CREA Delivers ‘Mixed News’ to Canadian Real Estate and Mortgages Market
Canadian homeowners and home buyers received mixed news yesterday from
the Canadian Real Estate Association. Homeowners with existing
mortgages could be felt breathing a sigh of relief on the news that
home values are holding their own, while to the south of us U.S.
housing prices continue to tumble in the wake of the fallout from that
country’s sub-prime mortgage collapse.
The CREA released its sales statistics for June yesterday, reporting
that Canada’s national housing market cooled in the first half of 2008, but
with housing prices continuing to appreciate at a much more modest and sustainable
pace in what the CREA continues to characterize as a “considerably more
balanced” national housing resale market. The average price of a
resale home in Canada rose 3.6 per cent year-over-year during the first
half of 2008, according to the CREA’s most recent statistics. “On a
quarterly basis, the average price was $315,760 in the second
quarter, up 1.8 per cent from the second quarter of 2007,” while in
June “the
national average price held steady on a year-over-year basis at
$314,028.”
For Canadians in the home purchasing market the news was even better, as the number of new listings of homes for sale reached record high levels. For home purchasers, the new MLS numbers clearly indicate that what was formerly a white-hot seller’s market is, indeed, more balanced, With the record number of homes currently listed on real estate boards across the country, Canadians are dealing with a buyer’s market for the first time in years.
“In essence, Canada’s housing market has pulled back from the
record-setting pace set in 2007, but in most provinces it continues at
or near sales levels set in the years before that,” says CREA President, Calvin Lindberg. “The increase
in housing prices is also pulling back from the record-setting pace of
last year, but we have yet to see any of the price contractions that
have impacted the housing market in the United States.”
All in all mixed yet good news for the markets. Good news for homeowners with existing mortgages in need of refinancing, and better news for home buyers seeking to purchase a home in markets that have tipped in their favour.
So finally an article that says something positive about what is happening with our RE market. I like to see that. In the last few weeks, everyone seemed so worried about what will happen, but as an experienced realtor in Toronto I told everyone, even my clients to just stay calm and wait, that everything will stabilize and calm down. It was the exotic year 2007, that set off this “panic attack”. On one hand, of course, people who bought last year, especially investors may have a few more wrinkles out of this, but the average homeowner should welcome this development.
Julie
I guess its good and bad news for home buyers. We have been waiting for prices to drop in the Toronto real estate market before taking the plunge but I don’t see that happening now.
Still, we don’t have to worry about prices getting out of hand any time soon.
Yes . . . Definetly “good and bad news.” First time home buyers waiting for a U.S.-style overall market “correction” seem likely to be in for a disappointment. Yet with record-high numbers of listings, savvy purchasers can look for the motivated sellers who will offer them a good value first purchase without undue concern that the market will collapse underneath them. What recent market trends and moves by financial institutions and regulators seem to have done is close the market off to speculators looking for a fast turn around on their investment. If you are looking to build up your home equity, a key to sound financial planning, a more balanced market is in the end long-term good news, yet perhaps bad news in the short term while you are “taking the plunge”.