically there is usually a much larger gap between long-tern rates and short-term rates which were almost the same earlier this year. He’s not sure people will flock to variable immediately.

“It’s not as much demand side with the consumer deciding. The banks can push aggressively on variable. Sometimes it’s about how the mortgage broker is compensated. There are two sides to the transaction. The consumer is educated when they make the decision,” he says.

While Mr. Milevsky is hesitant to make any prediction on the housing market because so many people have been so wrong for so long, he does have a suggestion for anybody worried about what type of mortgage to take out today.

“I continue to marvel at why people go all fixed or all variable,” says the professor, adding while banks don’t promote the option, you can ask that half your mortgage be long-term and half be short-term. “If I was consulting the banks, and I’m not, their advertisement campaign should be “hedge your mortgage debt, do both’.”

Phil Soper, chief executive of Royal LePage Real Estate Services, thinks it’s reasonable to believe people will move back to variable but probably not enough to cause concern about the housing market.

“Look across the country and many regions are not Toronto,” said Mr. Soper, who cautions government policy should not be based solely on the hot real estate market in Canada’s largest city.

Source: Garry Marr, Financial Post

Quadrilaterals, cubes, polyhedrons … sound like 10th grade math class?

Perhaps, but they’re also examples of one of this fall’s biggest trends in home decor. Crisp, contemporary and pleasing to the eye, geometrics work well for tables, lighting, accessories and soft furnishings.

Nate Berkus is a fan of these modern motifs, as his fall collection at Target attests. One of his favorites is a wall-mounted art piece made of hexagonal metal. His inspiration came out of a trip to a gem and mineral show, where he saw a table of crystallized honeycombs.

“They were breathtaking,” he said.

A series of polyresin marble trays are emblazoned with a scattering of rhombuses. Check out the zig-zagged enamel photo frames here as well. (www.target.com)

Restoration Hardware’s curated “Curiosities” collection includes some Belgian “maquettes” – wooden scale models used to teach architecture. The large polygonal star or pyramidal cone would make a striking accessory. (www.restorationhardware.com)

Canadian design duo Gabriel Kakon and Scott Richler have created the Welles light fixture, a cluster of blackened steel polygons with interiors available in nickel, brass or copper. (www.gabrielscott.com)

Also in lighting, Seattle-based design house Iacoli and McAllister offers open-framed rhomboid pendants, available in different configurations, crafted in metallics as well as fun, powder-coated colors like tomato, blue and white. (www.iacolimcallister.com)

Ridgely, a Toronto studio, welds cut steel rods into crisscross shapes on screens that can be left raw or powder-coated with several different colors. They can be used as room or landscape dividers, or as wall art. (www.ridgelystudioworks.com)

Flor.com has a range of carpet tiles that replicate graphic patterns like zigzags and rectangles. (www.flor.com)

At www.overstock.com , circles are the focus on the Metro wool rug, with disc shapes in vibrant fall shades of rust, olive and steel blue on a charcoal background. The retailer’s Ivory Geometric Circles rug has a midcentury vibe with concentric seafoam, magenta, gold and olive swirls on a background of cream.

Another Canadian talent, Renato Foti, makes tables, accessories and other home decor elements out of colored glass; his Martini tables and Geo Square basins feature geometric shapes embedded in the hand-worked glass. (www.triodesignglassware.com)

New York designer Jill Malek’s Voyageur wallpaper takes non-Euclidean geometry to the next level, with a range of papers printed with lines radiating from points, like a compass gone wild. They’re available in several color combinations, including Red Eye (white on black) and CandyLand (white on red). Her Luci Della Cita wallpaper evokes city lights at night, with spherical shapes playing across a moody, out-of-focus background. (www.jillmalek.com)

You can solve for “x” with one of Modshop’s side tables, with zebrawood, hickory, rosewood or oak veneer tops on sleek, chrome, X-shaped legs. (www.modshop1.com)

Finally, if you’re the crafty type, check out Brett Bara’s tutorial on creating your own geometric patchwork wall art using triangle fabric shapes in an Ikea frame. It’s so simple that you’re guaranteed an easy “A” in this geometry class, at least.

