July proved to be a another strong month for Canadian home sales with the Canadian Real Estate Association now predicting 2011 will see an increase in sales as opposed to a previous forecast for a drop.

Actual sales last month were up 12.3% from a year ago while year-to-date sales are 1.6% lower than the same period for 2010.

Prices also continue to have some upward movement, albeit some of the increase year over year being attributed to the introduction of the HST in British Columbia and Ontario, and tighter mortgage regulations in 2010.

The national average price for homes sold in July 2011 was $361,181 — the lowest level since January — but represented a 9.3% increase from a year ago.

Greg Klump, chief economist at CREA, cautioned not to read too much into the average price statistics.

“Changes in the national average home price are open to being misinterpreted,” Mr. Klump said. “They often signify changes in the mix of sales activity across and within local markets, rather than a rising or falling price trend for typical homes in a specific market.”

However, the Ottawa-based group, which represents 100 boards across the country, says the scales have now tipped modestly in favour of 2011 outpacing 2010.

CREA is predicting 450,800 sales in 2011, just under a 1% increase from a year ago. The group had been forecasting a decline of 1%. Sales are expected to drop less than 1% in 2012.

Prices in Vancouver continues to affect the country as they helped pushed CREA’s forecast for the average sale price in 2011 to $363,500, a 7.2% increase from a year ago. This was also an increase from a previous forecast. Next year prices are expected to be flat.

The group noted long-talked-about increases in interest rates have failed to materialize in the market.

“While there had been some talk of potential interest-rate increases, that hasn’t happened,” said Gary Morse, president of CREA. “In fact, rates have actually come down, and are now expected to remain low for the remainder of this year and into 2012.”

Doug Porter, deputy chief economist at Bank of Montreal, said the housing market just seems to keep surprising everybody.

“In a world seemingly awash in negative economic surprises in 2011, one positive surprise has been the resiliency of Canada’s housing market,” said Mr. Porter, adding few analysts were predicting the kind of price increases the market has seen.

“Canadian housing remains surprisingly robust, thanks to still low interest rates and solid job growth. While the recent financial market turmoil may temporarily weigh on activity, sales should ultimately find support from continued exceptionally low borrowing costs.”

Phil Soper, chief executive of Royal LePage Real Estate Services, said his company’s recent forecast was for a 2% decline in sales and 3% increase in price for 2011. He doesn’t anticipate that changing.

“I think we’re going to start to see it’s not so much the strength of the market but the weakness last year. The market had run out of steam at this point last year,” Mr. Soper said. “I think we are seeing a more normal curve to the market, with the exception of the Vancouver market.”

Source: Garry Marr, Financial Post

The value of building permits in Canada soared in May after plunging the previous month, with non-residential activity again leading the swing.

Statistics Canada said Wednesday that permits jumped 20.9-per-cent during the month to US$6.4-billion, following a revised 21.5-per-cent drop in April.

The federal agency noted that higher construction intentions, particularly for commercial buildings in Quebec and Alberta and multi-family dwellings in Ontario, were behind the advance.

Economists had expected permits to rise by three per cent in May.

“While the increase, the largest in over two years, came in well above expectations, it simply reverses the preceding month’s surprisingly sharp decline,” said Peter Buchanan, at CIBC World Markets.

“The residential numbers are consistent with our call for a deceleration in that sector, while the strong rise in non-residential applications points to continued strength in business investment, one of the economy’s main drivers in Q1.”

Non-residential permits rose by 50.9-per-cent to $2.7-billion, following two straight monthly declines, with most of the activity focused on commercial developments in Quebec, Alberta and Ontario.

The residential sector increased 5.3-per-cent to $3.7-billion, after a 12.1-per-cent drop in April. Multi-family unit intentions in Quebec and Ontario accounted for much of the gain.

Karen Cordes Woods, at Scotia Capital, said [residential] housing permits have been declining as the Canadian housing markets start to moderate after reaching record levels or cycle tops in several housing metrics, including homeowner affordability, house prices and renovation spending.

Source: Financial Post

Canada’s central bank may need to keep interest rates low as the economy faces “substantial headwinds,” Bank of Canada Governor Mark Carney said in an interview published on Friday.

“Monetary policy may still need to be stimulative in order to close the output gap and in order to get inflation back to target,” Carney is quoted as saying in an interview with the Wall Street Journal.

