First-quarter Canadian mortgage rates continued to decline in 2009 to the benefit of consumers. The posted one-year borrowing cost on a fixed term mortgage fell to 5.00 per cent at the end of February, marking a 195 basis points (bps) decline since July 2008. The five-year fixed term mortgage rate fell to 5.79 per cent in February, down 141 bps from October 2008 (Fig.1). BCREA forecasts near-record low mortgage rates in the next four quarters, as weak economic conditions and low inflation contribute to lower interest rates in Canada.
On March 3, the Bank of Canada (BoC) cut its target for its key overnight interest rate by 50 bps to 0.5 per cent as the global economy worsened and domestic demand pulled back. On a cumulative basis, the target overnight rate has been cut by 400 bps since December 2007. Despite the current low level, futures markets are pricing in a further 25 bps cut. The BoC noted in its March 3 communiqué that “the overnight rate can be expected to remain at this level or lower at least until there are clear signs that excess supply in the economy is being taken up.” Given the continued deterioration in global economic conditions, particularly in the US, BCREA expects the BoC to lower the overnight rate to a floor of 0.25 per cent on April 21.
A decline in short-term interest rates and minimal risk of inflation in the near future should set the stage for further downward pressure on mortgage rates. Variable mortgage rates, which generally move in lock-step with the prime and hence the overnight rate, should reach a bottom after the BoC’s next interest rate announcement on April 21, notwithstanding rate discounts or premiums offered by financial institutions.
Fixed term mortgage rates, which are closely related to bond yields and deposit rates of similar maturity, should decline as the inflationary risks associated with higher potential interest rates in the future subside with the weakened economy. Meanwhile, tight credit market conditions are expected to improve, albeit slowly, lowering the cost of mortgage market funds raised in capital markets. The potential for an improvement in economic conditions in 2010 will lead to modest growth in interest and mortgage rates during the second half of 2010.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
Monday, April 13, 2009
Global Economy Retrenches
The global economic outlook has deteriorated rapidly during the last two quarters. The ongoing financial crisis has bled into the real economy as declines in asset values have cut into household wealth, yielding lower consumer demand. Consumers and businesses have also cut back or postponed expenditures and production amid the economic uncertainty, lowering consumption
and capital expenditures.
These worsening conditions led the International Monetary Fund to lower its global growth forecast in late January to 0.5 per cent for 2009, with a 3 per cent rebound in 2010. In a more recent release, The World Bank forecasted a contraction in the global economy for 2009. Both 2009 forecasts underscore the severity of the current situation, which would mark the worst
global performance since World War II.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
and capital expenditures.
These worsening conditions led the International Monetary Fund to lower its global growth forecast in late January to 0.5 per cent for 2009, with a 3 per cent rebound in 2010. In a more recent release, The World Bank forecasted a contraction in the global economy for 2009. Both 2009 forecasts underscore the severity of the current situation, which would mark the worst
global performance since World War II.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
Canada Caught in the Undertow
As a small open economy, Canada is not immune to the global recession. The deep contraction in US economic activity has been particularly challenging for Canada, given the countries’ trade ties. US auto sales dropped to an annualized rate of 9.1 million units in February, marking a 40 per cent year-over-year decline and the lowest activity on record. This contributed to declines of 30 per cent in the vehicle manufacturing components of Canada’s GDP in Q4 2008. Meanwhile, the US housing market has yet to turn the corner. New home starts have tumbled to historical lows while home prices continue to trend lower, suggesting further challenges for Canada’s wood products sector. A global pull-back in economic activity has also lowered the demand and price of a number of other Canadian export commodities, including those in the metals, minerals and energy sectors.
While the retrenchment in export activity has dominated headlines, domestic demand has also weakened. Personal spending fell for the first time since 1995 in Q4 2008, reflecting lower consumer confidence and less robust labour market conditions. Investment has also slowed in plant and equipment, and residential structures. The latter reflects less new home construction, renovations, and real estate transfers.
As a result, Canada’s GDP contracted at an annualized rate of 3.4 per cent in Q4 2008, the weakest quarterly performance since 1991 (Fig.2). That said, this decline paled in comparison to those recorded in regions such as the US, Euro Area and Japan.
A weaker Canadian dollar has and will result in higher import prices. Even so, a contracting economy with excess capacity will continue to exert downward pressure on inflation (Fig.3). This will provide the Bank of Canada room to further cut its policy interest rate to spur economic activity. Expectations of lower inflation and future interest rates will push interest rates lower on longer-term products, such as mortgages.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
While the retrenchment in export activity has dominated headlines, domestic demand has also weakened. Personal spending fell for the first time since 1995 in Q4 2008, reflecting lower consumer confidence and less robust labour market conditions. Investment has also slowed in plant and equipment, and residential structures. The latter reflects less new home construction, renovations, and real estate transfers.
