Housing Market Regains Balance from Spike in Listings
Further Evidence that Housing Market is Achieving Balance.
Edmonton July 5, 2007: Further evidence of the rebalancing of the Edmonton housing market was released by the REALTORS® Association of Edmonton this afternoon. Unlike many sales in the past year and a half, most homes sellers who sold their single family home in June accepted a lower price than they were asking for to complete the transaction.
There were 801 single family homes sold in the City of Edmonton through the Multiple Listing Service® in June 2007.
76.4% or 612 homes were sold for less than their list price
11.2% or 90 homes were sold for the exact price expected by the seller
12.3% or 99 homes were sold for more than the list price
The average sale price for homes sold below list were discounted by about $12,500.
Homes sold above list gained an average of $8,760 for the seller. By comparison, in July 2006, just 66% of homes sold under the list price and 23.6% of homes sold were sold for more than the asking price. In September 2006, 65.8% of single family homes sold below the list price and 19% of homes sold for more than the list price.
Friday, July 13, 2007
Thursday, June 14, 2007
May Market Stats from Edmonton Real Estate Board
Single Month Residential Sales of Over $1 Billion Sets New Benchmark
Edmonton, June 4, 2007: Pessimistic market watchers are peering into the future for any sign of a market slowdown in Edmonton. According to the REALTORS® Association of Edmonton the market remains buoyant with a billion dollars worth of residential sales in May.
The total year-to-date value of property sales through the Edmonton Multiple Listing Service® at the end of May has already surpassed the 2005 year end total.
Year-to-date residential unit sales are up.
Average prices for all types of housing are up.
Average days-on-market is still low.
“Home sellers are upbeat about the steadily increasing prices and short selling cycles,” said Carolyn Pratt, President of the REALTORS® Association. “Homebuyers, on the other hand, are pleased that the inventory has increased and their range of housing choices has improved.” There were 4,485 residential properties available on the MLS® at the end of May as compared to 3,151 last month: a 42% increase.
The average price* of a single family home rose 3% (to $426,028) in May but sales dropped 2.3% from the same month last year as buyers choose condos over single family homes. Condominium prices rose 1.9% to $266,100 on average with 993 sales in May. Duplex and rowhouse sales were 111 units for an average price of $347,257 (up 1.8%).
Single family sales represent 59% of residential sales with condos making up 36%. In 2005 SFDs had 70% of the sales and condos were just 26.8%. Duplex/rowhouse sales are now 4% up from 2.9% in May 2005.
“Rising prices are forcing buyers to explore their housing options. People are being priced into the condo market," said Pratt. "May figures demonstrate that the trend has not yet abated." She urged both buyers and sellers to consult a REALTOR® before venturing into the market. “With the average price of a single family dwelling rising by over $400 a day, you need the latest market figures that only a REALTOR® can provide.”
There were 4,850 residential properties listed on the MLS® in May with 2,839 sales. The sales-to-listing ratio was 59%. Average days on market remained the same as last month at 22 days.
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* Average prices indicate market trends only. They do not reflect actual prices, which vary from house to house and area to area. For information on a specific area, contact your local REALTOR®.
The REALTORS® Association of Edmonton (Edmonton Real Estate Board), founded in 1927, is a professional association of 3,185 Brokers and Associates in the greater Edmonton area. The Board administers the Multiple Listing Service®, provides professional education to its members and enforces a strict Code of Ethics and Standards of Business Practice. The EREB also advertises property listings and publishes consumer information on the Internet at mls.ca and ereb.com, as well as in the Real Estate Weekly and on their web site. The EREB supports charities involving shelter and homeless through the Edmonton Realtors’ Charitable Foundation (ERCF).
Highlights of MLS® activity May 2007 Activity Record for the Month % change from
May 2006
Total MLS® sales this month 3,223 7.36%
Value of total MLS® sales – month $1.169 Billion* 54.2%
Value of total MLS® sales – year $4.29 Billion* 73.4%
Residential¹ sales this month 2,839 10.7%
Residential average price $354,410 45.9%
SFD² average selling price – month $426,028 50.9%
SFD median³ selling price $400,000 48.1%
Condo average selling price $266,100 54.2%
¹. Residential includes SFD, condos and duplex/row houses.
². Single Family Dwelling
³. The middle figure in a list of all sales prices
Edmonton, June 4, 2007: Pessimistic market watchers are peering into the future for any sign of a market slowdown in Edmonton. According to the REALTORS® Association of Edmonton the market remains buoyant with a billion dollars worth of residential sales in May.
