Calgary leads country in year-over-year MLS sales growth

By Mario Toneguzzi, Calgary Herald

CALGARY — Calgary led the country in April with the highest year-over-year growth in MLS sales, according to the Canadian Real Estate Association.  In a report released Tuesday of housing market activity in Canada’s major centres, CREA said MLS sales of 2,720 in Calgary were up 30.3 per cent from a year ago.  In Canada, sales of 49,480 for the month increased by 11.5 per cent from April 2011.

The average MLS sale price in Calgary rose by 0.7 per cent to $414,932 while it was up 0.9 per cent in Canada to $375,810.  “Calgary is quietly becoming a market to watch,” said Robert Kavcic, economist with BMO Capital Markets, adding sales are back above the 10-year average for the first time in about three years.

“Prices have yet to gain much momentum but supply conditions are tightening rapidly across Alberta. The months’ supply was down to 4.6 from a post-recession high of more than eight, and sales have far outpaced new listings in recent months. If oil prices remain high enough to continue supporting strong economic growth and migration flows, Calgary could again become Canada’s real estate hot spot in short order.”

Robert Hogue, senior economist with RBC Economics, said April was the third consecutive “outsized” increase in Calgary which is a “clear indication that this market is finally taking flight.”  New listings in Calgary of 4,370 increased by 4.4 per cent from last year. Throughout Canada, new listings rose by 4.9 per cent to 89,739.  In Alberta, sales rose by 23.5 per cent to 6,191, new listings increased by 2.4 per cent to 10,718 units and the average sale price was up 1.9 per cent to $365,830.

“A number of Canadian housing market trends in April remained intact from the previous month,” said Wayne Moen, president of CREA. “Trends in Vancouver and Toronto continue to diverge. These two housing markets have an obvious influence on national statistics . . .”  In Toronto, sales of 10,350 in April were up 14.5 per cent from last year and the average sale price rose by 8.4 per cent to $517,556. But in Vancouver sales fell by 13.2 per cent to 2,837 and the average price dropped by 9.8 per cent to $735,315.

“It bears repeating that the national average price was skewed higher last spring by record level high-end home sales in Vancouver’s priciest neighbourhoods, and that a replay of this phenomenon was not expected this year,” said Gregory Klump, chief economist of CREA. “Sales data confirm that high-end activity in Vancouver is well off the peak levels reached at this time last year, which is exerting a gravitational pull on the national average price.

“By contrast, activity in Toronto is stronger this spring than it was last spring. Higher-priced sales activity there is on the rise and buoying average prices. As the most active housing market in Canada, Toronto is the biggest factor supporting national average price.  “Netting Vancouver out of the national average price calculation yields a 4.9 per cent year-on-year gain. Netting Toronto out of the national average price calculation, while leaving Vancouver in, produces a 2.2 per cent year-on-year decline. Netting out both Vancouver and Toronto results in a 3.1 per cent increase in average price. On balance, this points to modest price growth amid balanced market conditions in much of the rest of Canada.”

Diana Petramala, economist with TD Economics, said absent of an external negative economic shock, Canadian housing demand should remain supported by a continued low interest rate environment through 2012.  “Still, growth in home prices and sales will likely be limited as the overvaluation has led to a deterioration in affordability,” said Petramala. “Overall, we anticipate the Canadian housing market to remain relatively flat in the coming year with home prices to rise just another two per cent this year, following gains of seven per cent in each of the last two years.”


Housing starts up more than expected in March

Postmedia News

OTTAWA — Housing starts were up more than expected in March, Canada Mortgage and Housing Corp. said Wednesday.  The federal agency said the annual rate of new construction on housing units was 215,600 last month, up 10,300, or five per cent, from the month before.  That beat the median estimate of 200,000 from economists polled by Bloomberg.

“The upward movement in March was largely due to an increase in multiple starts, particularly in Ontario and the Prairies,” CMHC deputy chief economist Mathieu Laberge said in a statement. “This was partly offset by a decrease in multiple starts in British Columbia and Quebec, while single-detached starts decreased marginally countrywide.”

In urban areas, housing starts were up 4.2 per cent to a rate of 192,100. That included a decline of 2.4 per cent in the category of single-family homes, but a gain of 8.3 per cent for multiple-housing units.  In rural areas, housing starts were estimated at an annual rate of 23,500, up 11.9 per cent from February.  “Although we expect starts to soften in due course, the latest figures suggests that, for time being, the housing sector still has a considerable amount of energy, aided by low financing costs,” said Peter Buchanan, economist with CIBC World Markets.