As a result, Canada’s GDP contracted at an annualized rate of 3.4 per cent in Q4 2008, the weakest quarterly performance since 1991 (Fig.2). That said, this decline paled in comparison to those recorded in regions such as the US, Euro Area and Japan.
A weaker Canadian dollar has and will result in higher import prices. Even so, a contracting economy with excess capacity will continue to exert downward pressure on inflation (Fig.3). This will provide the Bank of Canada room to further cut its policy interest rate to spur economic activity. Expectations of lower inflation and future interest rates will push interest rates lower on longer-term products, such as mortgages.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
New Survey on Affordability and Green Housing Reveals BC Trends
Vancouver, BC – April 7, 2009. A survey of homeowners and renters across British Columbia suggests that, when it comes to housing, affordability concerns and making smart green choices are top of mind for most BC residents.
Sponsored by the British Columbia Real Estate Association (BCREA), the January 2009 Mustel Group survey examines the top affordability barriers in the province and how provincial taxes and homeowner assistance programs impact BC buyers.
A total of 38 per cent of British Columbians plan or hope to purchase a property within the next five years, with about half of these potential buyers expecting to do so in the next two years.
“Following the May 12 election, quick actions by the newly elected provincial government on key issues of interest to the real estate sector may assist these buyers in their home buying decisions, while also potentially empowering those who are currently unable to purchase a home,” says BCREA President Scott Veitch.
Survey findings indicate that availability of affordable properties is the key barrier in a home purchasing decision. Other major financial barriers include employment security, ability to qualify for a mortgage and the provincial Property Transfer Tax.
“We’ve never reached out to the public quite like this before,” notes Veitch. “This survey helped create a clearer picture of the key issues facing homeowners, renters, buyers and sellers in this province. When the new government is formed, the information in this survey will help uask for changes that make home ownership
The survey findings also provide information on the green choices BC residents are making at home and the data suggests that about three out of every four British Columbians have already taken steps to make their homes more environmentally friendly.
Water conservation, home energy assessments and general awareness of federal and provincial green programs are also addressed by the findings.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
Sponsored by the British Columbia Real Estate Association (BCREA), the January 2009 Mustel Group survey examines the top affordability barriers in the province and how provincial taxes and homeowner assistance programs impact BC buyers.
A total of 38 per cent of British Columbians plan or hope to purchase a property within the next five years, with about half of these potential buyers expecting to do so in the next two years.
“Following the May 12 election, quick actions by the newly elected provincial government on key issues of interest to the real estate sector may assist these buyers in their home buying decisions, while also potentially empowering those who are currently unable to purchase a home,” says BCREA President Scott Veitch.
Survey findings indicate that availability of affordable properties is the key barrier in a home purchasing decision. Other major financial barriers include employment security, ability to qualify for a mortgage and the provincial Property Transfer Tax.
“We’ve never reached out to the public quite like this before,” notes Veitch. “This survey helped create a clearer picture of the key issues facing homeowners, renters, buyers and sellers in this province. When the new government is formed, the information in this survey will help uask for changes that make home ownership
The survey findings also provide information on the green choices BC residents are making at home and the data suggests that about three out of every four British Columbians have already taken steps to make their homes more environmentally friendly.
Water conservation, home energy assessments and general awareness of federal and provincial green programs are also addressed by the findings.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
Housing Starts Move up in March
The seasonally adjusted annual rate1 of housing starts increased to 154,700 units in March from 136,100 units in February, according to Canada Mortgage and Housing Corporation (CMHC).
“Higher multiple starts in Ontario and Quebec were the main contributors to the rise in new construction activity in March,” said Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre. “While the multiples segment experienced the largest increase, the overall boost in starts was broad based, encompassing the singles segment as well.”
The seasonally adjusted annual rate of urban starts increased 17 per cent to 127,900 units in March. Urban multiple starts increased 28.3 per cent to 81,500 units, while urban single starts moved up by 1.3 per cent to 46,400 units in March.
March’s seasonally adjusted annual rate of urban starts increased by 35 per cent in Ontario and by 23.3 per cent in Quebec. Urban starts declined by 17.3 per cent in British Columbia, by 7.9 per cent in Atlantic Canada, and by 7.5 per cent in the Prairies.