Source: Brett Bara, Miami Herald

With a love of paisley and an affinity for mixing florals and stripes, Sarah Richardson has plenty of passion for prints that often accent rooms she helps refurbish.

The designer has brought her own distinct imprint to a new collection of about 70 fabrics for Kravet, which manufactures fabrics sold to the trade. It’s a project two years in the making she describes as a “huge dream come true.”

“What I love about fabric is it covers all the surfaces,” says Richardson, host of the new HGTV Canada series Real Potential. “It’s what you sit on. It’s what you touch and it’s what you interact with every day.

“Anyone who knows my work knows I love patterns and prints and combining a collection of different fabrics together.”

For those looking to refresh their decor heading into fall, Richardson shares tips for selecting the right hues and ways to pair fabrics and colours within a designated space.

1. Determine your design esthetic

When it comes to decorating a space, Richardson says people often ask what the best way is to create a “jumping off point” for a room.

For those ready to make the leap, she recommends finding a fabric that appeals to their individual style sensibility. This not only helps to narrow the focus on choosing the right hue, but can also help to drive the decor direction in the rest of the space, such as those who may be looking to drench walls or coverings in a fresh colour.

“I always think that you should zone in and see if you like the colours,” Richardson says.

She says she always strives to balance contemporary and traditional elements within each room she designs, a mantra she applies in selecting fabrics featuring contrasting styles within a shared space.

2. Opt for a neutral foundation

Selecting a combination of neutrals as a base for large-scale furnishings is safe and timeless.

“You know you can live with it. It’s not like doing a hot pink sofa that you know you may not love next year.”

She says there has been a shift away from beige, oatmeal and flax-toned hues as the prime neutrals.

Heading into fall, expect to see grey emerge as the big colour and neutral alternative, she adds. Richardson recommends pairing the smoky shade with soft yellow for a “fresher take” on neutrals, mixing cool and warm colours within the room.

“I tend to look to the natural landscape for all of my inspiration for palettes and for combinations.”

3. Select a standout colour

Primed to add colour to help enliven staid surroundings? By keeping big-ticket items like chairs, sofas, drapes and any other items with longevity in neutral hues, Richardson recommends opting for a lone hue as an accent to inject into the room.

“Choose one colour that you want to add to layer in to bring your neutral palette to life, and you’ve made a great dynamic statement.

Source: Lauren La Rose, Canadian Press

Housing sales surged 63.8 per cent in Greater Vancouver last month as the area’s real estate market regains its footing.

There were 2,483 homes sold on the Multiple Listing Service in September, up from 1,516 sales in the same month last year, the Real Estate Board of Greater Vancouver said Wednesday. “There is a lot more confidence in the Vancouver market now,” board president-elect Ray Harris said in an interview.

The increased activity marks the fifth consecutive month that Greater Vancouver has experienced a year-over-year gain in monthly sales, following a 19-month slump in volume.

Greater Vancouver’s benchmark index price for single-family detached homes, condos and townhouses fell 0.7 per cent year-over-year to $601,900 last month, but has increased 2.3 per cent since January.

In Vancouver’s closely watched west side, the index price for single-family detached sales last month was $2,089,700, up $1,000 from September, 2012. While that is an increase of only 0.05 per cent, it marks an improvement from January, when the West Side’s detached index price dropped 7.5 per cent year-over-year.

A balanced market has emerged, with buyers in a calm state of mind instead rushing to do deals, Mr. Harris said. On the selling side, baby boomers thinking of downsizing by listing their detached homes aren’t hurrying to move since prices are expected to be relatively healthy, he said.

