Housing performance expected to accelerate in 2010, as economic stability returns to Canadian markets, says RE/MAX

December 4, 2009 · Filed Under Real Estate Canada and Remax Reports · Comment 

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.”

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Canadian housing markets buck recession and trend upwards – RE/MAX Bricks and Mortar Report

September 24, 2009 · Filed Under Market Trends, Real Estate Canada and Remax Reports · Comment 

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.

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Newfoundland & Labrador – One billion barrels and counting says Royal Bank’s Provincal Outlook

March 12, 2009 · Filed Under Newfoundland Oil and Gas, St. John's General and St. John's Real Estate · 1 Comment 

Here is a snippet straight from Royal Bank’s March Provincial Outlook outlining where Newfoundland & Labrador stand during this harsh global economic times.

“The Newfoundland & Labrador offshore oil industry celebrated a milestone in January with the production of its one billionth barrel of oil. This was yet another reminder of the long road traveled by energy developments off the province’s coast and their tremendous contribution to the transformation of Newfoundland & Labrador into a dynamic economy. Nonetheless, the nosedive in energy prices since last summer and declining production at the province’s maturing production wells have cut any festivities short. The real cheers might have to wait until late this year or early next when the White Rose project expansion enters into operation, giving the industry — and the provincial economy — a shot in the arm. In the meantime, decreasing oil output and lower-than expected crude prices will be a substantial drag on economic activity in the  province, and the main reason for our projected decline in real GDP in 2009 (down 1.2% following estimated growth of 1.3% last year). Further contributing  to the weakness will be an expected drop in mineral production (partly the result  of market-related downtime), as well as the recent closure of the Abitibi Bowater  newsprint mill in Grand Falls.

Despite the challenges, the mood in the province remains relatively upbeat.  Huge investment projects — including the C$2-billion hydromet nickel processing  facility in Long Harbour — are still going ahead and the provincial government recently announced a significant increase  in spending on infrastructures.

According to Statistics Canada’s P&PI survey, non-residential capital expenditures in Newfoundland & Labrador are set to increase the fastest among all provinces in 2009 (up by almost 13%). Residents who had departed the province earlier are flocking back . This stimulates demand for housing and consumer goods and services. Housing markets have been very tight until recently, and prices continue to show among the strongest year-over-year increases in the country. Home building is expected to remain relatively steady this year, with housing starts forecast to move a touch above last year’s 19-year high of 3,200 units. Such relatively robust domestic activity is expected to persist next year and be the dominant factor returning the provincial economy back into positive growth once oil production is stabilized by White Rose’s expansion.”


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St. John’s Newfoundland leads the charge for residential real estate in Canada for 2008

December 4, 2008 · Filed Under Real Estate Canada and St. John's Real Estate · Comment 

St. John’s, Newfoundland lead the charge for residential real estate in Canada in 2008, with an anticipated 11 per cent increase in unit sales over 2007, followed by Saint John, New Brunswick and Winnipeg.  Housing values are forecast to remain stable or climb in almost all markets in 2008, with the biggest gains expected in Regina (39 per cent), Saskatoon (24 per cent), Winnipeg (22 per cent), St. John’s (21 per cent), Saint John (19.5 per cent), Sudbury (14 per cent), and Montréal (12 per cent).

Housing market performance will clearly be contingent on economic performance at a local, provincial, and national level in 2009. Issues affecting the overall economy are impacting housing markets across the country and the situation is not expected to be remedied until consumer confi dence is restored. If inventory levels remain stable, pent-up demand kicks into gear, and lower interest rates stimulate home-buying activity, we could see a bounce back as early as spring.

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Threat of global recession hinders home sales in major Canadian housing markets in 2008 and 2009, says RE/MAX

December 3, 2008 · Filed Under Real Estate Canada and Remax Reports · Comment 

Mississauga, ON (December 3, 2008) – Global economic uncertainty weighed heavily on residential real estate activity in most major Canadian centres during the latter half of 2008. Although the forecast for 2009 promises more of the same, most markets are expected to weather the storm, says RE/MAX. “Housing market performance will clearly be contingent on economic performance at a local, provincial, and national level in 2009,” says Michael Polzler, Executive Vice President and Regional Director, RE/MAX Ontario-Atlantic Canada. “Issues affecting the overall economy are impacting housing markets across the country and the situation is not expected to be remedied until consumer confidence is restored. That said, we could see a bounce back as early as spring – if inventory levels remain stable, pent-up demand kicks into gear, and lower interest rates stimulate home-buying activity.”

