BCREA Housing Forecast Update - First Quarter 2011
Vancouver, BC – February 23, 2011. The British Columbia Real Estate Association (BCREA) released its Housing Forecast for the first quarter of 2011 today.
BC Multiple Listing Service® (MLS®) residential sales are forecast to increase 8 per cent from 74,640 units in 2010 to 80,900 units this year, and increase another 4 per cent to 83,950 units in 2012.
“British Columbia housing markets are returning to normalcy after two years of volatility,” said Cameron Muir, BCREA Chief Economist. “Employment and population growth will fuel consumer demand over the next two years. However, higher mortgage interest rates and tighter credit conditions for low equity home buyers will limit home sales to below the ten-year average of 87,600 units.”
“Total active residential listings in the province declined 14 per cent since last spring. However, the inventory of homes for sale is expected to edge higher as the number of new listings to the market advances during the first two quarters of 2011,” added Muir. “Regional market differences continue in the province, with Vancouver trending into a seller’s market, while the Okanagan, Kootenay and Kamloops markets trend from a buyer’s market toward balanced conditions.”
The average MLS® residential price is forecast to increase 2 per cent to $517,000 this year and remain relatively unchanged in 2012, albeit declining by 0.4 per cent to $515,400
Copyright BCREA reprinted with permission
Thursday, February 24, 2011
Tuesday, February 22, 2011
'Condo King' sells 128 Olympic Village units
Vancouver real estate guru Bob Rennie has managed to sell 128 condos at the former Olympic Village site over the weekend, he announced on Tuesday morning.
The sales are still subject to financing, but Rennie says response has been so strong he's considering clawing back some of the units that had been identified as rental condos.
Rennie says taxpayers of Vancouver, who are currently financially responsible for the project, should be pleased with the response. He had promised the receiver of the troubled condominium development that he would sell 60 condos in 60 days.
"I think we are off and running now and I just want to be cautiously optimistic that we have stabilized the asset for the taxpayer and now its time to move forward on an orderly basis," said Rennie.
The average price for the units sold was $778,000. The most expensive unit sold was nearly $3 million and the cheapest was $329,000.
"If we are together in a week and I can say I've sold another 20 or 25, I'll be a really happy guy," he said.
Tent city protest planned
As Rennie spoke, protesters gathered at the Olympic village site, angry the village contains far fewer social housing units than originally promised.
The city originally planned to use about 250 units in the development as low income social housing, but that figure was cut to 125 last year, when the city decided to rent 125 of the units to emergency workers at market rates.
Organizer Nathan Crompton says a tent village will be erected at the site on Saturday.
"I hope that Vancouver sees this as a city-wide issue and that thousands of people come down and to say that we are going to disrupt this marketing effort every day until we get the housing legacy that was promised," said Crompton.
Taxpayers still on the hook
A total of 230 units were offered for sale this past weekend. Another 265 units in the development were sold before completion and 250 have been assigned as rental stock by the city.
The $1 billion development, which has a total of 1,100 residential suites, has been in financial trouble since the original financiers backed out of the project prior to the 2010 Olympic Games.
The City of Vancouver was forced to step in and provide about $700 million in emergency financing. But the downturn in the real estate market made it difficult to sell the units after the Games, forcing the city to eventually agree to Rennie's plan to slash prices last week by an average of 30 per cent.
Rennie, who's been nicknamed the 'Condo King,' earned his reputation as real estate marketing guru by selling thousands of condo in projects across B.C.'s Lower Mainland
CBC NEWS February 22, 2011
The sales are still subject to financing, but Rennie says response has been so strong he's considering clawing back some of the units that had been identified as rental condos.
Rennie says taxpayers of Vancouver, who are currently financially responsible for the project, should be pleased with the response. He had promised the receiver of the troubled condominium development that he would sell 60 condos in 60 days.
"I think we are off and running now and I just want to be cautiously optimistic that we have stabilized the asset for the taxpayer and now its time to move forward on an orderly basis," said Rennie.
The average price for the units sold was $778,000. The most expensive unit sold was nearly $3 million and the cheapest was $329,000.
"If we are together in a week and I can say I've sold another 20 or 25, I'll be a really happy guy," he said.
Tent city protest planned
As Rennie spoke, protesters gathered at the Olympic village site, angry the village contains far fewer social housing units than originally promised.
The city originally planned to use about 250 units in the development as low income social housing, but that figure was cut to 125 last year, when the city decided to rent 125 of the units to emergency workers at market rates.
Organizer Nathan Crompton says a tent village will be erected at the site on Saturday.
"I hope that Vancouver sees this as a city-wide issue and that thousands of people come down and to say that we are going to disrupt this marketing effort every day until we get the housing legacy that was promised," said Crompton.