The bank has kept its key interest rate on hold at 1 percent since last September, after lifting the it from a rock-bottom 0.25%. Its next rate decision is July 19.

Most market players surveyed by Reuters on May 31 forecast the bank would resume rate increases in September, but some have since pushed their forecasts even further out.

Carney named the U.S. economic slowdown and the strong Canadian dollar as two major factors that could hinder Canada’s economic expansion.

“We see the headwinds both in our export performance and in the inflation data,” he said, referring to the currency.

The Canadian dollar is currently trading around $0.98 to the U.S. dollar, or US$1.02.

Carney said the bank may not need to raise rates to a “neutral” level just as the economy reaches its production capacity, and repeated the idea that the neutral rate, which he declined to specify, might be lower than it was before the global financial crisis.

Carney has raised concerns in recent comments about possible overheating in the Canadian housing market, where prices in some cities, such as Vancouver, have skyrocketed.

Higher short-term interest rates could be a tool to curb high housing prices, he said, but he added that regulatory action should be the first option.

Chinese investors are grabbing everything from US$68,000 foreclosed condominiums in Florida to US$2-million beachfront villas in Vietnam, a buying spree fueled by China’s surging wealth that mirrors the country’s expanding influence in markets for gold, oil and food. The search for overseas property accelerated in the past seven months as the governments in Hong Kong and Beijing imposed purchasing and financing limits, steps that are starting to cool off domestic markets.

Buyers from China have come to international property investing much later than their counterparts in Hong Kong, who are wealthier and have a more easily convertible currency.

“The purchase restrictions in China drove them overseas, while they look for investments to counter the inflation,” said Mo Tianquan, founder and chairman of Beijing-based SouFun Holdings Ltd., which runs China’s biggest real estate website and organizes buying excursions abroad. “Some of them will buy homes considering better education opportunities for their kids, while others look for immigration options.”

Full the full article, please see Chinese on global homebuying spree.

Vancouver Sun May 28, 2011

5918 Chancellor Blvd., Vancouver

Type: 5-bedroom, 3-bathroom detached
Size: 2,030 sq. ft.
B.C. Assessment, 2011: $1.457 million
Listed for: $1.569 million
Sold for: $1.569 million
Sold on: April 3
Days on market: 24
Listing agent: Lailey Wallace at One Percent Realty Ltd.
Buyers agent: Lailey Wallace at One Percent Realty Ltd.

The big sell: This Douglas Park home already has an impressive pedigree, having been featured in the Spectacular Homes of Western Canada publication. It was custom-built in 2007 for the owner of an award-winning design group, so standards are high and attention to detail paramount. The character exterior of the property is combined with a modern interior, which includes spa-inspired bathrooms, a “floating” glass staircase, a contemporary kitchen and clean lines throughout. The upper floor has a large office, and a master bedroom with a semi-open ensuite bathroom and walk-in closet. As well, there is plenty of built-in storage space throughout the home. The lower level has a two-bedroom secondary suite with its own access and laundry, while outside, there is a single garage and a south-facing rear garden.

880 West 23rd Avenue, Vancouver

Type: 5-bedroom, 3-bathroom detached
Size: 2,030 sq. ft.
B.C. Assessment, 2011: $1.457 million
Listed for: $1.569 million
Sold for: $1.569 million
Sold on: April 3
Days on market: 24
Listing agent: Lailey Wallace at One Percent Realty Ltd.
Buyers agent: Lailey Wallace at One Percent Realty Ltd.

The big sell: This Douglas Park home already has an impressive pedigree, having been featured in the Spectacular Homes of Western Canada publication. It was custom-built in 2007 for the owner of an award-winning design group, so standards are high and attention to detail paramount. The character exterior of the property is combined with a modern interior, which includes spa-inspired bathrooms, a “floating” glass staircase, a contemporary kitchen and clean lines throughout. The upper floor has a large office, and a master bedroom with a semi-open ensuite bathroom and walk-in closet. As well, there is plenty of built-in storage space throughout the home. The lower level has a two-bedroom secondary suite with its own access and laundry, while outside, there is a single garage and a south-facing rear garden

#212 8720 No. 1 Rd., Richmond

Type: 2-bedroom, 2-bathroom apartment
Size: 1,120 sq. ft.
B.C. Assessment, 2011: $245,600
Listed for: $269,000
Sold for: $252,000
Sold on: March 31
Days on market: 19
Listing agent: Ron Smith at HomeLife Benchmark Walnut Grove
Buyers agent: Harris First at Macdonald Realty Westmar