The total number of active listings on the MLS was 16,115 last month in Canada’s most expensive housing market, down 12.2 per cent from a year earlier.

Mr. Harris said Greater Vancouver’s resale housing prices could increase roughly 3 per cent over the next 18 months to two years – a stable outlook that should contribute to sales volume staying near historical averages. Last month’s sales were 1 per cent below the 10-year average of 2,509 for September.

The sales-to-active-listings ratio was 15.4 per cent in Greater Vancouver last month. B.C. real estate agents consider it a balanced market when the ratio ranges from 15 to 20 per cent.

Vancouver’s West Side has seen its index price for single-family detached homes jump 40 per cent over the past five years, but suburbs such as Port Coquitlam haven’t undergone such volatility, Mr. Harris added. Port Coquitlam’s detached property index price is up 6.3 per cent over the past five years.

As well, the region’s condo market hasn’t experienced huge price gains. Greater Vancouver’s condo prices have risen 1.9 per cent since 2008. Sales jumped 32 per cent last month in the Fraser Valley, which includes the sprawling and less-expensive Vancouver suburb of Surrey.

There were 1,131 properties that changed hands on the MLS, up 32 per cent from 857 sales in September, 2012. Last month’s benchmark index price in the Fraser Valley slipped 0.2 per cent year-over-year to $428,400.

Fraser Valley Real Estate Board president Ron Todson said he sees signs of first-time buyers returning to the market, though it has become more expensive to obtain financing due to the recent rise in mortgage rates. The residential property market is gradually recovering from Ottawa’s tightening of mortgage rules in 2012, he said.

In July, 2012, Ottawa reduced the maximum period on government-backed mortgages to 25 years from 30 years. Real estate experts say the change, which knocked some first-time buyers out of the market, contributed to the slowdown in housing sales a year ago.

Source: Brent Jang, The Globe and Mail

Condo shopping can be overwhelming – a pre-shopping checklist can help limit your stress and visits to show homes.

To create such a list, start by visiting presentation centres and model units in person. Although the Internet is a great place to do some basic research, you will learn much more by assessing the quality of materials and construction in person. This will also give you a chance to ask your questions and evaluate the quality of the responses you get. Be consistent with the questions you ask in the showrooms so you can make accurate comparisons.

When visiting, try to speak with the show home’s specialist who assists buyers with their design choices, as they are often present. Take advantage of their expertise regarding upgrades and options. This will be helpful even if you eventually settle on another development.

Before visiting, make a list of those amenities that are important to you and that you are likely to use. Remember, the cost of amenities is embedded in the condo price and the cost of maintaining them in the condo fees.

Some questions to be answered:

• Who is buying units in the condo — singles, couples, students, young families, retirees? This will determine the condo’s culture. Be careful if the units are being sold to investors as rental units; tenants as a group may be less invested in keeping the property up and more frequent turnover will subject the common areas to wear and tear.

• Consider “curb appeal.” Is impressing your visitors with a beautiful facade, entry foyer and other common areas important to you? Not every condo owner cares about the width of the corridors or the decor in the elevators, but many do.

• Is there adequate and convenient visitor parking? A good way to deter friends from coming by is making parking difficult.

• Are the elevators fast and adequate for the size of the building? This is particularly important if you want to be on a higher floor.

• Parking is key. Consider ease of access, adequate space for your car and ease of egress into traffic. Fighting your way into rush-hour street traffic can get old quickly; on the other hand, you may be on a schedule that lets you avoid rush hours.

• It may be wise to purchase a parking space or two even if you don’t have cars — they can become more valuable over time and can always be sold. Parking spaces can be significant inducements when reselling.

• Check out the storage lockers for size, location and internal organization. You don’t want to have to unpack the whole locker just to get at your suitcases in the back.

• Location, location, location. As for all real estate, condo location is paramount. However, there are many factors that determine the value of a given location to a given purchaser. Convenience generally plays a significant role and convenience is a very personal thing. Some of the following points will help clarify this.