Taxpayers still on the hook
A total of 230 units were offered for sale this past weekend. Another 265 units in the development were sold before completion and 250 have been assigned as rental stock by the city.
The $1 billion development, which has a total of 1,100 residential suites, has been in financial trouble since the original financiers backed out of the project prior to the 2010 Olympic Games.
The City of Vancouver was forced to step in and provide about $700 million in emergency financing. But the downturn in the real estate market made it difficult to sell the units after the Games, forcing the city to eventually agree to Rennie's plan to slash prices last week by an average of 30 per cent.
Rennie, who's been nicknamed the 'Condo King,' earned his reputation as real estate marketing guru by selling thousands of condo in projects across B.C.'s Lower Mainland
CBC NEWS February 22, 2011
Housing Activity to Move in Line with Demographic Fundamentals in 2011
After trending lower in the second half of 2010, housing starts are forecast to stabilize at levels consistent with demographic fundamentals in 2011 and 2012, according to Canada Mortgage and Housing Corporation’s (CMHC) first quarter Housing Market Outlook, Canada Edition.
Housing starts will be in the range of 157,300 to 192,900 units in 2011, with a point forecast of 177,600 units. In 2012, housing starts will be in the range of 154,600 to 211,200 units, with a point forecast of 183,800 units.
“Modest economic growth will continue to push employment levels higher this year and next. This, in conjunction with relatively low mortgage rates, will continue to support demand for new homes. Housing starts will remain in line with long term demographic fundamentals over the course of 2011 and 2012,” said Bob Dugan, Chief Economist for CMHC.
Existing home sales will be in the range of 398,500 to 485,500 units in 2011, with a point forecast of 441,500 units. In 2012, MLS®2 sales will move up and are expected to be in the range of 406,300 to 519,700 units, with a point forecast of 462,900 units.
Mr. Dugan also noted that the existing home market will remain in the balanced to sellers’ market range in 2011 and 2012. As a result, growth in the average MLS® price is expected to remain in line with economy-wide inflation in 2011 and 2012.
CMHC February 17, 2011
Housing starts will be in the range of 157,300 to 192,900 units in 2011, with a point forecast of 177,600 units. In 2012, housing starts will be in the range of 154,600 to 211,200 units, with a point forecast of 183,800 units.
“Modest economic growth will continue to push employment levels higher this year and next. This, in conjunction with relatively low mortgage rates, will continue to support demand for new homes. Housing starts will remain in line with long term demographic fundamentals over the course of 2011 and 2012,” said Bob Dugan, Chief Economist for CMHC.
Existing home sales will be in the range of 398,500 to 485,500 units in 2011, with a point forecast of 441,500 units. In 2012, MLS®2 sales will move up and are expected to be in the range of 406,300 to 519,700 units, with a point forecast of 462,900 units.
Mr. Dugan also noted that the existing home market will remain in the balanced to sellers’ market range in 2011 and 2012. As a result, growth in the average MLS® price is expected to remain in line with economy-wide inflation in 2011 and 2012.
CMHC February 17, 2011
Wednesday, February 16, 2011
BCREA Housing Market Update - In Focus: Differing BC Market Conditions (Feb 2011)
BC Real Estate Association (BCREA) Chief Economist Cameron Muir discusses the January 2011 statistics and an in depth look at the differing BC market conditions.
Copyright BCREA reprinted with permission
Monday, February 14, 2011
Housing Market Continues Normalization Trend
The British Columbia Real Estate Association (BCREA) reports that Multiple Listing Service® (MLS®) residential sales in the province climbed 7 per cent in January from December 2010, on a seasonally adjusted basis. Compared to January of last year, MLS® residential unit sales were down 10 per cent to 4,137 units. The average MLS® residential price rose 11.5 per cent to $548,183 in January compared to the same month last year.
“Consumer demand continues to normalize alongside overall economic conditions,” said Cameron Muir, BCREA Chief Economist. “However, the pace of growth in home sales experienced since last summer is likely to moderate in the coming months as tighter credit conditions and upward pressure on mortgage interest rates impacts affordability and purchasing power.”
The inventory of homes for sale remained below 47,000 units for the third consecutive month in January, down 14 per cent from the spring of last year. “While demand and supply conditions province-wide exhibited balance last month, regional differences are pronounced,” added Muir. “Housing markets in the Lower Mainland/ South Coast exhibited stronger conditions than in the Kootenays and Okanagan, which remained in buyer’s market territory in January.”
Copyright BCREA reprinted with permission
“Consumer demand continues to normalize alongside overall economic conditions,” said Cameron Muir, BCREA Chief Economist. “However, the pace of growth in home sales experienced since last summer is likely to moderate in the coming months as tighter credit conditions and upward pressure on mortgage interest rates impacts affordability and purchasing power.”