Rural starts were estimated at a seasonally adjusted annual rate of 26,800 units in March2.
New home construction is now at a more sustainable level after having been exceptionally strong over the past 7 years, exceeding 200,000 units per year.
CMHC OTTAWA, April 8, 2009
“Higher multiple starts in Ontario and Quebec were the main contributors to the rise in new construction activity in March,” said Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre. “While the multiples segment experienced the largest increase, the overall boost in starts was broad based, encompassing the singles segment as well.”
The seasonally adjusted annual rate of urban starts increased 17 per cent to 127,900 units in March. Urban multiple starts increased 28.3 per cent to 81,500 units, while urban single starts moved up by 1.3 per cent to 46,400 units in March.
March’s seasonally adjusted annual rate of urban starts increased by 35 per cent in Ontario and by 23.3 per cent in Quebec. Urban starts declined by 17.3 per cent in British Columbia, by 7.9 per cent in Atlantic Canada, and by 7.5 per cent in the Prairies.
Rural starts were estimated at a seasonally adjusted annual rate of 26,800 units in March2.
New home construction is now at a more sustainable level after having been exceptionally strong over the past 7 years, exceeding 200,000 units per year.
CMHC OTTAWA, April 8, 2009
Wednesday, March 18, 2009
Buyers drawn into real estate market in February
Resale housing activity in Canada in February 2009 was up from seasonally adjusted levels the previous month, according to statistics released by The Canadian Real Estate Association (CREA).
A total of 28,669 homes traded hands via the Multiple Listing Service® (MLS®) nationally in February 2009 on a seasonally adjusted basis. This is 8.6 per cent above seasonally adjusted levels in January 2009, and the first monthly increase in activity since September 2008. Seasonally adjusted activity in February also surpassed levels reported in November and December of 2008.
Monthly seasonal increases in activity were largest in British Columbia (14.4 per cent), Nova Scotia (12.7 per cent), and Alberta (11.9 per cent). In Ontario and Quebec, the monthly rise was on par with the national increase.
“Typically the Spring market we’re moving into generates more activity, and this year there are the benefits from historically low mortgage rates and improved affordability in most markets,” says the President of The Canadian Real Estate Association, Calvin Lindberg. “REALTORS® are reporting increased interest especially from first time homebuyers.”
Actual (not seasonally adjusted) transactions numbered 25,373 units in February 2009. This was 31 per cent below MLS® residential sales levels a year earlier, but it is the smallest year-over-year decline since October 2008.
The supply of homes for sale remains high, but has been trending lower. National MLS® residential new listings numbered 65,060 units in February 2009, down 10.9 per cent from the same month one year ago. On a seasonally adjusted basis, MLS® residential new listings are down 11.4 per cent from their peak reached in May 2008.
“The housing supply is expected to continue easing, but it will take time before it realigns with lower demand,” said CREA Chief Economist Gregory Klump. “Economic uncertainty is keeping home buyers in a cautious mood, so homes are taking longer to sell than in recent years. Lower sales activity at the higher end of the price spectrum will keep the national MLS® residential average price under downward pressure.”
The national average price for home sales via the MLS® was $281,972 in February 2009, 9.2 per cent below February 2008. This is smaller than year-over-year declines observed in the past four months. It is also the first time that the year-over-year decline in the national average price has decelerated since first turning negative in July 2008.
The national MLS® residential average price continues to be pushed downward by lower activity in some of Canada’s more expensive housing markets and by fewer transactions in higher price ranges. The MLS® average home sale price remained up from year-ago levels in Saskatchewan, Manitoba, Quebec, New Brunswick, Prince Edward Island, and Newfoundland & Labrador in February 2009.
“Real estate is local, so it is important that buyers and sellers accurately determine pricing issues in their specific neighbourhood,” adds CREA President Calvin Lindberg, a West Vancouver REALTOR® .”Despite the doom and gloom, there are multiple offers on properties in some markets. That happens when the house is priced comparably to others in the area. Buyers are looking, but they are confused by the barrage of information they’re getting about the economy and the state of real estate. Consumer confidence remains a critical factor for the housing market.”
The downward pressure on the national MLS® residential average price is being skewed lower in large part by fewer sales in British Columbia, Alberta and Ontario, where homes are more expensive and demand has softened most. MLS® home sales in these three provinces accounted for 66 per cent of national activity in February 2009, down from 69 per cent in 2008.
The price trend is similar but less dramatic for the weighted national MLS® average price, which compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. The weighted national MLS® average sale price was down 5.3 per cent year-over-year in February, compared to a 6.1 per cent decline in January.