The total year-to-date value of property sales through the Edmonton Multiple Listing Service® at the end of May has already surpassed the 2005 year end total.
Year-to-date residential unit sales are up.
Average prices for all types of housing are up.
Average days-on-market is still low.
“Home sellers are upbeat about the steadily increasing prices and short selling cycles,” said Carolyn Pratt, President of the REALTORS® Association. “Homebuyers, on the other hand, are pleased that the inventory has increased and their range of housing choices has improved.” There were 4,485 residential properties available on the MLS® at the end of May as compared to 3,151 last month: a 42% increase.
The average price* of a single family home rose 3% (to $426,028) in May but sales dropped 2.3% from the same month last year as buyers choose condos over single family homes. Condominium prices rose 1.9% to $266,100 on average with 993 sales in May. Duplex and rowhouse sales were 111 units for an average price of $347,257 (up 1.8%).
Single family sales represent 59% of residential sales with condos making up 36%. In 2005 SFDs had 70% of the sales and condos were just 26.8%. Duplex/rowhouse sales are now 4% up from 2.9% in May 2005.
“Rising prices are forcing buyers to explore their housing options. People are being priced into the condo market," said Pratt. "May figures demonstrate that the trend has not yet abated." She urged both buyers and sellers to consult a REALTOR® before venturing into the market. “With the average price of a single family dwelling rising by over $400 a day, you need the latest market figures that only a REALTOR® can provide.”
There were 4,850 residential properties listed on the MLS® in May with 2,839 sales. The sales-to-listing ratio was 59%. Average days on market remained the same as last month at 22 days.
-30-
* Average prices indicate market trends only. They do not reflect actual prices, which vary from house to house and area to area. For information on a specific area, contact your local REALTOR®.
The REALTORS® Association of Edmonton (Edmonton Real Estate Board), founded in 1927, is a professional association of 3,185 Brokers and Associates in the greater Edmonton area. The Board administers the Multiple Listing Service®, provides professional education to its members and enforces a strict Code of Ethics and Standards of Business Practice. The EREB also advertises property listings and publishes consumer information on the Internet at mls.ca and ereb.com, as well as in the Real Estate Weekly and on their web site. The EREB supports charities involving shelter and homeless through the Edmonton Realtors’ Charitable Foundation (ERCF).
Highlights of MLS® activity May 2007 Activity Record for the Month % change from
May 2006
Total MLS® sales this month 3,223 7.36%
Value of total MLS® sales – month $1.169 Billion* 54.2%
Value of total MLS® sales – year $4.29 Billion* 73.4%
Residential¹ sales this month 2,839 10.7%
Residential average price $354,410 45.9%
SFD² average selling price – month $426,028 50.9%
SFD median³ selling price $400,000 48.1%
Condo average selling price $266,100 54.2%
¹. Residential includes SFD, condos and duplex/row houses.
². Single Family Dwelling
³. The middle figure in a list of all sales prices
Thursday, May 17, 2007
CONDOS TO REMAIN AN ATTRACTIVE OPTION FOR MANY HOME BUYERS
May 17, 2007
Canada’s condo markets have delivered a strong performance in recent years, and the economic and financial outlook suggests a continued robust performance in 2007 and 2008. Like all real estate, the sales and price experience for condos will be heavily influenced by location. Since 2004, housing markets in central and eastern Canada have generally experienced a soft-landing, with activity moderating, but remaining at high levels, and with prices continuing to rise at a solid pace. The outlook is for more of the same over the next 24 months. In contrast, new and resale housing in the west has been on fire, but soaring prices have eroded affordability in many markets. In 2007/08, housing conditions are likely to cool in the west, but this need not lead to a boom-bust cycle if price growth slows as new supply comes on the market, demand eases and speculation becomes gradually less intense. So while the risks warrant close monitoring, the TD Economics base case projection is for a moderation in western housing activity, but with the price gains, home construction and resale activity all remaining at well above their historical averages. The regional condo markets are likely to be caught up and parallel these broad regional real estate trends, with the result that condo prices are expected to continue to post double digit gains in the west, but slower than that experienced in 2005/06, while prices in the rest of the country advance at a mid-single digit rate. Looking beyond the near-term outlook, there is fundamental support for condos in the major Canadian markets from structural economic trends, including the aging population and the continued urbanization of the country.
