Re/Max MArket Trends Report

Homebuying activity strong out of the gate, 

as a more competitive market takes shape for spring 2012, says RE/MAX

Major Canadian real estate markets continued to show exceptional resiliency throughout the first quarter of the year, with strong demand and diminished supply setting the stage for a heated spring 2012, according to a report released by RE/MAX.

The RE/MAX Market Trends Report, highlighting sales, price, trends and developments in 15 markets across the country, found that 12 of 15 Canadian centres (80 per cent) were reporting year-to-date (January-February) sales activity ahead of last year's levels, with more than half reporting double-digit increases. Low interest rates, coupled with strong consumer confidence levels and a mild winter, played a significant role in the upswing, ushering in an early start to the spring market.  Average price climbed in 14 of 15 markets (93 per cent) examined, yet appreciation was more tempered, with only three markets posting gains in excess of 10 per cent.  Tighter inventory levels at entry-level price points have sparked bidding wars—particularly in Winnipeg and the Greater Toronto Area—with similar conditions starting to emerge in Saskatoon, Regina, London-St. Thomas, Hamilton-Burlington, Ottawa, St. John's, and Halifax-Dartmouth. 

Given the current economic climate, the strength of the country's housing market clearly reflects the value Canadians place on homeownership.   One driving factor has been the overall performance of the market over the past decade. Existing homeowners have realized substantial equity gains, especially in recent years, and many are taking advantage of the combination of historically low interest rates and equity to upgrade. Perhaps more importantly, housing has outperformed just about every other asset class – and a principle residence is capital gains exempt – a fact that's not gone unnoticed.

In terms of sales appreciation, the best performing markets heading into the traditionally busy spring season were Halifax-Dartmouth (35 per cent), Saskatoon (21 per cent), Saint John (20 per cent), Regina (16 per cent), St. John's (12.5 per cent), Greater Toronto Area (12 per cent), London-St. Thomas (11 per cent), and Edmonton (11 per cent).  Only Vancouver, Kitchener-Waterloo, and Winnipeg have experienced softening in housing activity so far this year.  Sales are down 16 per cent in the Greater Vancouver, 4.5 per cent in Kitchener-Waterloo, and almost on par in Winnipeg.

Housing values are escalating at a steady pace in most major markets.   Yet, gains are, as predicted, much more moderate than in years past.  We expect this will remain the trend moving forward—in line with the Canadian economy, as GDP growth also moves ahead at a more subdued pace.  Conditions will vary locally, with some markets exceeding expectations, largely due to the fact that the significant influx of inventory expected never materialized or, in the case of Saskatchewan and Newfoundland, the local economy has shown extraordinary strength.  On the whole, this is a very stable and healthy housing market in line with traditional norms, with few exceptions.

Year-to-date average price in most major centres is also on the upswing.  Winnipeg, Greater Toronto and St. John's each posted a percentage increase of 10 per cent in the first two months of 2012.  Values in Kitchener-Waterloo followed at nine per cent, while Regina and Saskatoon escalated six per cent. 

Purchasing intentions have largely been driven by confidence in a buyer's own employment and financial picture, followed by major lifecycle events.  While global uncertainties caused some to pause in recent years, purchasers will only sit on the fence so long before the need to make a move becomes a stronger impetus.  That reality is starting to fuel momentum, along with the domino effect of an enthusiastic entry-level segment.  First-time buyers are driving demand in both the smaller and major markets, in turn sparking strong sales activity among move-up purchasers at the higher price points.  As a result, the upper-end of the market has also held up well.  There's no question that the spring 2012 market will see all segments working in tandem.  

Highlights:

• Halifax-Dartmouth's residential real estate market is firing on all cylinders thanks to the $25 billion shipbuilding contract awarded in the last quarter of 2011.  Renewed confidence has bolstered homebuying activity, with sales up 35 per cent over one year ago.  
• Markets in Saskatchewan are also red-hot, with Saskatoon (21 per cent) and Regina (16 per cent) supported by strong economic fundamentals and increasing population levels in the province.
• Tight market conditions have seriously hampered sales activity in Winnipeg, but purchasers remain undaunted.  In February, 44 per cent of single-family homes sales sold above list price, while 31 per cent of condominium sales sold for more than ask.
• In Greater Toronto, multiple offers are commonplace in blue-chip neighbourhoods, with an estimated 50 per cent of detached homes priced in the $600,000 to $900,000 price range selling for more than list price.
• The First-Time Buyer's Tax Credit and remediation of the Harmonized Sales Tax (HST) issue in British Columbia is expected to breathe new life into housing markets this spring.  