The inventory of homes for sale remained below 47,000 units for the third consecutive month in January, down 14 per cent from the spring of last year. “While demand and supply conditions province-wide exhibited balance last month, regional differences are pronounced,” added Muir. “Housing markets in the Lower Mainland/ South Coast exhibited stronger conditions than in the Kootenays and Okanagan, which remained in buyer’s market territory in January.”
Copyright BCREA reprinted with permission
Commercial real estate booming again – now what?
The commercial real estate market saw an unprecedented recovery last year, with investment growing 48 per cent as the economy improved and investors returned to the market.
Canadian commercial real estate sales volume reached $18.9-billion in 2010, according to CB Richard Ellis, from $12.7-billion in 2009 – though it’s still a long way from the $19.8-billion posted in 2005.
“Once we were a few weeks into 2010, we could feel momentum picking up so that by the year-end, we were about where we expected it to be,” said John O’Bryan, CBRE’s vice-chairman. “It was really a coast-to-coast recovery – something we haven’t seen before.”
The only market that didn’t see an increase in volume was London, Ont. Toronto finished the year with $7.4-billion in trades, up from $3.8-billion in 2009 as volume grew by 95 per cent.
There were some large deals that helped boost the numbers, including ING Groep NV’s sale of its Canadian portfolio for $2.2-billion to KingSett Capital and Alberta Investment Management Corp.
“It was a good year relative to 2008, but volumes are still down considerably from where they were prior to the recession,” said Colliers International senior vice-president Milton Lamb.
Here’s what three experts expect to happen next:
John O’Bryan, vice-chairman of CB Richard Ellis
Hot: Retail
“We all talk about Target as if it were the only one, but there will be lots of movement. There are several chains that find expansion in the United States difficult, but they are looking to Canada. I think you can finally look for some rental traction in industrial as well, especially in the last half of 2011.”
Cold: Calgary
“The terrific pace that Calgary set last year in terms of office leasing has to slow. It has to settle down – it was a great performance but it can’t keep going at that rate. And while this could be a good year for hotels in terms of trading, there are still going to be issues around financing. That’s the grey cloud over that industry.”
George Carras, president of RealNet Canada
Hot: Big deals
“Big is back – regardless if it’s retail, industrial or office, if it’s got proven income, then it’s going to be hot. You’ve got an abundant supply of buyers who like what they see in those spaces. So big is in vogue – and by that I mean deals over $50-million. And when you see the commercial-mortgage-backed securities market is showing a bit of a pulse, that’s pretty exciting.”
Cold: Bargain hunting
“Distressed-deal shopping. Everyone who had their powder dry last year waiting and waiting and waiting for distressed sales finally figured out it wasn’t going to happen. So now they are looking to deploy that capital on other assets, if they haven’t already. There’s also less appetite for value-added properties – people are mindful of how much lease-up risk they want to take on.”
Mark Rose, chief executive officer of Avison Young
Hot: U.S. real estate
“The No. 1 theme I see in Canada is Canadian investment in U.S. real estate. It started last year, when there was $2-billion invested. The Canadian dollar is at a premium and could go higher, and there are opportunities in the distressed market to achieve double-digit returns. Last year you saw companies such as Brookfield, RioCan, Artis, CPPIB [Canada Pension Plan Investment Board] and Manulife down there – this year, you’ll see them and maybe some others.”
Cold: Snap decisions
“There isn’t a market in Canada that couldn’t be made better if there was more confidence on the part of decision makers. Those who actually occupy real estate are taking their time making decisions and don’t yet have confidence in a full recovery. That is holding us back. It is very difficult to pick out a province where that lack of confidence isn’t a factor in the market.”
Canadian commercial real estate sales volume reached $18.9-billion in 2010, according to CB Richard Ellis, from $12.7-billion in 2009 – though it’s still a long way from the $19.8-billion posted in 2005.
“Once we were a few weeks into 2010, we could feel momentum picking up so that by the year-end, we were about where we expected it to be,” said John O’Bryan, CBRE’s vice-chairman. “It was really a coast-to-coast recovery – something we haven’t seen before.”
The only market that didn’t see an increase in volume was London, Ont. Toronto finished the year with $7.4-billion in trades, up from $3.8-billion in 2009 as volume grew by 95 per cent.
There were some large deals that helped boost the numbers, including ING Groep NV’s sale of its Canadian portfolio for $2.2-billion to KingSett Capital and Alberta Investment Management Corp.
“It was a good year relative to 2008, but volumes are still down considerably from where they were prior to the recession,” said Colliers International senior vice-president Milton Lamb.