More here:
http://www.td.com/economics/special/ca0507_condo.pdf
Canada’s condo markets have delivered a strong performance in recent years, and the economic and financial outlook suggests a continued robust performance in 2007 and 2008. Like all real estate, the sales and price experience for condos will be heavily influenced by location. Since 2004, housing markets in central and eastern Canada have generally experienced a soft-landing, with activity moderating, but remaining at high levels, and with prices continuing to rise at a solid pace. The outlook is for more of the same over the next 24 months. In contrast, new and resale housing in the west has been on fire, but soaring prices have eroded affordability in many markets. In 2007/08, housing conditions are likely to cool in the west, but this need not lead to a boom-bust cycle if price growth slows as new supply comes on the market, demand eases and speculation becomes gradually less intense. So while the risks warrant close monitoring, the TD Economics base case projection is for a moderation in western housing activity, but with the price gains, home construction and resale activity all remaining at well above their historical averages. The regional condo markets are likely to be caught up and parallel these broad regional real estate trends, with the result that condo prices are expected to continue to post double digit gains in the west, but slower than that experienced in 2005/06, while prices in the rest of the country advance at a mid-single digit rate. Looking beyond the near-term outlook, there is fundamental support for condos in the major Canadian markets from structural economic trends, including the aging population and the continued urbanization of the country.
More here:
http://www.td.com/economics/special/ca0507_condo.pdf
Thursday, April 12, 2007
Prepare for lower real estate prices
Prepare for lower real estate prices
No guarantee that U.S. meltdown won't spread here
David Berman
Financial Post
Wednesday, April 11, 2007
It's hard to find experts in Canada who are concerned that the real estate chaos swirling around next door could hop the border and rattle the housing market here. Well, not yet anyway.
Those who believe the Canadian market is on solid ground will find evidence to support their views when they get a look at housing starts for March (released this morning) and the new housing price index for February (tomorrow). Both are expected to show that Canada's housing market is holding steady amid the downturn to the south.
But if you're the sort of investor who can't help but wonder if Canada must eventually follow the U.S. lead -- a natural instinct given that Canada follows on so many other issues -- you may want to skip the Canadian figures.
Instead, head straight for the words of U.S. central bankers and get their take on housing: The worse it is in the United States, the more reason to worry about the situation here.
This afternoon, the U.S. Federal Reserve releases the minutes from the last Federal Open Markets Committee, on March 21. At that meeting, the committee left short-term interest rates unchanged, but said in its statement that "the adjustment in the housing sector is ongoing."
That is likely code for "quite frankly, the housing sector scares us" -- and the minutes will say more about it.
They have good reason to be scared. In the United States, home prices are tumbling, foreclosures are rising and few are confident the downturn has hit bottom yet. It's a rough time to contemplate buying a home.
Just as worrying, tightening credit conditions and the fact that current homeowners can no longer count on an appreciating market could wreck consumer confidence, which can hit economic growth.
Most Canadians are fully aware of our neighbour's problems. However, the prevailing wisdom is that real estate is a local market and it all boils down to the ''location, location location'' mantra, which should protect us from any sort of copycat debacle.
"Can we say that there are ominous parallels between what is happening in the U.S. and what will happen in Canada? I doubt it," said Bart Melek, senior economist at BMO Capital Markets. "It is a fundamentally different market. The structure is different."
U.S. consumers had to ride an upswing in interest rates from 1% in 2003 to 5.25% today, a much more volatile ride than that experienced by Canadian consumers.
At the same time, U.S. loan requirements -- which included 0% downpayments in some cases -- were far looser. And lastly, the Canadian economy is in better shape.
But there's at least one important factor Canada shares with the United States: overvaluation. House prices here have risen to a point where BCA Research believes they are 28% overvalued, based on comparisons with gross domestic product and competing assets, just as house prices were once widely believed to be overvalued in the United States.
With U.S. prices now coming down, it's not hard to envision a similar price-chop here. Few see it now, but that's the best time to prepare yourself.
dberman@nationalpost.com
No guarantee that U.S. meltdown won't spread here
David Berman
Financial Post
Wednesday, April 11, 2007
It's hard to find experts in Canada who are concerned that the real estate chaos swirling around next door could hop the border and rattle the housing market here. Well, not yet anyway.
Those who believe the Canadian market is on solid ground will find evidence to support their views when they get a look at housing starts for March (released this morning) and the new housing price index for February (tomorrow). Both are expected to show that Canada's housing market is holding steady amid the downturn to the south.
But if you're the sort of investor who can't help but wonder if Canada must eventually follow the U.S. lead -- a natural instinct given that Canada follows on so many other issues -- you may want to skip the Canadian figures.