Follow me on Facebook & Twitter

Home Sales Rise in Brantford for October 2011

http://www.brantnews.com/index.cfm?page=news&section=read&articleId=11763

Local home sales were up by nine per cent in October compared to the same month last year, according to a media release from the Brantford Regional Real Estate Association.

The association says 157 homes were sold last month. The average price of a home was $246,271, up seven per cent from October 2010.

The total value of homes sold was $38.7 million, up 17 per cent on a year-over-year basis.

"Demand has been running strong since the beginning of the summer and actually strengthened further in October," said Sam Miron, president of the association. "While supply has been keeping up with higher sales for the most part, we are in a borderline sellers' market and that continues to put pressure on prices in the region."

Total real estate sales in Brantford numbered 166 units in October, up 12 per cent from last year. The total value of sales of all property types was $42.5 million, 25 per cent above October 2010 levels.

Stage is set for one of the best recreational property markets in years, says RE/MAX

Stage is set for one of the best recreational property

markets in years, says RE/MAX

Greater affordability, increased selection, and pent-up demand also key factors in 2011 season

Canada's recreational property market is gaining serious traction as savvy purchasers take advantage of ideal conditions, setting the stage for what is expected to be the best market in recent years, according to a report released today by RE/MAX.

The 2011 RE/MAX Recreational Property Report, examining sales and trends in 46 markets across the country, found that substantial equity gains and recovering stock portfolios in major centres have contributed to an upswing in demand from coast to coast.  Demand rose in 78 per cent of markets, while sales were up or on par in 41 per cent of recreational centres.   Inclement weather, including a late thaw and an abundance of precipitation, resulted in a slow start in many areas, but should be offset by stronger peak season activity.  While starting prices have remained relatively stable across the board, there are deals to be had in virtually every region – especially at the top end. Luxury sales, as a result, have climbed in almost half of the markets examined.  Inventory levels are healthy throughout the country,  although there has been some tightening reported at entry-level price points in about one-third of markets.  Some of the best selection of product in recent years is now available.  

Buyers who held off during the recession are back in recreational property markets from coast-to-coast.  Their patience has been rewarded with more affordable recreational values and greater inventory levels.   It's the perfect storm, as ideal market conditions dovetail with wealth recovery.

  

The report also found that Americans are cashing out—especially in Ontario and Atlantic Canada.  For many, the timing has never been better.  The vast majority purchased in Canadian markets when the dollar fell to 65 cents.  These sellers are now taking advantage of price appreciation and the currency exchange.

In British Columbia, the recreational property report identified prices at or near bottom.  Astute purchasers—many of whom were scooping up product south of the border—are starting to cherry pick in markets where oceanfront prices are down from peak, pre-recession levels.  Softer values have driven up sales in Western Canada, with transactions up or on par in 58 per cent of markets, well ahead of the national average.  

Opportunities that haven't been seen in years are now presenting themselves, especially on the West Coast.  Prices are down as much as 20 per cent from peak levels reported in 2006-2007, bringing ownership within reach to many potential purchasers.  The strengthening oil sector has also brought Albertans back into mix, driving demand for both local and coastal B.C. properties.  2011 could be the turning point.

In markets in Ontario, Quebec, and Atlantic Canada, the supply of recreational property has tightened considerably at the lower end, with potential price increases in store by year-end if momentum continues at the current pace. 

At present, 50 per cent of markets offer recreational product at $350,000 or less, including most Ontario markets, Atlantic Canada, the Laurentians and three markets in the West—Lake Winnipeg, Canmore and Harrison Lake.   Yet, even greater value exists for those willing to compromise on lot, location or type of access, such as riverfront, view properties, condominiums, fractional ownership or boat access options.

With overall economic performance improving daily and consumer confidence rising, the resurgence of Canadian recreational property markets is a natural progression.  An upswing in discretionary spending is once again drawing purchasers to what is, without question, an innate Canadian pastime.