• When examining floor plans and fact sheets, make sure you understand the positives and negatives of the layout. If you have trouble visualizing this, educate yourself by quizzing the people representing the various developments about their layouts. You will soon be doing this automatically when you see a floor plan.

Flow is very important, especially if you are used to bigger spaces. Make sure the room sizes meet your requirements. This should include the kitchen, which needs to be more comprehensive if you plan to cook or entertain. Of course, some facilities have beautiful entertaining spaces and catering services. You might prefer this format.

• If cooking is a priority, find out which appliances are included and check them out. If they don’t measure up you may need to upgrade.

• Is a balcony important and will you actually use it? If you plan to garden, make sure you know the rules governing your balcony use. If you have no interest in balcony living, smaller is better than larger as it will save you money and upkeep.

• Are your critical amenities readily accessible? Of course, accessibility will depend on your level of mobility — committed walker, cyclist or driver. Some may require facilities within their condo complex.

• Make sure you know how bright your condo will be and determine how important this is to you. Orientation of principal rooms and window height are the two biggest factors.

• Does the level of security offered meet your expectations? This applies to building access, garage surveillance, and elevator and corridor security.

• Concierge service is both a security and a convenience factor. What will the concierge do for you and during what hours? If you travel a lot, this becomes more important — who accepts the deliveries and brings in the mail?

• What are the rules about pets, both yours and neighbours? How long does it take to get Fido to the grass and what do you do in winter? Or perhaps you don’t want to interact with pets on a regular basis.

• Is the condo on a flight path or adjacent to high tension transmission lines? This may not be important to you personally but may become an important issue on resale.

• Are there lighted recreational facilities nearby that may generate noise in the evening?

• Are there local events such as exhibitions or sports events that may overwhelm traffic circulation intermittently?

Source: Marilyn Wilson, Marilyn Wilson Dream Properties Inc., Ottawa

Buyers from China, Russia, the Middle East, India and the United States are expect to be among those looking for high-end homes in major Canadian cities during the fall, says leading agent Sotheby’s International Realty Canada.

Over the year to June, sales of luxury homes worth at least CAN $1-million have risen, according to the newly-published Top Tier Report.

Single family homes in the first half of 2013 compared with the same time last year, worth more than CAN $1-million have risen by 10% in Calgary, 6% in Montreal, 5% in Toronto and are down 2% in Vancouver. Most property sold was worth between CAN $1-4-million.

Sales of townhouses worth more than CAN $1-million were up 73% year-on-year in Calgary and 21% in Toronto, but were down 8% in both Vancouver and Montreal.

But year-on-year condo sales were down in all areas, falling 37% in Calgary, 20% in Vancouver and 19% in Toronto and Montreal.

Sotheby’s President and Chief Executive Ross McCredie says, “In examining the performance of the high-end market, we feel confident that Canada’s largest urban centres remain in exceptional positions heading into fall, with healthy market fundamentals from coast to coast.”

Despite the annual fall in condo sales, many overseas buyers are still actively looking to buy.

Elli Davis, a Sales Representative from Royal LePage, Toronto, says many foreigners buy condos for their children to live in while they attend school in Canada.

“I’m seeing a lot of foreign names on showings of all of my listings. More foreign names than not.”

Canadian buyers have lagged a little behind international demand, says the bi-annual report that is claimed to be the only Canadian study that compares data for residential properties with values over CAN $1-million.

“The performance of Canada’s high-end residential real estate market in the first half of 2013 reflected a year of recalibration and overall strength.

“While international demand for luxury real estate in the major urban centres of Vancouver, Calgary, Toronto and Montreal had been consistently strong leading into 2013, Canadian buyers had taken time to adjust to the precautionary lending controls implemented by the Bank of Canada in July 2012.

