Here is a great infographic from RateHub.ca A very well laid out graphically representation of how the Canadian Mortgage market currently sits. For better and for worse, they share all the good, the bad and the ugly of what Canadians do with their mortgages. According to the website, they received all their data from the 2013 CMHC Mortgage Consumer Survey and CAAMP’S Change in the Canadian Mortgage Market report. Below is a snipet of the infographic. Click on it for the entire picture. It’s VERY interesting.
According to statistics released yesterday by The Canadian Real Estate Association (CREA), national resale housing activity edged lower on a month-over-month basis in June 2012. Price gains remained strong in Toronto, continued slowing in Greater Vancouver, and accelerated in Calgary.
• Home sales down 1.3% from May to June.
• Actual (not seasonally adjusted) activity stood 4.4% below levels in June 2011, marking the first yearover-year decline since April 2011.
• The number of newly listed homes climbed 1.4% from May to June.
• Fewer sales and a rise in new listings resulted in a more balanced national housing market.
• The national average home price slipped 0.8% on a year-over-year basis in June.
• The Aggregate Composite Benchmark home price was up 5.12% year-over-year in June.
Sales over Multiple Listing Service® (MLS®) Systems in Canada eased 1.3 per cent on a month-over-month basis in June 2012. This follows a 3.4 per cent decline posted in May.
National activity was down from the previous month in slightly more than half of all local markets, with Greater Toronto and Vancouver contributing most to the small decline.
“Canada’s housing market lost a little altitude in June, but it’s still flying pretty high,” said Wayne Moen, CREA President. “That said, sales activity and average prices bucked the national easing trend in a number of markets, which underscores that all real estate is local. Buyers and sellers should talk to their REALTOR® to understand how the housing market is shaping up in their area.”
Actual (not seasonally adjusted) activity was down 4.4 per cent in June 2012 compared to the same month last year. This marks the first year-over-year decline in national activity since April 2011.
Boosted by strong activity in March and April, a total of 257,193 homes traded hands over Canadian MLS® Systems in the first half of 2012. This is up 4.7 per cent from levels reported over the same period in 2011, and marks the strongest sales for the first half of any year since 2007.
“Home buyers didn’t rush their purchases before the most recently announced changes to mortgage regulations came into effect,” said Gregory Klump, CREA’s Chief Economist. “That’s a big change compared to what we saw as a response to previously announced changes. It will take some time before the compound effect of previous and recent changes to regulations on Canada’s housing market becomes apparent.”
The number of newly listed homes rose 1.4 per cent in June compared to May.
Nationally, the number of months of inventory stood at six months at the end of June, up slightly from 5.9 months of inventory at the end of May. The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and is a further measure of the balance between housing supply and demand.
The MLS® Home Price Index (MLS® HPI) is a more accurate measure of Canadian home price trends, since it is not distorted up or down by changes in the mix of sales. It tracks home price trends in five of Canada’s most active housing markets, including Greater Vancouver, the Fraser Valley, Calgary, Greater Toronto, and Montreal. These markets account for nearly half of all home sales activity over Canadian MLS® Systems.
The Aggregate Composite MLS® HPI rose 5.1 per cent from May to June 2012. This represents a slight deceleration from the 5.2 per cent gain reported in May. The year-over-year increase was again highest in Greater Toronto (7.9%), followed by Calgary (5.6%), Greater Montreal (2.7%), the Fraser Valley (2.6%), and Greater Vancouver (1.7%).
This morning, the Minister of Finance announced changes to the standards governing government-backed insured mortgages:
- the maximum amortization period was reduced from 30 years to 25 years;
- the maximum amount Canadians can withdraw in refinancing their mortgages was lowered to 80 per cent from 85 per cent of the value of their homes;
- the maximum gross debt service ratio was fixed at 39 per cent and the maximum total debt service ratio at 44 per cent; and
- the availability of government-backed insured mortgages was limited to homes with a purchase price of less than $1 million.
Canadians will continue to be able to purchase a home with five percent down.
The changes announced today will come into effect on July 9, 2012. Details of the announcement can be found here.
Lack of inventory will be the greatest challenge facing housing markets across the country this Spring, according to a report released by RE/MAX.
The RE/MAX Market Trends Report 2010, which examined real estate trends and developments in 16 markets across the country, found that unusually strong activity during one of the traditionally quietest months of the year has led to a sharp decline in active listings in 81 per cent of markets surveyed. The threat of higher interest rates, tighter lending criteria, and in British Columbia and Ontario, the introduction of the new Harmonized Sales Tax (HST) have clearly served to kick-start real estate activity from coast-to-coast, prompting an unprecedented influx of purchasers. As a result, 87.5 per cent of markets posted an increase in sales in January. Average price appreciated in 81 per cent of markets surveyed.
There have never been so many motivating factors in play at once. We’re in for a heated Spring market that will, in all probability, spill over into the summer months, as the window of opportunity draws to a close. The supply of homes listed for sale has been drastically reduced, housing values are once again on the upswing, and banks and governments are moving in unison toward stricter lending policies.