The report noted that the composition of the country's recreational destinations continues to evolve.  Fewer traditional cottages are available for sale than in years past.  As the desire for the year-round lifestyle continues to drive renovation and new construction activity, these waterfront properties are disappearing from the landscape.   Meanwhile, today's average recreational getaways are truly earning the distinction as the "home away from home," with many of the bells, whistles and comforts of their residential counterparts.  The movement is challenging local municipalities to manage the delicate balance between regional growth and natural preservation—in some instances, changing recreational migration patterns in the process.

Demand for luxury homes intensifies amid rising Canadian and global wealth

Improved financial standing among high net worth individuals is the major factor driving strong sales activity at the top end of Canadian housing markets, according to a report released by RE/MAX. Record or near-record activity reported in most major centres from coast-to-coast

RE/MAX Ontario-Atlantic Canada and RE/MAX of Western Canada examined 12 major centres from coast-to-coast and found that luxury sales have surged in close to two-thirds of housing markets between January 1 and April 30 of this year, compared to the same period in 2010. Leading in terms of percentage increases over the four-month period were Greater Vancouver (118 per cent)—where foreign investment has also played a major role—Ottawa (59 per cent), Calgary (51 per cent), Halifax-Dartmouth (27 per cent), Winnipeg (24 per cent), Hamilton-Burlington (13 per cent) and Greater Toronto (nine per cent). Six of the seven major cities—with the exception of Calgary—are poised to set new records in top-end activity by year-end. Several are just short of peak levels reported in 2010, such as Victoria, Regina, and London-St. Thomas.

Three key factors—serious equity gains, stock market recovery, and improved economic performance—have been behind the push for luxury housing product across the country. The combination also continues to bolster the bottom line of high net worth individuals both nationally and globally. The impact of that wealth is being seen in the demand for all things luxury—from homes to cars, collectibles and fine wines.

While foreign investment has augmented sales activity in several Canadian markets, its influence was only significant in Greater Vancouver. The vast majority of regions reported that locals were the primary drivers of demand for luxury product. A number of factors position Canada as an attractive option, foremost that its real estate remains a bargain by international standards, given its ranking for quality of life, political and economic stability and the strength of its property laws. To those from abroad, it’s the perfect mix.

The strength of the upper-end segment continues to defy expectations. That demand remains largely domestic speaks to the solid underpinnings of the market, while underscoring the appeal of Canadian real estate on an international stage. Western Canada, in particular, will continue to see the upside benefit of investment from abroad.

The climbing wealth factor has played a role. The financial status and number of millionaires is rising once again—a fact supported by several recent studies released by notable institutions such as CapGemini/Merril Lynch, Citi Private Bank, Deloitte Centre for Financial Services, and Investor Economics—to name a few. While estimates vary, the studies concluded that the high net worth population in Canada and/or abroad—and its corresponding fortunes—is trending upward and will experience considerable expansion moving forward. Despite the impact of the 2008/2009 global financial crisis, most millionaire portfolios/assets have improved or exceed pre-downturn levels. Of particular interest, residential real estate holdings have increased among high net worth individuals, as they express a clear preference for tangible assets. This trend is expected to continue, and serve to boost high-end residential real estate in months ahead, as the move to diversify assets continues in 2011.

As Canada’s millionaire club swells in size, inventory will play an increasing role in future, as the existing upper end housing stock struggles to keep pace with growing demand in central core areas, particularly in Canada’s gateway centres. Infill, renovation and new construction are helping to some extent—while driving up prices in tandem. The building activity is also serving to create new prime areas in areas that were once considered high-end peripherals, as well as in suburban communities.

Limited inventory levels in Canada’s largest markets have hampered sales activity to some extent in 2011, given that demand exceeds available supply. Multiple offers are occurring in both Greater Vancouver and Greater Toronto, as buyers compete for quality product in prime neighbourhoods.

to download the full report - copy and paste this link: http://bit.ly/lswazs

Re/Max First Time Buyer Report

First-time buyers in major Canadian markets move to get in ahead of higher interest rates, says RE/MAX

Driven by the threat of higher interest rates down the road, first-time buyers are contributing to strong upward momentum in residential housing markets across the country, according to a report released by RE/MAX.