Seasonally adjusted residential dollar volume for MLS® sales totaled $8 billion in February 2009, an increase of 7.2 per cent from the previous month.
“Consumer confidence will continue to be depressed by a barrage of negative economic news in the months ahead,” said Klump. “Heightened job insecurity will keep many potential homebuyers on the sidelines. Those who are confident about their job situation will benefit from improving affordability in a number of housing markets.”
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
A total of 28,669 homes traded hands via the Multiple Listing Service® (MLS®) nationally in February 2009 on a seasonally adjusted basis. This is 8.6 per cent above seasonally adjusted levels in January 2009, and the first monthly increase in activity since September 2008. Seasonally adjusted activity in February also surpassed levels reported in November and December of 2008.
Monthly seasonal increases in activity were largest in British Columbia (14.4 per cent), Nova Scotia (12.7 per cent), and Alberta (11.9 per cent). In Ontario and Quebec, the monthly rise was on par with the national increase.
“Typically the Spring market we’re moving into generates more activity, and this year there are the benefits from historically low mortgage rates and improved affordability in most markets,” says the President of The Canadian Real Estate Association, Calvin Lindberg. “REALTORS® are reporting increased interest especially from first time homebuyers.”
Actual (not seasonally adjusted) transactions numbered 25,373 units in February 2009. This was 31 per cent below MLS® residential sales levels a year earlier, but it is the smallest year-over-year decline since October 2008.
The supply of homes for sale remains high, but has been trending lower. National MLS® residential new listings numbered 65,060 units in February 2009, down 10.9 per cent from the same month one year ago. On a seasonally adjusted basis, MLS® residential new listings are down 11.4 per cent from their peak reached in May 2008.
“The housing supply is expected to continue easing, but it will take time before it realigns with lower demand,” said CREA Chief Economist Gregory Klump. “Economic uncertainty is keeping home buyers in a cautious mood, so homes are taking longer to sell than in recent years. Lower sales activity at the higher end of the price spectrum will keep the national MLS® residential average price under downward pressure.”
The national average price for home sales via the MLS® was $281,972 in February 2009, 9.2 per cent below February 2008. This is smaller than year-over-year declines observed in the past four months. It is also the first time that the year-over-year decline in the national average price has decelerated since first turning negative in July 2008.
The national MLS® residential average price continues to be pushed downward by lower activity in some of Canada’s more expensive housing markets and by fewer transactions in higher price ranges. The MLS® average home sale price remained up from year-ago levels in Saskatchewan, Manitoba, Quebec, New Brunswick, Prince Edward Island, and Newfoundland & Labrador in February 2009.
“Real estate is local, so it is important that buyers and sellers accurately determine pricing issues in their specific neighbourhood,” adds CREA President Calvin Lindberg, a West Vancouver REALTOR® .”Despite the doom and gloom, there are multiple offers on properties in some markets. That happens when the house is priced comparably to others in the area. Buyers are looking, but they are confused by the barrage of information they’re getting about the economy and the state of real estate. Consumer confidence remains a critical factor for the housing market.”
The downward pressure on the national MLS® residential average price is being skewed lower in large part by fewer sales in British Columbia, Alberta and Ontario, where homes are more expensive and demand has softened most. MLS® home sales in these three provinces accounted for 66 per cent of national activity in February 2009, down from 69 per cent in 2008.
The price trend is similar but less dramatic for the weighted national MLS® average price, which compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. The weighted national MLS® average sale price was down 5.3 per cent year-over-year in February, compared to a 6.1 per cent decline in January.
Seasonally adjusted residential dollar volume for MLS® sales totaled $8 billion in February 2009, an increase of 7.2 per cent from the previous month.
“Consumer confidence will continue to be depressed by a barrage of negative economic news in the months ahead,” said Klump. “Heightened job insecurity will keep many potential homebuyers on the sidelines. Those who are confident about their job situation will benefit from improving affordability in a number of housing markets.”
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
Home Sales Increase in February
British Columbia Real Estate Association (BCREA) reports residential sales dollar volume on the Multiple Listing Service® (MLS®) in BC declined 52 per cent to $1.55 billion in February, compared to the same month last year. Residential unit sales fell 47 per cent to 3,653 units during the same period. The average MLS® residential price in the province was $425,616 in February, down 11 per cent from February 2008.
"After a weak start to the year, BC MLS® residential sales increased 17 per cent in February, on a seasonally adjusted basis," said Cameron Muir, BCREA Chief Economist. MLS® residential sales in the province climbed from a seasonally adjusted and annualized rate of 40,200 units in January to 47,000 units in February.