First-time homebuyers to drive housing market

Mario Toneguzzi, Calgary Herald

First-time homebuyers are being described as the “engine” that is driving  the housing market in Canada.

A national survey conducted by Genworth Financial Mortgage Insurance Company Canada  in conjunction with the Canadian Association of Credit Counselling Services shows that 43 per cent of first-time homebuyers believe they are in good or great financial shape.  The annual poll asked 1,533 Canadians questions about their financial well-being and revealed that almost one-third of first-time buyers who purchased a home in the past two years, or future intenders, believe now is a good time to buy, up 25 per cent from last year. Also, 64 per cent say they enjoy planning their financial future and 59 per cent say they managed to save for their down payment within two years or less.  “First-time homebuyers are the engine that will drive the housing market in the next few years,” says Brian Hurley, chairman and chief executive of Genworth Canada.

Other survey results for first-time buyers are: 94 per cent say even though it means more work and effort, they’d rather own a home than rent; 94 per cent say owning their own home provides a greater sense of emotional well-being and security; 60 per cent say they have a long-term financial plan for retirement they are working towards; 58 per cent say their goal is to pay off their mortgage as fast as possible, even if it means scrimping and saving and foregoing a lifestyle and activities that their peers enjoy; 36 per cent say they were able to pay off all their bills and save money in the past year; 72 per cent say they expect their financial situation to improve in the next year, whereas only 54 per cent of Canadians who do not own a home say they are expecting any improvement in their financial fitness in the next 12 months.

Buyer’s heart will lead to home: survey

Canadian homebuyers make decisions based on feeling

By Mario Toneguzzi, Calgary Herald

CALGARY — A potential homebuyer’s feelings about a home are playing a more important role in deciding whether to purchase real estate property.  A survey by Coldwell Banker Real Estate, released Tuesday, reveals that 28 per cent of women and 25 per cent of men put more emphasis on their feelings about a home than they do on the layout, square footage or price.  “A home is much more than just bricks and mortar. It truly is where the heart is and this survey shows just what an important role emotions can play when buying a home,” said Susanita de Diego, Coldwell Banker Canadian consumer specialist based in Calgary.  “Whether a buyer is located in the U.S. or Canada, the emotional considerations of buying a home are borderless. The feel of a home is a critical part of the process, no matter where you’re buying, or whether you’re a man or a woman. I’ve experienced similar responses from my own buying customers here in Canada.”  The survey also said the majority of women (62 per cent) and men (61 per cent) know within the first visit if the home is right for them.

Calgary MLS growth better than average

By Mario Toneguzzi, Calgary Herald

CALGARY — Year-over-year MLS sales growth in Calgary exceeded the Canadian average last month, the Canadian Real Estate Association said Thursday.  The organization said MLS sales of 2,113 units in Calgary was up 10 per cent from a year earlier, while Alberta sales of 4,476 units grew 13.5 per cent from 2011. Sales nationally rose by 8.6 per cent, compared with February 2011, and by 1.4 per cent over January.

“The resale market in Calgary continues to gain some momentum as we approach the spring and summer seasons,” said Richard Cho, of Calgary for Canada Mortgage and Housing Corp.  “With economic conditions improving and mortgage rates at favourable levels, prospective buyers have been active in the market.”

The average MLS sale price last month rose by 1.2 per cent, to $405,687, in Calgary and by 2.2 per cent, to $359,721, across Alberta.  Douglas Porter, deputy chief economist with BMO Capital Markets, said the Canadian housing market remains buoyant, “with an unseasonably mild winter likely adding some further juice to the mix.”

According to the Calgary Real Estate Board, MLS sales in Calgary so far this month are up 1.6 per cent compared with the same time period a year ago to 887 transactions and the average sale price has risen by 2.14 per cent to $415,093.  Ottawa-based CREA said about half of local markets recorded an increase in activity led by Calgary, Toronto and Montreal.

Growing family No. 1 lifestyle motivator for homebuyers

Mario Toneguzzi, Calgary Hearld

A recent survey of 700 Coldwell Banker Real Estate professionals across North America reveals homebuyers are motivated by lifestyle needs, with growing families ranking as a top motivator on both sides of the Canadian/U.S. border.

Sellers are also becoming increasingly aware of the value of presenting a home with buyers’ appeal, and are becoming more willing to go the extra mile as they compete for buyers’ attention.