The RE/MAX First-Time Buyers Report, highlighting trends and developments in nineteen major Canadian centres, found that low interest rates and balanced market conditions have provided significant impetus in 2011, particularly at lower price points. Just over 30 per cent of markets are reporting sales in excess of 2010 levels as a result, while almost 70 per cent have experienced an upswing in average price. Leading the country in terms of percentage increases in the number of homes sold are Western Canadian markets, including Saskatoon (up close to 15 per cent), Greater Vancouver (up close to 12 per cent), and Winnipeg (up just over 11 per cent). With an average price hike of close to 20 per cent year-to-date (February), Greater Vancouver continues to show unprecedented strength, followed by Hamilton-Burlington (eight per cent), Quebec City (seven per cent), Winnipeg (close to seven per cent), Greater Toronto (five per cent), and Greater Montreal (five per cent).

Despite homeownership rates approaching 70 per cent, there is clearly room for growth as entry-level buyers make their moves from coast-to-coast, undeterred by higher housing values and changes to lending criteria. Many purchasers intent on realizing homeownership are scaling back on expectations or are willing to sacrifice location, quality and/or size to make their dream a reality – not unlike generations before them.

Inventory levels, while tight in several larger centres, are more balanced overall, giving first-time buyers a good selection of housing product from which to choose. Not surprisingly, condominium apartments and town homes have become the first step for many entry-level purchasers, especially in Greater Vancouver, Victoria, Kelowna, Edmonton, Calgary, London-St. Thomas, Hamilton-Burlington, Greater Toronto, the Island of Montreal, and Halifax-Dartmouth where average prices have risen unabated in recent years.

With the Canadian economy on firmer footing overall, residential real estate is well-positioned moving into the traditionally busy spring market. Consumer confidence is climbing in conjunction with economic performance, and concerns over a secondary recession fade with each passing day. The mood is cautiously optimistic, as first-time buyers enter the market.

Changes to recent financing criteria have not created the anticipated run up in activity in most markets. From a financial standpoint, most rookie home buyers remain quite prudent. Those making the leap are not doing it lightly, buying within their means. While this most recent round of policy tightening will likely have a negligible effect on demand, the message is getting across.

Affordability remains a growing concern in most markets, and—aside from first-time purchasers—no one is more in tune with that than housing planners and developers. In fact, the growing demand for reasonably-priced product is creating a shift in the country’s housing mix. That trend is expected to gain traction in coming years, as builders look to create greater options for those seeking to realize homeownership. In recent years, builders have helped ease the move to homeownership by concentrating on intensification—condominium buildings with smaller suites and small-lot subdivisions offering detached, compact homes at a fraction of the cost of a traditional single-family home. On the flip side, the affordability factor is also breathing new life into tired older neighbourhoods, and that, in turn, is contributing to rising values.

As prices escalate, first-time buyers are indeed spending more—some out of necessity, but others are simply in a position to do so. Unlike in years past—a greater percentage of today’s first-time buyer pool is comprised of dual-income, college or university-educated couples with solid earnings. They’re spending close to average price or slightly more to secure—in most cases—a better location or a home that will grow with them. Yet, the fact remains that those on a tighter budget can get in for considerably less, with reasonable choices in every major market across the country. While some may feel discouraged by eroding affordability levels, the underlying confidence in the concept of homeownership is rising.

While market conditions are one thing that influences first-time buyers, few things trump the fundamental belief in homeownership. Today’s entry-level buyers are steadfast in their mindset. They know they have to live somewhere, but they simply don’t want to pay someone else’s mortgage. Savvy or practical, they remain a driving force. The bottom line is that the demand for entry-level product will remain steady. The role of starter homes in the marketplace is becoming ever more vital.

Download the Full Report here: http://bit.ly/hvEAji

10 Common Myths To Choosing A Buyers Agent

Myth #3:

I can find all properties for sale on my own.

As more and more first-time buyers search for and preview properties online, the myth has grown that they can find every property they may be interested in on their own.  But not all available properties are advertised, or have a sign.  Overnight updates to many online listing sites can lag real-time developments, particularly during hot markets.  Buyers don't really understand how the MLS works, nor are they plugged into their local real estate markets to the extent that agents are.

Searching for and hiring a realtor in your area is imperative to understanding the value of properties, keeping yourself safe and finding the perfect piece of real estate for your family. 