"It’s not surprising that home sales rebounded from January’s low level," noted Muir. "Reduced home prices and mortgage interest rates have markedly increased affordability. The carrying cost of an average home in BC is approaching a three-year low."
Year-to-date, MLS® residential sales declined 51 per cent to 5,768 units compared to the first two months of 2008. The average MLS® residential declined 10 per cent to $420,966, while MLS® residential dollar volume was down 56 per cent to $2.4 billion over the same period.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
"After a weak start to the year, BC MLS® residential sales increased 17 per cent in February, on a seasonally adjusted basis," said Cameron Muir, BCREA Chief Economist. MLS® residential sales in the province climbed from a seasonally adjusted and annualized rate of 40,200 units in January to 47,000 units in February.
"It’s not surprising that home sales rebounded from January’s low level," noted Muir. "Reduced home prices and mortgage interest rates have markedly increased affordability. The carrying cost of an average home in BC is approaching a three-year low."
Year-to-date, MLS® residential sales declined 51 per cent to 5,768 units compared to the first two months of 2008. The average MLS® residential declined 10 per cent to $420,966, while MLS® residential dollar volume was down 56 per cent to $2.4 billion over the same period.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
Tuesday, February 17, 2009
Cost of home-buying takes a tumble
Investors are on the hunt for deals, economist says
With home sales -- and prices -- dropping in B.C., is now a good time to invest in real estate?
The B.C. Real Estate Association says it just might be, pointing to a large drop in carrying costs for an investment property today compared to a year ago.
"It doesn't matter what the market is doing, I don't say whether or not it's a good time to buy," association chief economist Cameron Muir said in an interview on Monday. "That being said, I would suspect investors are actively looking in the marketplace for bargains. If you compare today versus a year ago, investing in real estate is more attractive than it was then."
Muir made the comment after the release of an association housing survey Monday that concluded the residential sales dollar volume on B.C.'s Multiple Listing Service declined 61 per cent to $873 million in January, compared to the same month in 2008 when sales totalled $2.25 billion. In the Metro Vancouver region, the sales volume was down 62 per cent over the same period, to $413 million from $1.09 billion in January 2008.
Muir -- who said he also believes sales activity in the province will pick up in the spring because of improving affordability resulting from lower mortgage rates and home prices -- cited a typical mortgage payment for a property in January 2009 compared to January 2008.
He said the benchmark price for a two-bedroom condo in Metro Vancouver was $334,602 in January, 11.5 per cent less than the $378,336 the same condo would have sold for 12 months earlier. A typical posted five-year fixed-term mortgage stood at 5.79 per cent in January, much lower than a similar mortgage rate of 7.39 per cent the previous January.
Therefore, he said, a condo with a 10-per-cent down payment (on a 25-year amortization) would have resulted in a monthly mortgage payment of $1,890 this January, nearly $600 less than the January 2008 mortgage payment of $2,468 (property taxes, maintenance fees and mortgage insurance fees not included).
On top of that, he said, there's upward pressure on rents with the same two-bedroom condo renting in October 2008 for about $1,507 a month -- a five-per-cent increase from October 2007.
"For both investors and home buyers, your mortgage payment would be several hundred dollars less than a year ago," said Muir, who noted that investors have so far not been very active since the economic downturn started last year. "As an investor, the cash flow from the rent will more closely match your mortgage payment on the property."
The BCREA survey also showed that residential unit sales fell 57 per cent to 2,115 units during the same period.
The average price on the MLS in B.C. was $412,934 in January, down nine per cent from the same month last year, the survey noted.
Muir said that home sales were sluggish in January, reflecting an overall malaise in consumer confidence and a weaker provincial economy.
Muir said that first-time buyers are especially impacted by the economic news and are holding back because of a lack of confidence. "Demand from first-time buyers has been off significantly. First-time home buyers tend to be younger and not have years of experience in their occupations. Therefore, they have more concerns around job security. They're more vulnerable to layoffs."
Despite that, he said, the BCREA expects sales to rise this spring because of greater affordability and lower interest rates.
Muir noted that Realtors are reporting increased activity from buyers over the past three weeks, but that it hasn't yet materialized in sales statistics. "By all accounts, there's increased interest.
There are more showings and more buyers kicking tires."
Meanwhile, an Ipsos Reid poll released last week showed that a growing number of British Columbians think this is a good time to buy a home, though most say it isn't a good time to sell.