The big sell: The Apple Greene Park building has an advantageous location, close to the Seafair shopping centre, the West Richmond Community Centre, and transit, schools, golf and tennis facilities. Residents are also provided with indoor and outdoor swimming pools, a recreation centre, a Jacuzzi, and games and meeting rooms. This two-bedroom unit is on the second floor, and has a quiet, northern exposure. It has benefited from some updates in the form of new paintwork, tile flooring, carpeting, crown moulding, wood baseboards, fixtures and shelving. The kitchen has an eating area, pantry, updated countertops and cabinets, and a new sink and fridge. There is in-suite laundry, five closets and an enclosed, carpeted balcony that runs the length of the apartment.

For the full story, please click on Real estate sales in Vancouver and Richmond.

For everyone who has ever teetered on the brink of downsizing from a house to a condo, take heart in this advice.

Our friends loved their new condo on the shore of Bedford Basin in Nova Scotia. They had sold their charming house a few miles away and, they thought, moved onward and upward. Their new home was a dream, with gleaming hardwood floors and vistas down the water toward Halifax. This was their retirement palace.

But three years later, they were gone. They bought a new house nearby, said good riddance to their erstwhile condo retirement palace and a very special good riddance to some of their neighbours in the building.

“I finally couldn’t stand having to deal with the idiots in the building,” our friend said. “It was like the lunatics were running the asylum. I even went on the condo board of directors. But it was no use. We had to leave to retain our sanity.”

Our friends’ experience is an extreme case of condophobia, where the dream turns into a nightmare. But I recalled their experience last week at the annual general meeting of our building in Toronto. These meetings are a rite of spring at condominiums across the country, a time when owners are brought up to date on the financial and physical conditions of their properties. And, yes. A time when grievances can be aired and vented.

Canada is displaying few signs of condophobia as the retired and the soon-to-be-so downsize — as our friends in Bedford did — and first-time buyers start their home-ownership lives with purchases of modest suites in downtown areas.

Thirty years ago, fewer than 4% of owner households were condo owners. By 2006, it had reached 11%. Today, the number is approaching 15%, meaning that well over one million Canadian households own a condominium. In the Greater Toronto Area this year, six in 10 new homes sold have been condos. And that trend is likely to continue.

My wife and I moved out of our house and into our modest condo almost 10 years ago and we are satisfied that it was the right move. We can lock up each winter and head to warmer climes for five months with few worries about the state of our home in what I call the “vertical village.” The building has been considerably updated in the past few years — at some extra expense, of course. We enjoy the indoor pool and little gym when we are here. And the location is unbeatable.

Yet, as our friends’ experience in Bedford underscores, condo life is not for everyone. Vertical villages can, like the non-vertical kind, have idiots. And sometimes it can seem as though they’re actually running the place.

Indeed, in a way it is a great leap of faith to commit yourself to entering an agreement whereby you are to be financial and social partners with a couple of hundred strangers for the foreseeable future. You will deal with them at the closest of quarters, trusting them to do the right thing so that your property and your well-being are secure.

Of course, you rely on neighbours when you occupy a stand-alone house, as we did for more than 30 years. But the shared ownership in a condo takes that reliance — that trust — to a far different level.

Some of the people reading this column will right now be considering selling their house and buying a condo. Here are some things to consider — beyond the usual real estate caveats — before buying and taking up residence in a vertical village:

* Those who have never lived in a condo/apartment may wish to rent out their house for a year and test-drive a condo rental unit for a year.

* Take a long, hard look at the condo building you’re thinking of buying in. You can ask for annual financial statements and the status of the reserved fund for study. (We were lucky in that a close friend had lived in our building for three years prior to our buying.)

* Take a special tour of the common elements of the building. You own a share of these places and you should know what you own. (An acquaintance in our building who has lived here for more than three years was recently surprised to learn we had a golf practice room.)

* Before committing to buying, you may want to sit in the lobby and read a newspaper or magazine while observing the comings and goings of the occupants and getting a sense of what the villagers are like.

* Likewise, you should walk (or drive) the neighbourhood for a good, long spell to get the lie of the land.

