Canadian housing market keeps humming along

On Wednesday, a pair of reports showed continuing improvement in the conditions for those thinking of selling their homes in the near future.

On Wednesday, a pair of reports showed continuing improvement in the conditions for those thinking of selling their homes in the near future.

Photograph by: Herald Archive, Calgary Herald

OTTAWA — The good news about the Canadian housing market keeps coming, despite concerns by some that we’re headed for a “bubble.”

On Wednesday, a pair of reports showed continuing improvement in the conditions for those thinking of selling their homes in the near future.

The Teranet-National Bank house-price index for December, measuring six major markets across the country, was up 1.2 per cent from November and ahead 5.2 per cent from a year earlier.

It marked an overall high for the index and the third month in a row that year-over-year prices have increased.

The index covers Calgary, Vancouver, Toronto, Ottawa, Montreal and Halifax, and prices in all six markets were ahead in December on a year-to-year basis.

That comes after a report last week from the Canadian Real Estate Association showed the average listed resale price in Canada was up almost 20 per cent annually in January to $328,537.

Meanwhile, real estate services firm Re/Max said Wednesday that housing supply is drying up relative to the number of people looking to buy.

It said expected higher interest rates from the Bank of Canada by mid-year, tougher mortgage conditions imposed by the federal government effective in April, and the implementation of harmonized sales taxes in Ontario and British Columbia in July should cause a surge in demand this spring.

Ontario and B.C. will adopt an HST that merges existing provincial sales taxes with the federal GST. Several additional items currently exempt from provincial levies will become subject to the wider-encompassing HST.

As far as real estate goes, the HST will not apply to sales of existing homes, and there will be rebates of up to about $25,000 available to offset the tax on new homes in both provinces.

However, Elton Ash, Re/Max’s executive vice-president for Western Canada, said the HST will lead to higher taxes on things such as agent commissions and legal fees, prompting some to want to buy homes before they take effect.

Despite rising demand and values, Ash discounted the notion that any “bubble” is developing in the housing market.

“I’m confident that we are not going into a bubble situation,” he said. “I don’t think that the Canadian buyer is that naive at all.”

The federal government and the Bank of Canada have also said there is no evidence of a housing bubble.

However, both have warned consumers that interest rates will not remain at record lows indefinitely, and Finance Minister Jim Flaherty has said the new mortgage regulations are meant to deter those who may not be able to afford a more expensive housing market.

Still, Ash said Canadian buyers remain “cautious” and sellers are “realistic” about the kind of prices they can get for their homes. He said that over the last year and the latter part of 2008, market participants learned lessons about how fast the tide can turn in the real estate market.

Ash added that, with the exception of certain areas of Vancouver and Toronto, bidding wars are largely a thing of the past.

December housing prices (% change from November / from December 2009):

Calgary 1.6 / 0.1

Halifax -1.9 / 2.9

Montreal 1.1 / 5.0

Ottawa 0.4 / 6.2

Toronto 1.2 / 7.1

Vancouver 1.3 / 5.1

National 1.2 / 5.2

Source: Teranet-National Bank

Active listings by market for January:

Market/ 2009/ 2010/ percentage change

St. John’s/ 951/ 999/ 5%

Halifax-Dartmouth/ 3311/ 2695/ -19%

Hamilton-Burlington (xx)/ 1028/ 1261/ 17%

Ottawa/ 3988/ 2840/ -30%

Kitchener-Waterloo/ 1323/ 884/ -33%

London-St. Thomas/ 2538/ 2071/ -18%*

Greater Toronto/ 20450/ 12052/ -41%

Winnipeg/ 2222/ 1938/ -13%

Regina/ 456/ 381/ -16%

Saskatoon/ 1156/ 729/ -37%

Calgary/ 9225/ 6838/ -26% (xxx)

Edmonton/ 6573/ 4864/ -26%

Kelowna/ 4648/ 4120/ -11%

Victoria/ 2930/ 2061/ -30%

Greater Vancouver/ 13996/ 10218/ -27%

* — detached homes

xx — Freehold homes

xxx — Total MLS

Source: RE/MAX

Posted via web from Toronto Real Estate News | Blog

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About Tariq Sultan
Dear Readers, I am a dedicated Toronto, Ontario based real estate professional who has been successfully meeting and exceeding the needs of his clients for past several years. I am actively involved in the insurance, financing, and mortgage industry. Real estate is not only my career – it is my passion. I strive to continuously provide my clients with exceptional service to ensure they are fully satisfied when it comes to their real estate needs. For any real estate related inquires contact me today, I will be happy to assist you. Best wishes, Tariq Sultan

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