The poll found that some 71 per cent of respondents said it is a somewhat good or very good time to buy real estate. In November, only 60 per cent of respondents told Ipsos Reid it was a good time to buy.
In the latest poll, though, 82 per cent said this is not a good time to sell a home.
The poll also found that British Columbians' expectations for falling prices are changing, with just 42 per cent of respondents saying they expected prices to be lower 12 months from now compared to 57 per cent in November.
The association represents 12 member real estate boards and about 18,000 realtors.
© Copyright (c) The Vancouver Sun By Brian Morton February 17, 2008
With home sales -- and prices -- dropping in B.C., is now a good time to invest in real estate?
The B.C. Real Estate Association says it just might be, pointing to a large drop in carrying costs for an investment property today compared to a year ago.
"It doesn't matter what the market is doing, I don't say whether or not it's a good time to buy," association chief economist Cameron Muir said in an interview on Monday. "That being said, I would suspect investors are actively looking in the marketplace for bargains. If you compare today versus a year ago, investing in real estate is more attractive than it was then."
Muir made the comment after the release of an association housing survey Monday that concluded the residential sales dollar volume on B.C.'s Multiple Listing Service declined 61 per cent to $873 million in January, compared to the same month in 2008 when sales totalled $2.25 billion. In the Metro Vancouver region, the sales volume was down 62 per cent over the same period, to $413 million from $1.09 billion in January 2008.
Muir -- who said he also believes sales activity in the province will pick up in the spring because of improving affordability resulting from lower mortgage rates and home prices -- cited a typical mortgage payment for a property in January 2009 compared to January 2008.
He said the benchmark price for a two-bedroom condo in Metro Vancouver was $334,602 in January, 11.5 per cent less than the $378,336 the same condo would have sold for 12 months earlier. A typical posted five-year fixed-term mortgage stood at 5.79 per cent in January, much lower than a similar mortgage rate of 7.39 per cent the previous January.
Therefore, he said, a condo with a 10-per-cent down payment (on a 25-year amortization) would have resulted in a monthly mortgage payment of $1,890 this January, nearly $600 less than the January 2008 mortgage payment of $2,468 (property taxes, maintenance fees and mortgage insurance fees not included).
On top of that, he said, there's upward pressure on rents with the same two-bedroom condo renting in October 2008 for about $1,507 a month -- a five-per-cent increase from October 2007.
"For both investors and home buyers, your mortgage payment would be several hundred dollars less than a year ago," said Muir, who noted that investors have so far not been very active since the economic downturn started last year. "As an investor, the cash flow from the rent will more closely match your mortgage payment on the property."
The BCREA survey also showed that residential unit sales fell 57 per cent to 2,115 units during the same period.
The average price on the MLS in B.C. was $412,934 in January, down nine per cent from the same month last year, the survey noted.
Muir said that home sales were sluggish in January, reflecting an overall malaise in consumer confidence and a weaker provincial economy.
Muir said that first-time buyers are especially impacted by the economic news and are holding back because of a lack of confidence. "Demand from first-time buyers has been off significantly. First-time home buyers tend to be younger and not have years of experience in their occupations. Therefore, they have more concerns around job security. They're more vulnerable to layoffs."
Despite that, he said, the BCREA expects sales to rise this spring because of greater affordability and lower interest rates.
Muir noted that Realtors are reporting increased activity from buyers over the past three weeks, but that it hasn't yet materialized in sales statistics. "By all accounts, there's increased interest.
There are more showings and more buyers kicking tires."
Meanwhile, an Ipsos Reid poll released last week showed that a growing number of British Columbians think this is a good time to buy a home, though most say it isn't a good time to sell.
The poll found that some 71 per cent of respondents said it is a somewhat good or very good time to buy real estate. In November, only 60 per cent of respondents told Ipsos Reid it was a good time to buy.
In the latest poll, though, 82 per cent said this is not a good time to sell a home.
The poll also found that British Columbians' expectations for falling prices are changing, with just 42 per cent of respondents saying they expected prices to be lower 12 months from now compared to 57 per cent in November.
The association represents 12 member real estate boards and about 18,000 realtors.
© Copyright (c) The Vancouver Sun By Brian Morton February 17, 2008
BC Home Sales Start with a Whimper in 2009
British Columbia Real Estate Association (BCREA) reports residential sales dollar volume on the Multiple Listing Service® (MLS®) in BC declined 61 per cent to $873 million in January, compared to the same month last year. Residential unit sales fell 57 per cent to 2,115 units during the same period. The average MLS® residential price in the province was $412,934 in January, down 9 per cent from January 2008.