Instead, head straight for the words of U.S. central bankers and get their take on housing: The worse it is in the United States, the more reason to worry about the situation here.
This afternoon, the U.S. Federal Reserve releases the minutes from the last Federal Open Markets Committee, on March 21. At that meeting, the committee left short-term interest rates unchanged, but said in its statement that "the adjustment in the housing sector is ongoing."
That is likely code for "quite frankly, the housing sector scares us" -- and the minutes will say more about it.
They have good reason to be scared. In the United States, home prices are tumbling, foreclosures are rising and few are confident the downturn has hit bottom yet. It's a rough time to contemplate buying a home.
Just as worrying, tightening credit conditions and the fact that current homeowners can no longer count on an appreciating market could wreck consumer confidence, which can hit economic growth.
Most Canadians are fully aware of our neighbour's problems. However, the prevailing wisdom is that real estate is a local market and it all boils down to the ''location, location location'' mantra, which should protect us from any sort of copycat debacle.
"Can we say that there are ominous parallels between what is happening in the U.S. and what will happen in Canada? I doubt it," said Bart Melek, senior economist at BMO Capital Markets. "It is a fundamentally different market. The structure is different."
U.S. consumers had to ride an upswing in interest rates from 1% in 2003 to 5.25% today, a much more volatile ride than that experienced by Canadian consumers.
At the same time, U.S. loan requirements -- which included 0% downpayments in some cases -- were far looser. And lastly, the Canadian economy is in better shape.
But there's at least one important factor Canada shares with the United States: overvaluation. House prices here have risen to a point where BCA Research believes they are 28% overvalued, based on comparisons with gross domestic product and competing assets, just as house prices were once widely believed to be overvalued in the United States.
With U.S. prices now coming down, it's not hard to envision a similar price-chop here. Few see it now, but that's the best time to prepare yourself.
dberman@nationalpost.com
Thursday, April 5, 2007
Real estate market still on boil
Real estate market still on boil
Southwest-area houses average half a million dollars; solid gains expected until late summer
Ron Chalmers
The Edmonton Journal
Thursday, April 05, 2007
CREDIT: Bruce Edwards, The Journal
HOUSE PRICES HOT: Average home prices in southwest Edmonton topped half a million dollars last month. The house shown above sold recently for $499,900.
EDMONTON - Average house prices now exceed half a million dollars in southwest Edmonton and are almost $400,000 across the area.
"Housing prices have not yet peaked," Carolyn Pratt, president of the Edmonton Real Estate Board, said Wednesday, releasing the March figures for sales through the Multiple Listing Service.
Edmonton-area prices averaged $398,476 for single-family homes and $325,339 for all housing forms.
In only the first three months of this year, average house prices have climbed 16.5 per cent, surpassing Pratt's original forecast of a 15-per-cent rise for the full year.
"We're predicting that prices will continue to rise until August, at four to five per cent per month, then at two per cent per month," she now says, citing Edmonton's continuing in-migration, strong demand, low inventory and prices that still are below Toronto, Vancouver and Calgary.
Averages for single-family homes ranged from $501,838 in southwest Edmonton and $484,168 in St. Albert to $320,600 in Morinville, $312,730 in northeast Edmonton and $281,480 in central Edmonton.
The high-priced southwest has high-quality homes, says Madeline Sarafinchan of Jayman Realty. It also has good access to the University of Alberta, South Edmonton Common and the International Airport -- and its newest neighbourhoods "are well planned with a lot of park space."
Sarafinchan recently sold a 1,689 square-foot house in Rutherford, in the southwest, for $499,900. It has hardwood floors and a gas fireplace on the main floor, three bedrooms, two-and-a-half baths, attached double garage and upgraded insulation -- on an 11-metre by 35-metre lot.
Edmonton-area condominium prices actually fell $547 in March from February, to an average of $246,719.
Condo prices normally are more volatile than house prices, Pratt said.
This March, 1,236 condos were listed -- almost double the 621 listings in March 2006. Pratt thought the spike was caused by investors selling condos that they had been renting out.
Among all housing forms, the EREB reported 3,091 new listings in March, 2,359 sales and a month-end inventory of 2,574 units.
ComFree Edmonton acquired 664 new listings in March, with 513 sales at an average price of $350,300 and a remaining inventory of 893 units.
rchalmers@thejournal.canwest.com
© The Edmonton Journal 2007
Southwest-area houses average half a million dollars; solid gains expected until late summer
Ron Chalmers
The Edmonton Journal
Thursday, April 05, 2007
CREDIT: Bruce Edwards, The Journal
HOUSE PRICES HOT: Average home prices in southwest Edmonton topped half a million dollars last month. The house shown above sold recently for $499,900.