“By June 30, 2013, sales data for the first half of 2013 reflected positive momentum in key markets compared to the last half of 2012, with variations between condominiums, attached homes and single family homes, as well as between price segments above the $1-million mark.

Mr McCredie says investors of luxury home are unlikely to be put off by short-term market fluctuations. “They’re not first-time homebuyers. They’ve seen cycles before. Most of our clients remember what it was like in the early 80s and the early 90s, when you had major corrections, so they’re not going into these markets blindly.”

In Vancouver, sales are now picking up, the report claims. The city saw 1,239 sales of homes over CAN $1-million in the first six months of the year. “Buyers are beginning to gain more confidence when making big purchase decisions and those who initially put their decision to buy on hold are now coming back on the market.”

Calgary saw 388 sales over $1 million from 1 January to 30 June. “Calgary’s high-end residential real estate market continues to display strong market fundamentals, setting records in the first half of 2013 while experiencing both a steady rise in sales volume for homes over $1-million and a strong decline in days on market for key segments compared to 2012.”

Toronto got off to a faltering first three months, but recovered later and sales of prime homes reached 2,947.

The Montreal market is stable, but there were no sales of single family, attached and condominium properties over CAN $4-million within the first half of 2013, the report admits.

Source: OPP Connect

A Middle Eastern royal’s purchase in May of the penthouse suite and unit below it at Vancouver’s five-star Fairmont Pacific Rim hotel for $40 million was the most expensive condominium purchase in Canada.

The hotel is in Coal Harbor, a community in Vancouver West, one of Canada’s most expensive home-buying areas. The property is one block north of a street that residents in the 19th century called Blueblood Alley for its wealthy mansion-owners.

“Vancouver has been fuelled tremendously in the last couple of years by high-end wealthy Chinese and Hong Kong buyers,” Malcolm Hasman, the luxury real estate agent who brokered the sale of the Fairmont penthouse unit to the Middle Eastern client, said in a Sept. 16 phone interview. This year probably will be Hasman’s third-highest in sales, after 2012 and 2007, with more than $200 million in luxury real estate sold, he said.

“There’s more money around today than there’s ever been in the high-end market. And where’s it coming in from? The Middle East, China, Asia.”

The oceanfront apartment was also among about 131,324 house and condo transactions in the past three months, up 6.1% from the same period a year earlier and defying the predictions of the Toronto Real Estate Board and the Bank of Montreal that the market is cooling. Analysts and investors including Bank of Nova Scotia and Sun Life Financial Inc. now say it represents the excesses of a market that may be peaking.

“I’m not bullish on Canadian housing,” said Stephen Groff, who helps oversee $7 billion in assets at Cambridge Global Asset Management unit of CI Investments Inc., in a Sept. 13 interview. “It’s just people seeing rates starting to go up and they rush to get the deal done. It isn’t indicative of an improving market.”

The sales pop, driven by wealthy foreign investors and Canadians jumping into the market before expected mortgage rate increases, is at odds with Canada’s sluggish growth. Fuelled by consumers carrying record levels of personal debt and a high unemployment rate, there’s growing concern that the housing decline when it comes will be harder than the “soft landing” predicted by Bank of Canada Governor Stephen Poloz and Scotiabank Chief Executive Officer Richard Waugh.

Purchases of multimillion-dollar luxury properties on the west coast and condo units in Toronto’s 260 towers helped drive debt-to-household income to a record level in the second quarter. Mortgage borrowing rose 1.7% to $1.11 trillion, according to Statistics Canada, and debt such as mortgages and credit cards increased to 163.4% of disposable income, compared with a revised 162.1% in the prior three-month period. That’s among the highest in the world and compares with 91.9% in the U.S., down from a record 112.7% in 2009.

Home buying slowed last year after regulators tightened borrowing qualification standards. It has picked up again as consumers take advantage of historically low mortgage rates.