"Home sales were sluggish in January, reflecting an overall malaise in consumer confidence and a weakening provincial economy," said Cameron Muir, BCREA Chief Economist.
"Reports of an increasing number of consumers shopping for a home have yet to materialize in the sales statistics," added Muir. "The large selection of homes for sale in January likely reduced any sense of urgency for potential homebuyers to commit to a purchase."
Improving home affordability resulting from lower mortgage rates and home prices is expected to elevate sales activity in the province this spring.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
"Home sales were sluggish in January, reflecting an overall malaise in consumer confidence and a weakening provincial economy," said Cameron Muir, BCREA Chief Economist.
"Reports of an increasing number of consumers shopping for a home have yet to materialize in the sales statistics," added Muir. "The large selection of homes for sale in January likely reduced any sense of urgency for potential homebuyers to commit to a purchase."
Improving home affordability resulting from lower mortgage rates and home prices is expected to elevate sales activity in the province this spring.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
MLS® home sales ease in January
OTTAWA – February 13th, 2009 – The number of properties sold via the MLS® systems of real estate boards in Canada slipped further in January 2009, according to statistics released by The Canadian Real Estate Association (CREA).
Seasonally adjusted residential MLS® sales activity numbered 26,376 units in January 2009. This is 3.1 per cent below activity in December 2008, and a decline of 37.3 per cent in activity compared to January 2008.
Monthly percentage declines in seasonally adjusted activity in January 2009 were on par with those in December 2008 (-2.4 per cent month-over-month), and moderate by comparison to October (-14.9 per cent) and November 2008 (-11.8 per cent).
Monthly declines in seasonally adjusted sales activity in British Columbia and Ontario pulled national activity statistics lower, and offset monthly increases in MLS® residential sales activity in Manitoba, and Newfoundland & Labrador.
Actual MLS® resale housing activity totaled 16,343 sales nationally in January 2009, down 40.9 per cent on a yearover-year basis. Only Prince Edward Island recorded an increase in residential units sold, up two per cent compared to January 2008.
The supply of homes for sale remains high, but is trending lower nationally. The decline in new MLS® listings is trending lower in line with sales activity in many regions. Seasonally adjusted new MLS® residential listings numbered 69,875 units in January 2009. This is down three per cent from the previous month, and 13 per cent below the peak reached in May of last year.
The actual (unadjusted) number of new listings on the MLS® systems of real estate boards in Canada posted the largest year-over-year decline on record in January 2009, falling 14.2 per cent from the level in January 2008. The decline in supply to meet lower demand is expected to help stabilize the resale housing market balance and put a floor under prices.
“There is no doubt the market is not as active as it was last year, but there are certainly buyers and sellers in the Canadian residential market,” says the President of the Canadian Real Estate Association, Calvin Lindberg of Vancouver.
“In many markets, transactions have a tendency to take longer because of negotiations between the two. Realistic pricing is the key to the sale of residential property in this market. Conditions also vary from one neighbourhood to another, so buyers and sellers should know those details.”
CREA’s President is also confident federal budget initiatives for homebuyers will have an impact later in the year. “The increase in the Home Buyers’ Plan and the First-Time Home Buyers’ Tax Credit to cover closing costs are both important for first time home buyers, and they are an important factor in an active housing market.”
The national average price for home sales via the MLS® in January 2009 is down 11.3 per cent compared to January 2009. This national average price continues to be skewed lower in large part by fewer sales in British Columbia, Alberta and Ontario, where homes are more expensive and demand has softened most. The MLS® average home sale price was up from year-ago levels in Saskatchewan, Manitoba, Prince Edward Island, and Newfoundland & Labrador.
The price trend is similar but less dramatic for the weighted national (and major market) MLS® average price, which compensates for changes in provincial (and major market) sales activity by taking into account provincial (and major market) proportions of privately owned housing stock. The weighted national MLS® average sale price was down 6.2 per cent year-over-year in January. The weighted major market MLS® average home sale price was down 4.6 per cent year-over-year in January.
The major market MLS® residential average price declined by less than the national average on a year-overyear basis. Major markets in which the average price declined by less than the national average include Toronto, Kitchener-Waterloo, St. Catharines, Sudbury, Hamilton-Burlington, Edmonton, London & St. Thomas, and Windsor.
By contrast to year over year declines in the national and major market average price in January 2009, average prices were up from year ago levels in St. John’s, Halifax-Dartmouth, Quebec City, Regina, Saskatoon, Saguenay, Oshawa, Winnipeg, Thunder Bay, Montreal, Ottawa, and Gatineau.