EDMONTON - Average house prices now exceed half a million dollars in southwest Edmonton and are almost $400,000 across the area.
"Housing prices have not yet peaked," Carolyn Pratt, president of the Edmonton Real Estate Board, said Wednesday, releasing the March figures for sales through the Multiple Listing Service.
Edmonton-area prices averaged $398,476 for single-family homes and $325,339 for all housing forms.
In only the first three months of this year, average house prices have climbed 16.5 per cent, surpassing Pratt's original forecast of a 15-per-cent rise for the full year.
"We're predicting that prices will continue to rise until August, at four to five per cent per month, then at two per cent per month," she now says, citing Edmonton's continuing in-migration, strong demand, low inventory and prices that still are below Toronto, Vancouver and Calgary.
Averages for single-family homes ranged from $501,838 in southwest Edmonton and $484,168 in St. Albert to $320,600 in Morinville, $312,730 in northeast Edmonton and $281,480 in central Edmonton.
The high-priced southwest has high-quality homes, says Madeline Sarafinchan of Jayman Realty. It also has good access to the University of Alberta, South Edmonton Common and the International Airport -- and its newest neighbourhoods "are well planned with a lot of park space."
Sarafinchan recently sold a 1,689 square-foot house in Rutherford, in the southwest, for $499,900. It has hardwood floors and a gas fireplace on the main floor, three bedrooms, two-and-a-half baths, attached double garage and upgraded insulation -- on an 11-metre by 35-metre lot.
Edmonton-area condominium prices actually fell $547 in March from February, to an average of $246,719.
Condo prices normally are more volatile than house prices, Pratt said.
This March, 1,236 condos were listed -- almost double the 621 listings in March 2006. Pratt thought the spike was caused by investors selling condos that they had been renting out.
Among all housing forms, the EREB reported 3,091 new listings in March, 2,359 sales and a month-end inventory of 2,574 units.
ComFree Edmonton acquired 664 new listings in March, with 513 sales at an average price of $350,300 and a remaining inventory of 893 units.
rchalmers@thejournal.canwest.com
© The Edmonton Journal 2007
Thursday, March 15, 2007
Wave of bullish articles
More news on how hot the RE market is. We'll track these so that we can see how long before the stories flip-flop...
Canadian homes pricier than ever
Units sold down slightly: report
Carrie Tait
Financial Post
Wednesday, March 14, 2007
CREDIT: (Photo: Reuters)
The average price jumps to a record high of $311,101 in February.
TORONTO -- Housing prices may be at a record high, but it isn’t stopping Canadians from buying new homes.
The average price of a home rang in at $311,101 in February, up 10% from last February's price of $282,744 and topping an all-time housing price high set in January, 2006, according to data released by the Canadian Real Estate Association on Wednesday.
A number of cities experienced new housing price highs including Calgary, Edmonton, Toronto, Hamilton-Burlington, London & St. Thomas, Ottawa, Quebec City and Saint John, according to measurements collected by the Multiple Listing Service and released by CREA.
Seasonally adjusted home sales in Canada’s major markets totaled 29,955 in February, down just 1% or 312 from 30,267 in January, 2007, when unit sales reached the highest level for any month. Toronto dragged down February’s sales results, but slowness in this market was offset by higher activity in Vancouver, Victoria, Calgary and Saskatoon, CREA said.
Seasonally adjusted new residential listing clocked in at 46,323 units last month, down 3.2% from Janurary. Vancouver and Toronto suffered the most. With less listings, the housing market became tighter than any point since September 2005. Edmonton, Regina, Saskatoon, Calgary and Winnipeg have been pinched the most, CREA said.
Gregory Klump, CREA’s chief economist, says the housing market will continue to be strong on the back of recent mortgage interest rate cuts, a healthy job market and rising incomes.
“With momentum for resale housing activity showing few signs of fatigue so far, the spring home buying season this year may be one for the record books,” he said.
ctait@nationalpost.com
Canadian homes pricier than ever
Units sold down slightly: report
Carrie Tait
Financial Post
Wednesday, March 14, 2007
CREDIT: (Photo: Reuters)
The average price jumps to a record high of $311,101 in February.
TORONTO -- Housing prices may be at a record high, but it isn’t stopping Canadians from buying new homes.