* If the building you are considering is older, there is a strong likelihood that special assessments will be coming to address the structural and decorative effects of aging. Also, some older buildings, like ours, do not have individual meters for hydro and water. So if you go away for the winter, you are in effect subsidizing your neighbours’ utility bills for months at a time. We’ve learned to live with it.

* If you opt to buy in a condo under development, be warned that these projects are rarely, if ever, finished on time. Expect delays and more delays.

This last point also underscores the need for patience in the world of the vertical village. As one friend described his condo, “It’s a funny little place with funny little people doing funny little things.”

Source: William Hanley, Financial Post

Demand for luxury homes across Canada – especially in Metro Vancouver – is rising, with the improved financial standing of wealthy Canadians the main factor, according to a report released Wednesday by Re/Max.

“The strength of the upper-end segment continues to defy expectations,” Elton Ash, regional executive vice-president, Re/Max of Western Canada, said in a statement.

“That demand remains largely domestic speaks to the solid underpinnings of the market, while underscoring the appeal of Canadian real estate on an international stage. Western Canada, in particular, will continue to see the upside benefit of investment from abroad.”

According to the report, the improved financial standing among high net worth people is the major factor driving strong sales activity at the top end of Canada’s housing markets.

Re/Max examined 12 major centres and found that luxury sales have surged in close to two-thirds of housing markets between January 1 and April 30 of this year, compared to the same period in 2010.

In terms of percentage increases over the four-month period, Metro Vancouver – where foreign investment has also played a major role – lead the way with a 118-per-cent increase, from 343 $2 million-plus homes sold in 2010 to 747 $2 million-plus homes sold in 2011.

That was followed by Ottawa (59 per cent), Calgary (51 per cent), Halifax-Dartmouth (27 per cent), Winnipeg (24 per cent), Hamilton-Burlington (13 per cent) and Greater Toronto (nine per cent).

Six of the seven major cities – except Calgary – are poised to set new records in top-end activity by year-end.

Price points were lower in the other markets, with a luxury home in Winnipeg, for example, considered anything over $500,000.

“Greater Vancouver’s luxury market continues to show unprecedented strength, with the number of sales over $2 million more than doubling in the first four months of 2011,” the report said.

Despite the robust activity, housing values in the top end of the market have climbed a nominal two per cent, rising from $2,955,168 to $3,025,947 year-over-year. Days on market have fallen to 48 from 54 one year ago, although some properties are moving within days in coveted neighbourhoods. Purchasers from the Greater Vancouver Area and Mainland China are driving sales in the top-end, with demand strongest for properties in Vancouver’s Westside (447 sales), followed by West Vancouver (160), and Richmond (41).

“Detached properties remain the most popular type of housing [in Metro Vancouver], comprising the vast majority of luxury sales at 673 units. Condominiums are a very small percentage of the market, with 58 sales occurring over $2 million.”

The report said that while foreign investment has augmented sales activity in several Canadian markets, its influence was only significant in MetroVancouver. Most regions reported that locals were the primary drivers of demand for luxury homes.

The report suggested that there are several factors that position Canada as an attractive option for buying luxury homes, including that its real estate remains a bargain by international standards, given its ranking for quality of life, political and economic stability and the strength of its property laws.

“Three key factors – serious equity gains, stock market recovery, and improved economic performance – have been behind the push for luxury housing product across the country,” Michael Polzler, executive vice-president, Re/Max Ontario-Atlantic Canada, said in a statement. “The combination also continues to bolster the bottom line of high net worth individuals both nationally and globally. The impact of that wealth is being seen in the demand for all things luxury—from homes to cars, collectibles and fine wines.”

Re/Max noted that the number of millionaires is rising in Canada, and will continue to do so, and that residential holdings have increased among the wealthy.

Source: Brian Morton, Vancouver Sun

The Canadian Real Estate Association has been adjusting its forecast for 2011 as economic circumstances warrant, and on Monday took another crack at the numbers.

Its first prediction was made in February, 2010, when it said prices would fall 1.5 per cent as sales fell 7.1 per cent.

Monday’s numbers were rosier, as stronger than expected sales across the country and high prices in B.C. caused the trade association to amend its outlook to a 1.3 per cent decline in sales and a 4 per cent gain in prices.

Here’s how it got there:

Initial forecast for 2011, February 2010

Sales: -7.1 per cent

Prices: -1.5 per cent

“Interest rate increases will contribute to weaker national sales activity in 2011.”