Seasonally adjusted residential dollar volume for MLS® sales totaled $7.4 billion in January 2009, down 3.7 per cent from the previous month and the lowest level since May 2003.
“Weak sales activity in January follows the CREA forecast that national MLS® sales activity will be well below the activity of last year,” says CREA Chief Economist Gregory Klump. Affordability has improved and will be better during the spring home buying season in many markets compared to last year. However weak consumer confidence is likely to continue squeezing sales activity during the spring home buying season.”
“Copyright Canadian Real Estate Association. Reprinted with permission.”
Seasonally adjusted residential MLS® sales activity numbered 26,376 units in January 2009. This is 3.1 per cent below activity in December 2008, and a decline of 37.3 per cent in activity compared to January 2008.
Monthly percentage declines in seasonally adjusted activity in January 2009 were on par with those in December 2008 (-2.4 per cent month-over-month), and moderate by comparison to October (-14.9 per cent) and November 2008 (-11.8 per cent).
Monthly declines in seasonally adjusted sales activity in British Columbia and Ontario pulled national activity statistics lower, and offset monthly increases in MLS® residential sales activity in Manitoba, and Newfoundland & Labrador.
Actual MLS® resale housing activity totaled 16,343 sales nationally in January 2009, down 40.9 per cent on a yearover-year basis. Only Prince Edward Island recorded an increase in residential units sold, up two per cent compared to January 2008.
The supply of homes for sale remains high, but is trending lower nationally. The decline in new MLS® listings is trending lower in line with sales activity in many regions. Seasonally adjusted new MLS® residential listings numbered 69,875 units in January 2009. This is down three per cent from the previous month, and 13 per cent below the peak reached in May of last year.
The actual (unadjusted) number of new listings on the MLS® systems of real estate boards in Canada posted the largest year-over-year decline on record in January 2009, falling 14.2 per cent from the level in January 2008. The decline in supply to meet lower demand is expected to help stabilize the resale housing market balance and put a floor under prices.
“There is no doubt the market is not as active as it was last year, but there are certainly buyers and sellers in the Canadian residential market,” says the President of the Canadian Real Estate Association, Calvin Lindberg of Vancouver.
“In many markets, transactions have a tendency to take longer because of negotiations between the two. Realistic pricing is the key to the sale of residential property in this market. Conditions also vary from one neighbourhood to another, so buyers and sellers should know those details.”
CREA’s President is also confident federal budget initiatives for homebuyers will have an impact later in the year. “The increase in the Home Buyers’ Plan and the First-Time Home Buyers’ Tax Credit to cover closing costs are both important for first time home buyers, and they are an important factor in an active housing market.”
The national average price for home sales via the MLS® in January 2009 is down 11.3 per cent compared to January 2009. This national average price continues to be skewed lower in large part by fewer sales in British Columbia, Alberta and Ontario, where homes are more expensive and demand has softened most. The MLS® average home sale price was up from year-ago levels in Saskatchewan, Manitoba, Prince Edward Island, and Newfoundland & Labrador.
The price trend is similar but less dramatic for the weighted national (and major market) MLS® average price, which compensates for changes in provincial (and major market) sales activity by taking into account provincial (and major market) proportions of privately owned housing stock. The weighted national MLS® average sale price was down 6.2 per cent year-over-year in January. The weighted major market MLS® average home sale price was down 4.6 per cent year-over-year in January.
The major market MLS® residential average price declined by less than the national average on a year-overyear basis. Major markets in which the average price declined by less than the national average include Toronto, Kitchener-Waterloo, St. Catharines, Sudbury, Hamilton-Burlington, Edmonton, London & St. Thomas, and Windsor.
By contrast to year over year declines in the national and major market average price in January 2009, average prices were up from year ago levels in St. John’s, Halifax-Dartmouth, Quebec City, Regina, Saskatoon, Saguenay, Oshawa, Winnipeg, Thunder Bay, Montreal, Ottawa, and Gatineau.
Seasonally adjusted residential dollar volume for MLS® sales totaled $7.4 billion in January 2009, down 3.7 per cent from the previous month and the lowest level since May 2003.
“Weak sales activity in January follows the CREA forecast that national MLS® sales activity will be well below the activity of last year,” says CREA Chief Economist Gregory Klump. Affordability has improved and will be better during the spring home buying season in many markets compared to last year. However weak consumer confidence is likely to continue squeezing sales activity during the spring home buying season.”
“Copyright Canadian Real Estate Association. Reprinted with permission.”
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