The government shortened amortizations in July 2012 to 25 years from 30 years as benchmark interest rates continue to be anchored at 1% in the longest pause since the 1950s. The Office of the Superintendent of Financial Institutions also introduced tougher standards for lenders.

The result of the efforts was short-lived. In August last year, home sales slipped 14% across the country led by Vancouver’s 31% dip, according to data from local real estate boards. The total values of August, 2012 purchases was 24% lower than this year’s $8.2 billion.

In comparison, Toronto residential real estate sales last month rose 21% from a year ago, according to the Toronto Real Estate Board, or TREB, and Vancouver existing home sales surged 53%, said that city’s board.

Source: Katia Dmitrieva, Bloomberg News

Sales of single-family homes over $1 million were up 65 per cent in the first half of 2013, up from the last half of 2012.

According to the report, Calgary was the only Canadian city to surpass Vancouver, with sales up 67 per cent in the same category, as reflected in the recent Top Tier Real Estate Report. Luxury condo sales over $1 million were up in Vancouver, Calgary and Toronto, compared to the last half of 2012, and spent fewer days on the market.

“We feel confident that Canada’s largest urban centres remain in exceptional positions heading into fall, with healthy market fundamentals from coast to coast,” says Ross McCredie, president and CEO of Sotheby’s International Realty Canada.

Foreign buyers make up approximately 40 per cent of luxury single-family home buyers in Vancouver, according to Sotheby’s International Realty Canada’s Top Tier Trends study (April 2013). This trend is expected to continue with China remaining the top market influencer, followed by Iran and the United States.

“A lot of people have this perception that people are getting off an Air China flight and are buying these million-dollar properties and that is an incredibly rare event. What you are seeing is second or third generation Chinese,” says McCredie. “That’s been a trend that has gone on for a long period of time and it’s going to continue in the Vancouver marketplace.”

Another trend that has continued in Vancouver is parents buying condos for their children. According to McCredie, the transfer of wealth between generations in Canada is unprecedented.

“For a young family trying to start out in Vancouver, there is almost no chance that they could do it on their own,” he says.

The report also attributes an uptake in sales to a steadied political and economic environment, following May’s provincial election. Many Sotheby’s clients were worried a change of government would not be positive for the province’s economy, he says.

While Vancouver’s high-end real estate is up in the first half of 2013 compared to the last half of 2012, condo sales 2013 were down by 20 per cent compared to the first half of 2012. McCredie attributes this to a couple of high-profile projects that were deeply discounted last year, spooking potential buyers. Talk of the real estate market being overheated didn’t alleviate buyers’ worries.

McCredie is confident that sales will continue to grow this year and says that there isn’t anything worrying the real estate industry at this point in time. In fact, he believes that Canada has one of the healthiest real estate markets in the world.

“When you look at the Canadian real estate fundamentals it’s one of the healthiest real estate markets in the world,” he said. “All Canadian cities are growing and we have very low vacancy rates in almost all of our cities. So when you have all those different dynamics, it speaks to a healthy market.”

Source: Nicole Clark, BC Business

Home sales in two of Canada’s largest cities continued their surge in August from a year earlier.

Sales in Toronto, the largest market, rose 21% from August last year to 7,569 units, the Toronto Real Estate Board said in a statement Thursday, with average prices gaining 5.4%. Vancouver existing home sales rose 52%, that city’s real estate board said Wednesday.

Housing-market data are showing few signs of a hard landing after warnings from economists and policy makers that a bubble may have been forming. Buyers have adjusted to tighter mortgage rules imposed last year, according to Diane Usher, president of the Toronto realtor group.

“Many households have accounted for the added costs brought on by stricter mortgage lending guidelines and have reactivated their search for a home,” User said in today’s statement.

Other regions and cities recording double-digit sales gains in August include Victoria and the Fraser Valley areas of British Columbia, and Calgary.

The average price of a home sold in Toronto was $503,094 in August, the Toronto realtors group said Thursday.