Here’s what three experts expect to happen next:
John O’Bryan, vice-chairman of CB Richard Ellis
Hot: Retail
“We all talk about Target as if it were the only one, but there will be lots of movement. There are several chains that find expansion in the United States difficult, but they are looking to Canada. I think you can finally look for some rental traction in industrial as well, especially in the last half of 2011.”
Cold: Calgary
“The terrific pace that Calgary set last year in terms of office leasing has to slow. It has to settle down – it was a great performance but it can’t keep going at that rate. And while this could be a good year for hotels in terms of trading, there are still going to be issues around financing. That’s the grey cloud over that industry.”
George Carras, president of RealNet Canada
Hot: Big deals
“Big is back – regardless if it’s retail, industrial or office, if it’s got proven income, then it’s going to be hot. You’ve got an abundant supply of buyers who like what they see in those spaces. So big is in vogue – and by that I mean deals over $50-million. And when you see the commercial-mortgage-backed securities market is showing a bit of a pulse, that’s pretty exciting.”
Cold: Bargain hunting
“Distressed-deal shopping. Everyone who had their powder dry last year waiting and waiting and waiting for distressed sales finally figured out it wasn’t going to happen. So now they are looking to deploy that capital on other assets, if they haven’t already. There’s also less appetite for value-added properties – people are mindful of how much lease-up risk they want to take on.”
Mark Rose, chief executive officer of Avison Young
Hot: U.S. real estate
“The No. 1 theme I see in Canada is Canadian investment in U.S. real estate. It started last year, when there was $2-billion invested. The Canadian dollar is at a premium and could go higher, and there are opportunities in the distressed market to achieve double-digit returns. Last year you saw companies such as Brookfield, RioCan, Artis, CPPIB [Canada Pension Plan Investment Board] and Manulife down there – this year, you’ll see them and maybe some others.”
Cold: Snap decisions
“There isn’t a market in Canada that couldn’t be made better if there was more confidence on the part of decision makers. Those who actually occupy real estate are taking their time making decisions and don’t yet have confidence in a full recovery. That is holding us back. It is very difficult to pick out a province where that lack of confidence isn’t a factor in the market.”
STEVE LADURANTAYE — REAL ESTATE REPORTER Globe and Mail Feb 14, 2011
Another attempt to certify home inspectors
Despite efforts for many years by several individuals and groups, the Canadian home inspection industry is still very much unregulated. British Columbia is the only province that has licensed practitioners, although three or four other jurisdictions are considering legislation.
In this unregulated sector, anyone can simply print some business cards, buy a flashlight and clipboard, and promote themselves as a home inspector. On top of that, some associations, training schools and even government agencies have convinced thousands of gullible people that a two-week course or even a short online quiz will qualify them to earn a high income inspecting houses for an even more unsuspecting public.
In 2006, the Canadian Association of Home and Property Inspectors (CAHPI) announced that after 10 years of meetings and hard work, they, along with CMHC, HRSDC, the Construction Sector Council and other industry partners, had successfully developed and implemented a national certification for Canadian home inspectors. The goal was to create a large group of well-trained, field-tested and qualified home inspectors on whom the public and others connected to a home purchasing transaction could rely. The program would be administered by a CAHPI ‘arms-length’ committee (National Certification Authority – NCA) that would process all inspectors fairly and objectively.
In the years since then, more than 500 inspectors have applied, had their backgrounds evaluated, been field tested and received their National Certification. However, the estimated number of home inspectors in Canada is between 5,000 and 6,000, so obviously the program has attracted only a very small percentage of the inspector population.
Since the program was created to bring some uniformity and credibility to the industry, the results were less than stellar – disappointing those who had seen the program as an opportunity to bring more legitimacy to the relatively new home inspection industry. It became apparent that since CAHPI’s membership accounted for only about 15 per cent of the total number of inspectors in the country, non-members were not comfortable that the NCA would process and test them objectively, despite CAHPI’s genuine assurances. As a result, applications for national certification slowed to a trickle in recent years.
In early 2010, in an effort to breathe new life into the certification program, and to address the concerns of the industry, a new, fully independent, non-partisan certification body was established, with representation from all existing associations but no affiliation with or obligations to any, including CAHPI.
The National Home Inspector Certification Council (NHICC) was incorporated and quickly received recognition, encouragement and support from government agencies, home inspection associations and other stakeholders. The NHICC is a certifying body only, and is not an association, so it is not seen by the associations as competing for members. Most organizations have their own ‘certifications’ that can be complemented by the National Certification. One national group, the Professional Home and Property Inspectors of Canada (PHPIC) based its Mission Statement on support for the NCP and they have actually adopted the NCP requirements as their own. The program also makes it possible for inspectors who choose to not be members of any association to be recognized and certified competent by an independent third party.