Of those Coldwell Banker professionals surveyed: 94 per cent say their sellers are getting rid of clutter and making cosmetic updates, such as fresh paint and minor repairs – this percentage was the same for both Canadian and U.S. respondents; 60 per cent of Canadian respondents agree that clients are willing to “de-personalize” the home – this percentage was much higher in the challenging U.S. market, where 76 percent agree; 59 per cent of North American respondents say sellers are even bringing in new home decorations or furniture to help make the home more appealing.

“When marketing your home, it’s important to help buyers imagine themselves living in the property. De-cluttering and de-personalizing is crucial to this process,” says Susanita de Diego, Coldwell Banker Canadian Consumer Specialist, based out of Calgary. “Sellers need to recognize that while demand for Canadian homes remains strong, their home is competing with other listings to get results.  I always advise sellers that if their home is presented with a minimum of clutter and distracting personal items, it will appeal to buyers and improve their chances of a successful sale.”

According to the Coldwell Banker Real Estate professionals surveyed, growing families is currently the biggest lifestyle driver for homebuyers in both Canada and the United States.  Seventy per cent of real estate professionals surveyed say a new baby or growing family is the “most common”, or a “very common” lifestyle reason that North American buyers search for a new home.  Other key motivators include: marriage – 59 per cent; divorce – 48 per cent; and retirement – 37 per cent.

While the majority of survey responses regarding buyer motivators were similar between Canada and United States, and although employment was the number two reason overall across North America, there was one marked difference.  Fifty-five per cent of Canadian respondents cited job reasons versus 69 per cent of respondents in the United States, where the economy and job market have endured recent downturns

Alberta expected to lead Canadian growth in home sales

By Mario Toneguzzi, Calgary Herald

CALGARY – Alberta home sales are poised to show the biggest year-over-year gains in Canada over the next two years, according to the Canadian Real Estate Association.  In a report Monday, CREA said MLS sales in the province would grow by 6.8 per cent this year to 57,400 and by another 1.7 per cent in 2013 to 58,400.  Across the country, CREA forecasts 0.3 per cent growth this year followed by a decline of 0.3 per cent in 2013.  Gregory Klump, CREA’s chief economist, said risks to the Canadian economic outlook remain elevated because of the European debt troubles although continued low interest rates provide a “silver lining.”  “So long as the European debt crisis is contained and a global economic recession avoided, low interest rates will support Canadian home sales and prices,” he said.  “Recent trends are reassuring, but interest rates remaining low for longer will doubtless keep the Canadian housing market under scrutiny for signs of overheating.”

The average sale price in Alberta is forecast to grow by 1.4 per cent in each of the next two years to $358,300 in 2012 and to $363,200 in 2013.  Nationally, the average sale price is forecast to decline by 1.1 per cent this year to $359,100 but increase by 0.9 per cent in 2013 to $362,300.  Lai Sing Louie, regional economist for the Prairies and Territories for Canada Mortgage and Housing Corp., said residential MLS sales in Alberta rose seven per cent in 2011, while new listings decreased by four per cent.

According to the CMHC, MLS sales in Alberta are expected to grow by 2.8 per cent in 2012 followed by 3.5 per cent growth in 2013. Average sale prices are expected to rise by 2.2 per cent in 2012 with more growth of 2.4 per cent in 2013.  “Alberta’s bright economic and demographic outlook will result in growing demand for resale homes,” Louie said.  The possibility of a housing correction and the dangers of record consumer debt came up at a meeting Monday between Finance Minister Jim Flaherty and 13 private-sector economists for his traditional pre-budget consultation. Flaherty and a handful of the economists said they continue to be concerned about household debt in Canada and a somewhat overheated housing market – especially condominiums.

Some of the big banks are suggesting Ottawa also consider implementing “measured actions” for the housing market, such as reducing the maximum amortization period for mortgages back to 25 years, and consider increasing the minimum down payment, possibly to 10 per cent.  “There has been some moderation in the housing market. I remain concerned about the condo market, quite frankly,” Flaherty told reporters after his one-hour meeting in Ottawa.

“I again encourage Canadians to be careful in the amount of debt they take on in terms of residential mortgages because (interest) rates will go up some day.”  On the housing market, Flaherty noted there’s “a divergence of views” among the economists, as some expressed more concern than others.

Avery Shenfeld, chief economist with CIBC World Markets, echoed some of Flaherty’s worries and said that while there are signs the housing market is cooling, there’s still some cause for concern.  “There’s a general feeling that more than just the condo market, the Canadian housing market, is starting to get a little bit overdone in terms of price momentum,” Shenfeld said.