June, 2010 forecast for 2011

Sales: -8.5 per cent

Prices: -2.2 per cent

“While sales activity is unfolding as expected in Ontario, the decline in affordability in British Columbia impacted sales in the province during the first quarter. Additionally, changes to mortgage regulations announced in February are expected to marginally impact activity.”

July 2010 forecast for 2011

Sales: -7.3 per cent

Prices: 0.9 per cent

“Weaker than anticipated sales activity during the crucial spring home buying season in Canada’s four most active provincial markets prompted the revision. The decline is consistent with the exhaustion of pent-up demand from deferred purchases during the economic recession, and sales having been pulled forward into early 2010 due to changes in mortgage regulations.”

November, 2010

Sales: -9 per cent

Prices: -0.8 per cent

“Sales activity in the third quarter of 2010 began on a weak footing, but gained traction as the quarter progressed. Improving momentum for home sales activity suggests the resale housing market is stabilizing, but weaker than expected third quarter activity has reduced CREA’s annual forecast.”

February, 2011 forecast for 2011

Sales: -1.6 per cent

Prices: 1.3 per cent

“The upward revision to CREA’s forecast for 2011 reflects recent improvements in the consensus economic outlook and a further expected improvement in consumer confidence.”

May 9 forecast for 2011

Sales: -1.3 per cent

Prices: 4 per cent

“Although sales activity in the first quarter of 2011 came in largely as expected, multimillion dollar property sales in Greater Vancouver have surged unexpectedly. These sales have upwardly skewed average sale prices for the province and nationally, prompting the average price forecast to be revised higher.”

Source: Steve Ladurantaye, Financial Post

Canadian house prices will continue a “moderate and steady climb” in 2011, helped along by an improving economy and low interest rates, according to a report released Thursday.

Real estate services firm Royal LePage said the average price of a home in Canada will rise three per cent to $348,600, even as the number of transactions falls two per cent.

For house prices in Vancouver, the average price of a two-storey home is now more than $1 million, Royal LePage said, up 9.8 per cent over the last year. The report predicts an increase of 3.7 per cent for Vancouver house prices in 2011. The report says inventory is expected to grow 8 per cent, while interest rates will continue to be the most important factor, followed by employment levels.

It said that after a “lacklustre” third quarter in 2010, home prices were up between 3.9 and 4.6 per cent, year over year, in the year’s fourth quarter. This marked a return to growth more typical of trends since the end of the recession, Royal LePage said.

The report said, similar to last year, sales will be more robust in the first half of the year as homebuyers take advantage of low interest rates that could be on the rise in the near future.

“Canadians realize that interest rates are unsustainably low and that homes will become effectively more expensive when mortgage rates return to normal levels,” said Phil Soper, CEO of Royal LePage Real Estate Services. “We will likely see more price appreciation early in 2011 as some buyers complete transactions in advance of anticipated higher borrowing costs.”

The report said the strongest price gains will happen in mid-sized cities where homes are priced below the national average. It noted places like Winnipeg, St. John’s and Fredericton, where single two-storey homes are still widely available for less than $300,000.

Alberta’s housing market is also expected to be strong in the coming year, as the energy sector helps fuel a strong hiring climate.

However, cities such as Calgary and Edmonton were among the few major centres showing price declines, year to year, as of the end of last year. Edmonton now has lower-priced homes than Saskatoon, according to the Royal LePage report. The average price for a two-storey home in Edmonton was $334,286 in last year’s fourth quarter, down 2.3 per cent from a year earlier. It was $359,250 in Saskatoon, up 6.1 per cent.

Average prices for two-story homes as of Q4 2010 (change from year earlier):

Halifax $291,000 (9.7%)

St. John’s $327,627 (9.6%)

Montreal $375,222 (8.7%)

Ottawa $354,083 (6.7%)

Toronto $594,231 (5.6%)

Winnipeg $296,750 (6.4%)

Regina $282,500 (9.1%)

Saskatoon $359,250 (6.1%)

Calgary $404,622 (-5.3%)

Edmonton $334,286 (-2.3%)

Vancouver $1 million (9.8%)

Victoria $480,000 (6.9%)

Source: Royal LePage
© The Financial Post
Derek Abma

http://www.vancouversun.com/business/Average+Vancouver+house+price+hits+million+expected+rise+further+Report/4068694/story.html