The NHICC has embraced the requirements of CAN-P-9 and has also applied for accreditation from two international accrediting organizations, the Institute of Credentialing Excellence (ICE) and the International Organization for Standardization (ISO). This will provide evidence that the program and the policies, procedures and governance of the NHICC are being true to the terms and the spirit of the original certification model.
Home inspectors can now take comfort knowing that their education and abilities will be compared uniformly and objectively by the NHICC to the National Occupational Standards for Canadian Home Inspectors. Consumers and others can be assured that despite the proliferation of pseudo-professional organizations and groups posing as legitimate professional home inspection associations, there is ONE national, strong and valid certification that exists to rigorously evaluate and test inspectors based on actual occupational standards that were developed through thousands of hours of study and debate.
With the National Certification Program now revived and welcoming applications, home inspectors can once again take advantage of a vehicle that will objectively verify their competence. Consumers and others can choose home inspectors from any association they wish, but they can enhance their chances of getting a competent inspector by looking for someone who is also a National Certificate Holder (NCH) as designated by the NHICC.
In this unregulated sector, anyone can simply print some business cards, buy a flashlight and clipboard, and promote themselves as a home inspector. On top of that, some associations, training schools and even government agencies have convinced thousands of gullible people that a two-week course or even a short online quiz will qualify them to earn a high income inspecting houses for an even more unsuspecting public.
In 2006, the Canadian Association of Home and Property Inspectors (CAHPI) announced that after 10 years of meetings and hard work, they, along with CMHC, HRSDC, the Construction Sector Council and other industry partners, had successfully developed and implemented a national certification for Canadian home inspectors. The goal was to create a large group of well-trained, field-tested and qualified home inspectors on whom the public and others connected to a home purchasing transaction could rely. The program would be administered by a CAHPI ‘arms-length’ committee (National Certification Authority – NCA) that would process all inspectors fairly and objectively.
In the years since then, more than 500 inspectors have applied, had their backgrounds evaluated, been field tested and received their National Certification. However, the estimated number of home inspectors in Canada is between 5,000 and 6,000, so obviously the program has attracted only a very small percentage of the inspector population.
Since the program was created to bring some uniformity and credibility to the industry, the results were less than stellar – disappointing those who had seen the program as an opportunity to bring more legitimacy to the relatively new home inspection industry. It became apparent that since CAHPI’s membership accounted for only about 15 per cent of the total number of inspectors in the country, non-members were not comfortable that the NCA would process and test them objectively, despite CAHPI’s genuine assurances. As a result, applications for national certification slowed to a trickle in recent years.
In early 2010, in an effort to breathe new life into the certification program, and to address the concerns of the industry, a new, fully independent, non-partisan certification body was established, with representation from all existing associations but no affiliation with or obligations to any, including CAHPI.
The National Home Inspector Certification Council (NHICC) was incorporated and quickly received recognition, encouragement and support from government agencies, home inspection associations and other stakeholders. The NHICC is a certifying body only, and is not an association, so it is not seen by the associations as competing for members. Most organizations have their own ‘certifications’ that can be complemented by the National Certification. One national group, the Professional Home and Property Inspectors of Canada (PHPIC) based its Mission Statement on support for the NCP and they have actually adopted the NCP requirements as their own. The program also makes it possible for inspectors who choose to not be members of any association to be recognized and certified competent by an independent third party.
The NHICC has embraced the requirements of CAN-P-9 and has also applied for accreditation from two international accrediting organizations, the Institute of Credentialing Excellence (ICE) and the International Organization for Standardization (ISO). This will provide evidence that the program and the policies, procedures and governance of the NHICC are being true to the terms and the spirit of the original certification model.
Home inspectors can now take comfort knowing that their education and abilities will be compared uniformly and objectively by the NHICC to the National Occupational Standards for Canadian Home Inspectors. Consumers and others can be assured that despite the proliferation of pseudo-professional organizations and groups posing as legitimate professional home inspection associations, there is ONE national, strong and valid certification that exists to rigorously evaluate and test inspectors based on actual occupational standards that were developed through thousands of hours of study and debate.
With the National Certification Program now revived and welcoming applications, home inspectors can once again take advantage of a vehicle that will objectively verify their competence. Consumers and others can choose home inspectors from any association they wish, but they can enhance their chances of getting a competent inspector by looking for someone who is also a National Certificate Holder (NCH) as designated by the NHICC.
REM online Feb 14, 2011 By Bill Mullen
Thursday, February 10, 2011
CREA Boosts Annual Resale Housing Forecast
The Canadian Real Estate Association (CREA) has revised its 2011 forecast for home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards and Associations, and extended it to 2012.