Markets experiencing the tightest inventory levels include Toronto (- 41 per cent); Kitchener-Waterloo (-33 per cent); Ottawa (- 30 per cent); Victoria (- 30 per cent); Greater Vancouver (- 27 per cent); Halifax-Dartmouth (- 19 per cent); London-St. Thomas (- 18 per cent); Regina (- 16 per cent); and Winnipeg (- 13 per cent). Conditions were still balanced, but starting to tighten in Calgary, Edmonton and Saskatoon, particularly in the single-family detached category.
The highest year-over-year sales gains were reported in Greater Vancouver (152 per cent), Kelowna (121 per cent), Greater Toronto (87 per cent), Victoria (69 per cent), Hamilton-Burlington (58 per cent), London-St. Thomas (55 per cent) and Calgary (47 per cent). Western Canadian cities dominated the list of centres with the highest increases in price appreciation. These included Victoria at 25.5 per cent, Kelowna at 22 per cent, Greater Vancouver at 19.5 per cent, and Winnipeg at 17 per cent. St. John’s (23 per cent) and Toronto (19 per cent) were also among the frontrunners for price growth.
Affordability is the catalyst for the vast majority of purchasers in today’s housing market. While homeownership is still within reach in many major centres, levels are slipping. There is a growing sense, on both sides of the fence, that the time to act is now.
While buyers are taking advantage of favourable conditions, sellers too are reaping the rewards. Competing bids are a factor in the marketplace once again, with well-priced listings—especially at the entry-level price point—experiencing multiple offers. Properties priced at fair-market value will likely sell quickly for top dollar. The overall pressure on sales and price is significant across the board – and it’s not likely to subside unless more inventory comes on-stream.
April 19th is the deadline for the old mortgage rules. After this, the new changes proposed by the Canadian government earlier this week will be in effect. Personally I think the rules are a good move from the governments part and in the long run protect Canadians from taking on additional debt. As well, for those thinking we are in a housing bubble it should assist in slowing the pace a little.
1) All new borrowers will have to meet standards for the 5 year fixed-rate mortgages even if they’re seeking a shorter, variable-rate loan.
2) The maximum amount Canadians can withdraw when refinancing is now 90% of the value of their homes down from the current 95 per cent. It’s a good idea to personally cap this at 80% – if you go over 80%, CMHC fees are applicable.
3) For those interested in an investment property, you will be required to have a 20% down payment for government-backed mortgage insurance on speculative investment properties.
The third rule change seems to be the harshest of the three as there are a number of people interested in buying investment properties for the long term (ie for retirement). It’s a big price hike for a down payment on an investment property now. An average 2-apartment home in St. John’s is around $250,000. This means a purchaser would need $50,000 for the down payment. Again, the 20% will help avoid your CHMC fees when purchasing an investment property.
What are your thoughts for the new upcoming changes in Canada’s mortgage rules?
- The First Quarter 2010 edition of CMHC’s Housing Now – Major Centres – St. John’s is now available and can be accessed by clicking here
- Ottawa to make changes to mortgage rules that would require banks to consider whether a person who takes out a variable-rate mortgage on a home can continue to make the payments if were to go up significantly
- The much heated topic of the week (from a REALTOR’s point of view) is the Competition Bureau’s attack on the Canadian Real Estate Association (CREA) and its Multiple Listing Service (MLS). Check out this Globe and Mail article by Stephen Ladurantaye – What’s a stake in Competition Bureau’s MLS fight.
- TheScope.ca writes about the proposed new 15-storey Fortis building will look like in downtown St. John’s. Complete with actual photo’s of the building courtesy of Fortis.
- How will the 2010 Winter Olympic’s effect the Vancouver Real Estate Market? A very interesting read.
- Is a Real Estate Bubble forming in Canada? Check out BNN’s Squeezeplay as they interview Don Campbell and discuss.
Housing performance expected to accelerate in 2010, as economic stability returns to Canadian markets, says RE/MAX
Mississauga, ON (December 3, 2009) – In the midst of one of the most tumultuous economic periods in recent history, residential real estate has proven to be a safe harbour, with sales and average price expected to post gains in most major Canadian cities in 2009, according to a report released today by RE/MAX.
The RE/MAX Housing Market Outlook for 2010 examined residential real estate trends in 23 markets. The report found that sales are forecast to recover in almost all major centres by year-end 2009, led by an anticipated 45 per cent increase in Greater Vancouver. Two markets — Ottawa and Quebec City — are expected to hit historic highs in the number of homes sold. Average price should post new records in 65 per cent of markets surveyed this year. As economic performance ramps up across the country, so too will residential real estate. Eighty-three per cent of markets (19/23) are expecting sales to increase over 2009 levels while housing values are forecast to escalate in 91 per cent (21/23) of Canadian centres in 2010. The remaining markets will match 2009 levels.