Click here for the RE/MAX Press Release

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Newfoundland Housing Starts Soar in May

June 9, 2008 · Filed Under Market Trends and St. John's Real Estate · Comment 

Newfoundland urban housing starts soared during the month of May, according to preliminary data released today by Canada Mortgage and Housing Corporation (CMHC). May’s total housing starts soared 49 per cent, with 230 posted within Newfoundland compared to 154 a year ago. A total of 224 of the 230 starts were within St. John’s metro versus 124 last May, a record increase of 81 per cent.

Year-todate, there have been 471 new homes started across the province versus last year’s total of 395 homes during the same period. A total of 456 of these starts occurred within St. John’s metro, for a year-to-date increase of 33 per cent.

“With pent-up demand for newly built homes within the local housing market, May’s notable increase in housing starts is an example of the impact that a limited supply of current listings available for sale can have on residential construction activity,” said Chris Janes, Senior Market Analyst with CMHC in Newfoundland and Labrador. “With a buoyant sellers market, the current supply of active listings is approximately 50 per cent lower than a year ago, so buyers are shifting to new homes, simply because they cannot find a suitable existing home in the resale market,” added Janes.

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Canadian Economic & Financial Market Outlook

April 12, 2008 · Filed Under St. John's Real Estate · 1 Comment 

RBC Economic & Financial Market Outlook

Debt load rising, but so are asset values

Household balance sheets remain in fair condition with the ratio of debt-to assets remaining within the range of the past 40 years. Still, with debt service costs high relative to personal disposable income, the recent tightening in credit conditions does present some downside risks for the outlook for consumer spending this year. Mitigating this, however, is the strong growth in asset values — house prices have recorded gains of about 10% for six years running and the TSX posted a decent 7.2% return in 2007 despite a soggy fourth quarter. However, if the weakness in equities evident late last year and early this year persists, it would present a clear downside risk to household spending during the forecast period.

Stretched affordability to exert modest downward pressure on housing market

The rise in house prices has stretched affordability. RBC’s housing affordability index showed that conditions were the worst since early 1990 for homebuyers in last year’s fourth quarter.  Our view that the Bank of Canada will continue to lower interest rates, with attendant easing in credit market tightening, and that the pace of house price increase will slow this year both point to a modest improvement in affordability. There were 227,000 new homes started in Canada last year, marking the sixth year that starts were greater than 200,000 units. The erosion in affordability and uncertain global economic environment will likely result in slower housing market activity in 2008, although, with interest rates declining, the weakening is likely to be relatively modest.

Bank of Canada to cut rates to mitigate impact of trade drag

The Bank of Canada cut the policy rate by 25 basis points at each of its December and January fixed action dates, concluding that “further monetary stimulus is likely to be required in the near term” to mitigate the downside risks coming from the widening in credit spreads and the weakening U.S. economy. The Bank picked up the pace of easing in March to 50 basis points, sending the overnight rate down to 3.50% as concerns about the U.S. economy escalated. Continuing concerns about the downside risks to growth will send this policy rate down to 2.75% by mid-2008.

U.S Housing recession to continue in 2008; market to stabilize in 2009

The U.S. housing market is showing little sign of recovery. The stock of homes available for sale stands very close to record-high levels and, as a result, new residential construction continues to contract.  In February, the level of housing starts was 54% below the recent peak level and the pace of new and existing home sales was the slowest since the mid-1990s. The inventory overhang and slow sales pace point to construction activity contracting at a double-digit annualized pace for at least the first half of 2008. We estimate that the decline in residential construction spending will trim slightly under one percentage point from the 2008 growth rate. Weakening demand will continue to push prices lower, pointing to a mild deterioration in housing-related net worth in the quarter.

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