Sales in the second half of 2010 rebounded faster than CREA had previously expected. “The hand-off going into 2011, together with the highs and lows for sales activity posted in 2010, provided guidance for CREA’s revised forecast,” said Gregory Klump, CREA Chief Economist.
“Home buyers recognize that low mortgage interest rates represent a once in a lifetime opportunity. At the same time, they expect that rates will rise, so they’re doing their homework in order to understand what it could mean in terms of higher mortgage payments down the road before they make an offer,” said Georges Pahud, CREA President. “The housing market and buyer psychology is different now than it was at the beginning of last year, so buyers and sellers would do well to consult their REALTOR® to understand local market trends.”
The upward revision to CREA’s forecast for 2011 reflects recent improvements in the consensus economic outlook and a further expected improvement in consumer confidence. National sales activity is now expected to reach 439,900 units in 2011, representing an annual decline of 1.6 per cent. In 2012, CREA forecasts that national sales activity will rebound by three per cent to 453,300 units, which is roughly on par with the ten year average.
“Recent additional changes to mortgage regulations will further ensure that buyers don’t buy more home than they can afford when interest rates inevitably rise,” said Klump. “The announcement of the new changes to mortgage regulations will likely bring forward some sales into the first quarter that would have otherwise occurred later in the year, particularly in some of Canada’s more expensive housing markets. This is expected to produce a milder version of the volatility in sales activity that we saw last year which resulted from additional transitory factors.”
Three transitory factors contributed to volatility in sales activity last year: changes in mortgage regulations announced last February, the early withdrawal by the Bank of Canada of its conditional commitment to keep interest rates on hold until the second half of 2010, and the introduction of the HST in BC and Ontario during the summer of 2010.
CREA expects that home sales activity will gain traction after dipping in the second quarter as the economic recovery and job growth continue, incomes grow, and consumer confidence further improves. “Even though mortgage interest rates are expected to rise later this year, they will still be within short reach of current levels and remain supportive for housing market activity. Strengthening economic fundamentals will keep the housing market in balance, which will keep home prices stable,” said Klump.
The national average home price is forecast to rise 1.3 per cent in 2011 and 2012, to $343,300 and $347,900 respectively. Average price is expected to rise modestly in most provinces, reflecting the continuation of a healthy balance between supply of, and demand for, homes listed for sale. Although the supply of new listings is expected to trend higher, the expected continuation of sellers’ market conditions in Manitoba is forecast to result in a bigger percentage increase in average price in 2011 and 2012 compared to other provinces.
Copyright CREA reprinted with permission
Sales in the second half of 2010 rebounded faster than CREA had previously expected. “The hand-off going into 2011, together with the highs and lows for sales activity posted in 2010, provided guidance for CREA’s revised forecast,” said Gregory Klump, CREA Chief Economist.
“Home buyers recognize that low mortgage interest rates represent a once in a lifetime opportunity. At the same time, they expect that rates will rise, so they’re doing their homework in order to understand what it could mean in terms of higher mortgage payments down the road before they make an offer,” said Georges Pahud, CREA President. “The housing market and buyer psychology is different now than it was at the beginning of last year, so buyers and sellers would do well to consult their REALTOR® to understand local market trends.”
The upward revision to CREA’s forecast for 2011 reflects recent improvements in the consensus economic outlook and a further expected improvement in consumer confidence. National sales activity is now expected to reach 439,900 units in 2011, representing an annual decline of 1.6 per cent. In 2012, CREA forecasts that national sales activity will rebound by three per cent to 453,300 units, which is roughly on par with the ten year average.
“Recent additional changes to mortgage regulations will further ensure that buyers don’t buy more home than they can afford when interest rates inevitably rise,” said Klump. “The announcement of the new changes to mortgage regulations will likely bring forward some sales into the first quarter that would have otherwise occurred later in the year, particularly in some of Canada’s more expensive housing markets. This is expected to produce a milder version of the volatility in sales activity that we saw last year which resulted from additional transitory factors.”
Three transitory factors contributed to volatility in sales activity last year: changes in mortgage regulations announced last February, the early withdrawal by the Bank of Canada of its conditional commitment to keep interest rates on hold until the second half of 2010, and the introduction of the HST in BC and Ontario during the summer of 2010.
CREA expects that home sales activity will gain traction after dipping in the second quarter as the economic recovery and job growth continue, incomes grow, and consumer confidence further improves. “Even though mortgage interest rates are expected to rise later this year, they will still be within short reach of current levels and remain supportive for housing market activity. Strengthening economic fundamentals will keep the housing market in balance, which will keep home prices stable,” said Klump.
