As many of you have probably heard by now, this June was the best on record in terms of house sales as reported by The Toronto Real Estate Board.
The total number of houses sold rose by an amazing 27% in June while the average sale price rose 2%. Keep in mind that these statistics include all of the GTA from the Hamilton/Wentworth townline in the west to the Durham/Northumberland townline in the east and from Lake Ontario north into Lake Simcoe. Of course not all areas experienced the same amount of growth, however, Durham Region (on the most part) is in line with these increases. To see a 3 year comparable market evaluation for South Pickering, North Pickering, Ajax, Whitby, Oshawa and Courtice/Bowmanville click on Durham Region.
The other statistic to take notice of is the number of homes for sale this year as compared with last year. While sales have increased 27% this June, the number of new listings has decreased by 17% and the number of active listings has decreased by 30%. What does this mean for sellers and buyers? There is a lot less inventory to choose from and a lot more people who are looking to buy. This would explain the rise in the number of multiple offers we have been seeing over the past several weeks as well as the increase in prices.
Who knows where all of this will end up in the next several months. There is still some speculation in the economic circles that the “worst is yet to come” and yet others have changed their predictions to an earlier anticipated recovery.
Housing construction makes gains in May after hitting 13-year low
When Toronto-based developer Murray Koebel put his housing project on the market last summer, he didn’t expect it would coincide with the stock market crash.
There was barely a nibble for seven months at his Vista Homes project in Pickering. So the Vista Homes president responded, like many other developers, by slashing prices by up to $30,000 on some of the units in his development, comprised of 45 single, detached homes and townhouses.
“Those were difficult times,” Koebel said.
But since February, he has sold 18 homes, or about 40 per cent of the development. That compares with the one or two he had sold in the six months prior. “Things really started to pick up in the spring, when people saw that it wasn’t as bad as they thought,” he said.
As a result, Koebel expects to break ground this summer and is cautiously looking around at future projects, a decided turnaround from a few months earlier.
The figures seem to bear him out: The market, while still slow with a recovery not yet on the horizon, shows signs of improvement. Canadian housing construction bounced back in May after dropping to a 13-year low in April, according to figures released by the Canada Mortgage and Housing Corp. yesterday, with seasonally adjusted housing starts hitting 128,400 in May, up from 117,600 in the month prior.
“With the Canadian economy poised to begin the recovery process by this fall, the worst of the residential construction recession might be behind us,” said BMO Capital Markets economist Robert Kavcic.
Starts also rebounded strongly in the Toronto-area market, up by 35 per cent in May to 22,000 units. Most of that was due to the volatile multiple family segment, which includes condominiums and apartment buildings. “After plunging precipitously since late 2007, and appearing to be in free fall in recent months, this rebound may be an indication the sector is perhaps stabilizing,” TD Securities analyst Millan Mulraine said.
The Ontario Home Builders’ Association said yesterday that builders, including Koebel, were seeing “signs of hope” and reporting increased traffic in their sales offices and model homes.
Activity is expected to pick up slightly in the second half of the year.
“Tighter resale markets in recent months, improving credit conditions and a backlog of sales awaiting construction are all factors that will boost activity,” said Ted Tsiakopoulos, regional economist for the CMHC.
Despite the positive figures, starts are still down 42 per cent in year-to-date figures compared with last year, at both the national and Toronto-area levels.
Analysts say the overall drop in starts to date is not necessarily a bad thing, since there has been massive overbuilding in some Canadian cities, particularly in the condominium sector, where more than 35,000 units in the Toronto area alone are already under construction and expected to be largely completed this year and next.
BMO expects the rate of starts to remain below long-term trends because there is too much supply already on the market.
“A sharp rebound is unlikely in this sector thanks to about six years of overbuilding – housing starts will likely remain below the rate of household formation through 2010,” Kavcic said.
One thing that should keep construction workers busy is the renovation industry, which reported $21.3 billion spent by consumers last year, up by $1.6 billion from 2007, according to a separate report by the CMHC.
This is the latest article regarding the health of the Canadian real estate industry for the month of May. Published today on the msn finance page. Certainly worth a read as it shows the Real Estate market in a very positive light. As I noted in my post yesterday Canmore real estate is starting to move again with increased activity driving the sales.
REUTERS
June 15, 2009
TORONTO (Reuters) – Resale prices for Canadian homes rose to their highest average on record in May, while sales activity climbed for a fourth straight month as consumer confidence strengthened, according to an industry report released on Monday.
But rebounding sales in some of the most expensive markets skewed the national average, the Canadian Real Estate Association said in the report.
The average home price last month rose 0.4 percent to C$319,757 ($282,971), topping the previous record set a year ago. It was the first year-over-year increase since May last year.
The average price has recovered 16.4 percent from the low reached in January, CREA said.
Home sales rose 8 percent to 37,649 units in May from April, the fourth consecutive monthly increase on a seasonally adjusted basis. Nationally, 49,521 units changed hands in May, down 0.8 percent from a year ago.
“New records were posted in only 15 percent of local markets in May, none of which are among the most active or expensive,” CREA said.
“The strong rebound in sales activity, not price, in Canada’s most expensive markets is driving up average prices nationally and in some provinces, just as a sharp decline in activity in these markets pushed average prices lower in late 2008.”
Of the 25 major markets that CREA tracks, 14 reported rises in unit sales year-over-year, with five markets, mostly in the western provinces of Alberta and British Columbia, posting double-digit increases.
Prices rose in 14 markets, led by a 17.3 percent increase in Newfoundland and Labrador and a 12.1 percent climb in Saint John, New Brunswick.