 

'Wild card' props up Canadian housing markets

over past decade

 

Inventory remains key to stability in 2011

 

 

Tighter inventory levels helped to make the last decade one of the healthiest periods on record for Canadian real estate, insulating markets in major centres from the peaks and valleys characteristic of past decades, according to a report released by RE/MAX.

 

The RE/MAX Housing Barometer Report measured monthly sales-to-new listings ratios in 18 major centres across the country from January 2000 to December 2010.  The report found strong seller's/balanced conditions prevailed for much of the time frame, prompting significant gains in housing values.   The lone exception was when the market dipped into buyer's territory during the latter half of 2008 and early 2009.  However, fewer listings served to offset diminished demand and provided greater stability.Average price increases from 2000 to 2010 ranged from an annually compounded rate of return of 4.82 per cent in London-St. Thomas to a high of 9.56 per cent in Regina. The national average was 6.82 per cent.  By far the tightest market in the nation was Winnipeg, where seller's ruled the roost for 85 per cent of the decade, followed by Hamilton-Burlington (67 per cent), Regina (63.6 per cent), Kitchener-Waterloo (59.8 per cent) and Edmonton (57.5 per cent).

 

Housing markets have been remarkably hearty over the past decade and the stage is set for a better than expected 2011.  Inventory has proven to be an effective form of market self-regulation, providing both an ideal climate for price escalation and a shelter in periods of softer home-buying activity.  As a number of city centres are already reporting stronger than usual activity out of the gate, it's clear supply will continue to be the wild card in 2011.

 

First-time buyers comprise the vast majority of purchasers, with move-upbuyers in close pursuit.  Demand and supply are on relatively even keel at present in most areas, but the traditionally busy spring season is expected tokeep the market at a perfect equilibrium in the days and months ahead.  However, there may be some exceptions to the rule.  The country's largest markets—Greater Toronto, Greater Montreal, and Greater Vancouver—are expected to head into the second quarter with fewer listings overall.  Two centres—Newfoundland & Labrador and Kelowna—are still firmly entrenched in buyer's markets.

 

An improved global economic picture, lower unemployment rates and rising consumer confidence levels have buoyed home buying activity since November.  While sales figures are expected to be slightly off 2010's heated pace, housing values are forecast to continue to climb in Canadian real estate markets in 2011—with most a direct result of lower listing levels.

 

Western Canada experienced some of the highest rates of return for real estate over the 11-year period.  While values in Regina posted the greatest percentage increase (9.56 per cent), Edmonton, (9.25 per cent), Saskatoon (9.2 per cent), Winnipeg (9.01 per cent), Kelowna (8.42 per cent), Greater Vancouver (7.8 per cent), Calgary (7.7 per cent) and Victoria (7.59 per cent) all outperformed the national average.  

 

Equally strong gains were posted in Quebec.  While solid balanced market conditions prevailed for much of the decade, housing values in Quebec City and Montreal rose 9.2 and 8.48 per cent respectively on an annually compounded basis.

 

Increases were more moderate in Ontario and Atlantic Canada—with the exception of Newfoundland & Labrador, where values escalated 8.14 per cent on average.  Ottawa led in terms of price appreciation in Ontario at 6.78 per cent, followed by Hamilton-Burlington at six per cent, Kitchener-Waterloo at 5.69 per cent, the Greater Toronto Area at 5.35 per cent, and London-St. Thomas at 4.82 per cent.  

 

There's no question that price growth has been solid over the past decade, but history tells us that exceptional growth supported by sound fundamentals is healthy.  Concern is only raised when the underpinnings are insufficient to justify the trajectory.  By all accounts, Canada's real estate market measures up to conventional wisdom and the faith in homeownership has not been misplaced.

 

While the statistics are impressive, they alone cannot tell the tale.  The gains realized over the past decade speak to the tremendous resiliency of the Canadian residential housing market.  Considering catastrophic events, both natural and manmade, that occurred throughout the period—SARS, forest fires, ice storms, 9/11, a recession—the performance of the real estate sectorproved that much more significant.  It remained a consistent bright spot supporting economic growth and ancillary spending, and subsequently helped lead the nation out of the greatest downturn in recent memory—its hardy nature heightening its appeal as a long-term investment.