The national average home price is forecast to rise 1.3 per cent in 2011 and 2012, to $343,300 and $347,900 respectively. Average price is expected to rise modestly in most provinces, reflecting the continuation of a healthy balance between supply of, and demand for, homes listed for sale. Although the supply of new listings is expected to trend higher, the expected continuation of sellers’ market conditions in Manitoba is forecast to result in a bigger percentage increase in average price in 2011 and 2012 compared to other provinces.
Copyright CREA reprinted with permission
Tuesday, February 8, 2011
Now Is The Perfect Time To Buy
From an interest rate standpoint, now is a perfect time to become a homeowner. But transitioning from renter to homeowner is one of the biggest decisions you’ll make throughout your lifetime. It can also be a stressful experience if you don’t plan ahead by building a budget and saving prior to embarking upon homeownership.
Budgeting is a core ingredient that helps alleviate the stress associated with money issues that can sometimes arise if you purchase a home without knowing all of the associated costs – including down payment, closing expenses, ongoing maintenance, taxes and utilities.
The key is to create a realistic budget based on your goals. Track your spending and make your dollars go further by sticking to your budget once it’s in place. Budgeting offers a step-by-step formula for figuring out how to best save your hard-earned money to invest in homeownership.
Start by listing your household income, then your household expenses, and review your spending habits. All of this can be done on a pad of paper or on a computer spreadsheet.
Keeping receipts for everything that you purchase will enable you to accurately keep track of where your money is going each month so that you can review and make necessary changes to your plan.
Examine all areas of your life from entertainment to the type of food you buy, where you buy your food and clothes, and how and where you travel. Also look at your spending personality and make necessary adjustments. Are you a saver, a splurger, a spontaneous shopper or a hoarder? Become smarter with your money and avoid impulse buying.
If you find you’re spending a lot of money in one area, such as entertainment for instance, set aside a reasonable amount each month and prepare to stop spending money in this area once your budget has been exhausted.
Budgeting provides you with the opportunity to re-evaluate your needs and wants. If you can set your budget solidly in place before you head out home or mortgage shopping, you will be far more prepared to purchase your first home.
Following are three top tips to help you prepare for the purchase of your first home:
1. Set up a savings account. You can deposit a predetermined amount into this account each pay period that you will not touch unless it’s absolutely necessary. This will enable you to put money aside for a down payment and cover closing costs, as well as address ongoing homeownership expenses such as maintenance, taxes and utilities.
2. Save up for big-ticket items. As you accumulate money in your savings account, you will be able to also save for specific purchases to help furnish your home – avoiding the buy now, pay later mentality, which can have a negative impact on your credit when you’re seeking mortgage financing.
3. Surround yourself with a team of professionals. When you’re getting ready to make your first home purchase, work with your trusted real estate professional and find a licensed mortgage agent/broker. Experts are invaluable to you as you set out on the road to homeownership because we help first-time buyers through the home purchase and financing processes every day. Experts can answer all of your questions and set your mind at ease. Mortgage agents, for instance, have access to multiple lenders, and can help you get pre-approved for a mortgage so you know exactly what you can afford to spend on a home before you head out house hunting, while it’s our expertise that can match your needs with a house you can afford. Both parties will negotiate on your behalf to ensure you get the best bang for your buck. And, best of all, these services are typically free. We can also refer you to other reputable professionals you may need for your home purchase, including a real estate lawyer and home appraiser.
Budgeting is a core ingredient that helps alleviate the stress associated with money issues that can sometimes arise if you purchase a home without knowing all of the associated costs – including down payment, closing expenses, ongoing maintenance, taxes and utilities.
The key is to create a realistic budget based on your goals. Track your spending and make your dollars go further by sticking to your budget once it’s in place. Budgeting offers a step-by-step formula for figuring out how to best save your hard-earned money to invest in homeownership.
Start by listing your household income, then your household expenses, and review your spending habits. All of this can be done on a pad of paper or on a computer spreadsheet.
Keeping receipts for everything that you purchase will enable you to accurately keep track of where your money is going each month so that you can review and make necessary changes to your plan.
Examine all areas of your life from entertainment to the type of food you buy, where you buy your food and clothes, and how and where you travel. Also look at your spending personality and make necessary adjustments. Are you a saver, a splurger, a spontaneous shopper or a hoarder? Become smarter with your money and avoid impulse buying.
If you find you’re spending a lot of money in one area, such as entertainment for instance, set aside a reasonable amount each month and prepare to stop spending money in this area once your budget has been exhausted.
Budgeting provides you with the opportunity to re-evaluate your needs and wants. If you can set your budget solidly in place before you head out home or mortgage shopping, you will be far more prepared to purchase your first home.