Approximately 465,000 homes are expected to change hands nationally in 2009, a seven per cent increase over one year ago. Canadian housing values are forecast to close the year at $318,000, up five per cent from $303,594 in 2008. By year-end 2010, the number of homes sold is predicted to climb another two per cent to 475,000 units. The average price of a home is also expected to experience an uptick, rising two per cent to $325,000 – the highest level in Canadian history.
“2009 was without question the year of the house,” says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. “Real estate not only defied industry and analysts’ predictions in 2009 — it’s performance went well beyond the realm of expectation by boosting consumer confidence levels and ultimately kick starting the national economic engine. While low interest rates were a principle factor driving home buying activity, no one can discount the value that Canadians place in owning a home.”
With the worst of the recession over, residential real estate markets in major Canadian centres are poised for growth in the final quarter of 2009, according to a report released today by RE/MAX.
The RE/MAX Bricks and Mortar Report found the bounce back that began in early Spring has made this recession one of the shortest on record for real estate. Low interest rates, pent-up demand, and improved affordability levels have all played a role in the recovery now well underway. Percentage increases in sales from January to August 2009 were led by Vancouver, (up a substantial 14 per cent to 23,158), Victoria (up 7.4 per cent to 5,266), Edmonton (up 6.2 per cent to 13,691), Regina (up five per cent to 2,597), Ottawa (up 2.4 per cent to 10,830) and Toronto (up 1.8 per cent to 58,421).
Housing values are already ahead of record-breaking 2008 levels in seven of the 11 markets surveyed, including Newfoundland-Labrador (18.1 per cent year to $203,584), Regina (6.4 per cent to $244,088), Halifax-Dartmouth (3.5 per cent to $239,633), Winnipeg (3.5 per cent to $207,006), Ottawa (3.3 per cent to $301,684), and Toronto (up 0.3 per cent to $385,978). Nationally, average price hovers at $312,585, up 0.5 per cent over one year ago.
“Markets are heating up across the country,” says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. “Purchasers are clearly taking advantage of affordable prices and rock bottom interest rates. Those who missed the boat in years past have found that sitting on the sidelines can be a costly move. Prices are on the upswing and inventory levels are tightening, so the push toward home ownership is expected to continue throughout the Fall and possibly into early 2010.”
The recovery of Canada’s resale housing markets speaks to the tremendous value Canadians place on the importance of owning a home. The number of Canadians overall who own a home has increased since 1981 from 62.1 per cent to 68.4 per cent, with some markets posting even higher homeownership rates — Calgary (74.1), St. John’s (71.5), Regina (70.1), and Edmonton (69.2). Significant gains have also been made over the same period in markets such as Ottawa — where homeownership levels rose from 51.4 per cent to 66.7 per cent — and Toronto, where levels rose fro m 57.3 to 67.6 per cent.
As home sellers in St. John’s real estate market adjust to increasingly competitive market conditions, RE/MAX has launched Fit To Sell, a timely program designed to secure a quick sale for top dollar.
“In the past two months, hundreds of homes have been listed for sale, but only 40 per cent have sold,” explains Michael Polzler, Executive Vice President, Regional Director, RE/MAX Ontario-Atlantic Canada. “This innovative new program encourages existing homeowners to increase their stake in the home-selling process by working with their real estate professional to maximize their homes’ potential.”
The launch of Fit To Sell coincides with the opening of the St. John’s Home Show, scheduled for April 30 through to May 3, at the Mile One Centre. RE/MAX will be presenting its Fit To Sell tips, developed with the help of popular staging expert Carla, host of the DVD series ‘How to Stage your own Home’ and owner of Nex-Step Design, at the event.
“We know that location, price, and condition are the three major factors that come into play when selling a home – and while location and price are clearly choices made by the buyer at the onset, condition is the one factor that a seller can influence,” says Polzler. “Sellers who make the right decision in preparing their home for sale can significantly improve their bottom line.”
Check out the Fit to Sell website www.fittosell.ca for a comprehensive package of videos and checklists to get top dollar for your St. John’s home.
Be sure to fill out your online ticket for a chance to win a $25,000 Viking Kitchen through the RE/MAX Ultimate Viking Kitchen Contest.
Last night, The Hour with George Stroumboulopoulos had a great interview with Don Campbell. Don is a Real Estate Consultant, educator, investor and author of a some excellent real estate investing books, his newest Real Estate Investing in Canada: How to Create Wealth with the ACRE System.
The main discussion was based around whether the Canadian real estate market is going through a crash or just a correction. In interesting comment was how he referred to the last three real estate years as “The Tiger Woods Years”. (ie can buy just about anything and make money). The market is now in a correction stage according to Mr. Campbell.
Yes market activity has slowed, prices have dropped and new construction starts lower, but he is preaching that this is just a market correction, be smart on what/where you buy.
He was asked: what conditions do you look for with regards to buying a property in a particular city?
1) look for population increasing
2) average income increasing
3) affordable properties
4) highly accessible (ring road exits, subway, train stops etc)
What five cities in Canada are on his top list for the next 5 – 7 years?