There are signs the country’s housing market may be losing some steam. Existing home sales recorded their smallest monthly gain in five months in July, the Canadian real estate association said Aug. 15. Banks including Royal Bank and Toronto-Dominion, the two largest lenders, also have raised mortgage rates in recent weeks to reflect higher yields in the bond market.

The Canadian Real Estate Association publishes aggregated national data around the middle of each month.

Source: Theophilos Argitis, Bloomberg News

Greater Vancouver home sales roared ahead 52 per cent last month, raising the prospect of a new phase of stability in Canada’s most expensive housing market.

The number of properties sold on the Multiple Listing Service reached 2,514 in August, up from 1,689 sales in the same month a year earlier, the Real Estate Board of Greater Vancouver said Wednesday. The increased activity marks the fourth consecutive month that Greater Vancouver has experienced a year-over-year gain in monthly sales, following a 19-month slump in volume.

The rebound is a sign that fears of a possible housing market crash in the Vancouver region appear overblown.

Greater Vancouver’s housing market is gradually on the mend after the 19-month decline in year-over-year resale volume from October, 2011, to April, 2013, said Tsur Somerville, a professor at the University of British Columbia’s Sauder School of Business.

Some buyers in August signed up in advance for mortgages before rates crept up, but interest rates remain relatively low, Prof. Somerville said. “Trying to time the market is really hard,” he said. “I’m not expecting any kind of raging growth market in Vancouver housing. We’re in an environment of a perception of more hikes in interest rates coming and the economy isn’t that strong.”

The benchmark MLS price index in Greater Vancouver for single-family detached homes, condos and townhouses was $601,500 in August, down 1.3 per cent from the same month in 2012. Since January, however, the price index has risen 2.3 per cent.

Dustin Strong, 34, a territory manager in Vancouver for a food distributor, is looking to buy a home with his girlfriend, Sarah. “We’re patiently waiting and watching,” he said. “Prices have been overheated, and you weren’t getting good value for the money. But I don’t think a crash would be a good thing because that would have catastrophic consequences for the economy.”

Mr. Strong said he is being realistic about what is attainable, so a townhouse is on the shopping list. Greater Vancouver’s price index, which strips out the most expensive properties, was $923,700 for a single-family detached home in August, compared with $457,000 for a townhouse and $366,100 for a condo.

“It’s a constant analysis for me,” Mr. Strong said, adding that it would be ideal to have a minimum down payment of 10 to 20 per cent of the purchase price.

While buyers rushed back into Greater Vancouver’s housing market, the increased sales came after a weak period in the summer of 2012. In July last year, the federal government reduced the maximum period on government-backed mortgages to 25 years from 30 years. Real estate experts say the change, which knocked some first-time buyers out of the market, contributed to the slowdown in housing sales in Vancouver in August of 2012.

Sales volume last month was still 4.6 per cent below the 10-year average for August.

Board president Sandra Wyant said this summer’s housing market has been much more hectic than it was in 2012, but she doesn’t expect a return to widespread bidding wars. “Buyers and sellers need to recognize that this is an increase in sales. Some buyers might be getting apprehensive that prices are about to surge, but this is a balanced market with stable prices,” Ms. Wyant said.

A measurement closely watched by the real estate industry, known as the sales-to-active-listings ratio, registered 15.7 per cent in Greater Vancouver last month. B.C. real estate agents consider it a balanced market when the ratio ranges from 15 to 20 per cent. It is deemed a buyer’s market below 15 per cent and a seller’s market above 20 per cent in the Vancouver region. There were a total of 16,027 active listings last month, down 8.8 per cent from a year earlier.

In the B.C. Fraser Valley, 1,258 residential properties sold in August, up 17 per cent from same month in 2012. The MLS home price index dipped 0.6 per cent year-over-year in the Fraser Valley, which includes the sprawling and less-expensive Vancouver suburb of Surrey.

Source: Brent Jang, Globe and Mail