Following are three top tips to help you prepare for the purchase of your first home:
1. Set up a savings account. You can deposit a predetermined amount into this account each pay period that you will not touch unless it’s absolutely necessary. This will enable you to put money aside for a down payment and cover closing costs, as well as address ongoing homeownership expenses such as maintenance, taxes and utilities.
2. Save up for big-ticket items. As you accumulate money in your savings account, you will be able to also save for specific purchases to help furnish your home – avoiding the buy now, pay later mentality, which can have a negative impact on your credit when you’re seeking mortgage financing.
3. Surround yourself with a team of professionals. When you’re getting ready to make your first home purchase, work with your trusted real estate professional and find a licensed mortgage agent/broker. Experts are invaluable to you as you set out on the road to homeownership because we help first-time buyers through the home purchase and financing processes every day. Experts can answer all of your questions and set your mind at ease. Mortgage agents, for instance, have access to multiple lenders, and can help you get pre-approved for a mortgage so you know exactly what you can afford to spend on a home before you head out house hunting, while it’s our expertise that can match your needs with a house you can afford. Both parties will negotiate on your behalf to ensure you get the best bang for your buck. And, best of all, these services are typically free. We can also refer you to other reputable professionals you may need for your home purchase, including a real estate lawyer and home appraiser.
Examining the New Mortgage Rules
On January 17th, Finance Minister Jim Flaherty announced adjustments to the rules for government-backed insured mortgages that will come into force March 18th, 2011.
The new measures will:
• Reduce the maximum amortization period to 30 years from 35 years for new government-backed insured mortgages with loan-to-value (LTV) ratios greater than 80%
• Lower the maximum amount Canadians can borrow in refinancing their mortgages to 85% from 90% of the value of their homes
Additionally, on April 18th, 2011, the government will withdraw its insurance backing on lines of credit secured by homes, such as home equity lines of credit (HELOCs).
By paring back the maximum amortization from 35 years to 30, qualification will become harder for some borrowers – particularly first-time homeowners – as mortgage payments will increase. It’s hard to imagine that, not so long ago, Canadians could amortize their mortgages up to 40 years with zero down payment mortgages.
This is the second time in less than a year that the refinancing maximum was reduced – meaning Canadians can access less of their home equity. The first reduction from 95% of the value of your home to 90% came into force in April 2010. Now, as of March 18th, 2011, the second reduction will bring maximum refinance levels down to 85%.
This change will mean that fewer borrowers can consolidate high-interest debt such as credit cards and other unsecured loans into their mortgage at today’s low rates. This may force homeowners who are experiencing job loss, illness, separation, divorce or urgent unforeseen family crisis into having to sell their homes to gain access to their very own equity.
With these two reductions in the maximum refinance amount (totalling 10%) in less than a year, on a $300,000 home, that’s a difference of $30,000 homeowners can no longer access.
With interest rates sitting at all-time lows – with nowhere to go but up – and looming mortgage rule changes, now is the perfect time to purchase a new home, or refinance your mortgage to pay off bills or free up more cash flow.
Now more than ever it’s important for Canadians to practice financial responsibility, as options for reducing high-interest debt payments are increasingly being limited.
The new measures will:
• Reduce the maximum amortization period to 30 years from 35 years for new government-backed insured mortgages with loan-to-value (LTV) ratios greater than 80%
• Lower the maximum amount Canadians can borrow in refinancing their mortgages to 85% from 90% of the value of their homes
Additionally, on April 18th, 2011, the government will withdraw its insurance backing on lines of credit secured by homes, such as home equity lines of credit (HELOCs).
By paring back the maximum amortization from 35 years to 30, qualification will become harder for some borrowers – particularly first-time homeowners – as mortgage payments will increase. It’s hard to imagine that, not so long ago, Canadians could amortize their mortgages up to 40 years with zero down payment mortgages.
This is the second time in less than a year that the refinancing maximum was reduced – meaning Canadians can access less of their home equity. The first reduction from 95% of the value of your home to 90% came into force in April 2010. Now, as of March 18th, 2011, the second reduction will bring maximum refinance levels down to 85%.
This change will mean that fewer borrowers can consolidate high-interest debt such as credit cards and other unsecured loans into their mortgage at today’s low rates. This may force homeowners who are experiencing job loss, illness, separation, divorce or urgent unforeseen family crisis into having to sell their homes to gain access to their very own equity.
With these two reductions in the maximum refinance amount (totalling 10%) in less than a year, on a $300,000 home, that’s a difference of $30,000 homeowners can no longer access.
With interest rates sitting at all-time lows – with nowhere to go but up – and looming mortgage rule changes, now is the perfect time to purchase a new home, or refinance your mortgage to pay off bills or free up more cash flow.
Now more than ever it’s important for Canadians to practice financial responsibility, as options for reducing high-interest debt payments are increasingly being limited.
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