The average price of a home rang in at $311,101 in February, up 10% from last February's price of $282,744 and topping an all-time housing price high set in January, 2006, according to data released by the Canadian Real Estate Association on Wednesday.
A number of cities experienced new housing price highs including Calgary, Edmonton, Toronto, Hamilton-Burlington, London & St. Thomas, Ottawa, Quebec City and Saint John, according to measurements collected by the Multiple Listing Service and released by CREA.
Seasonally adjusted home sales in Canada’s major markets totaled 29,955 in February, down just 1% or 312 from 30,267 in January, 2007, when unit sales reached the highest level for any month. Toronto dragged down February’s sales results, but slowness in this market was offset by higher activity in Vancouver, Victoria, Calgary and Saskatoon, CREA said.
Seasonally adjusted new residential listing clocked in at 46,323 units last month, down 3.2% from Janurary. Vancouver and Toronto suffered the most. With less listings, the housing market became tighter than any point since September 2005. Edmonton, Regina, Saskatoon, Calgary and Winnipeg have been pinched the most, CREA said.
Gregory Klump, CREA’s chief economist, says the housing market will continue to be strong on the back of recent mortgage interest rate cuts, a healthy job market and rising incomes.
“With momentum for resale housing activity showing few signs of fatigue so far, the spring home buying season this year may be one for the record books,” he said.
ctait@nationalpost.com
Friday, March 9, 2007
Analysts shrug off housing starts plunge
Analysts shrug off housing starts plunge
Rakshande Italia
CanWest News Service
Friday, March 09, 2007
TORONTO -Canadian housing starts fell by a relatively steep 21 per cent in February, but analysts said the downturn should not be a cause for concern.
Housing starts dropped to 196,200 units last month from 248,500 units in January, the Canada Mortgage and Housing Corp. (CHMC) said Thursday.
The seasonally adjusted annualized rate compiled by CHMC, however, does not surprise housing experts. Analysts said that high employment figures, a booming economy in Western Canada and a lower loonie still show the economy is strong.
Below-seasonal temperatures were a contributing factor to the downturn, they added, noting that a return to more normal weather, coupled with low interest rates and innovative mortgage schemes now in the market, should support housing. Still, all agreed there is a slowdown in the market this year compared with last year.
"Given the fact that much of the adjustment is weather-related and due to a likely slowdown in job creation from extremely high levels, this correction is very much a giving back of borrowed activity," and does not point to a deepening downward trend," Bart Melek, senior economist at BMO Capital Markets, said.
Melek said that the unseasonably warm weather throughout much of January, and a very strong employment environment, boosted starts above sustainable levels that month. He added that areas such as Alberta and B.C. tended to do better then Central Canada, as the boom there obviously boosted jobs and housing.
Housing starts dropped in all regions last month, with double-digit declines in Ontario (32.8 per cent), the Prairies (25.4 per cent), Quebec (15.2 per cent) and B.C. (18.6 per cent).
Multiples also declined in all regions except in the Atlantic. Single starts were down everywhere except in British Columbia.
The numbers in rural and urban areas were down 5.2 per cent in the first two months of 2007 compared with the same period in 2006.
TD Bank Economist Pascal Gauthier said that regional disparities aside, there seems to be a soft landing in most major metro markets, especially in Ontario and Quebec.
"However, the Canadian housing market has been faring better than its U.S. counterpart largely because it has not been driven to the same extent by speculative investment or higher risk sub prime lending," he added.
Gauthier said Canada's hottest market, Alberta, is cooling, and the slowdown is proceeding in an orderly fashion.
Canada's new housing price index, released Thursday by Statistics Canada, shows that the year-over-year increase for Alberta edged down to 40.6 per cent in January, from 42 per cent in Dec. The year-over-year increase for the nation went down to 10.1 per cent in January, from 10.7 per cent in December 2006 .
Gauthier said the resale market continues to hold strong and constitutes the bulk of the market.
Financial Post
irakshande@nationalpost
Rakshande Italia
CanWest News Service
Friday, March 09, 2007
TORONTO -Canadian housing starts fell by a relatively steep 21 per cent in February, but analysts said the downturn should not be a cause for concern.
Housing starts dropped to 196,200 units last month from 248,500 units in January, the Canada Mortgage and Housing Corp. (CHMC) said Thursday.
The seasonally adjusted annualized rate compiled by CHMC, however, does not surprise housing experts. Analysts said that high employment figures, a booming economy in Western Canada and a lower loonie still show the economy is strong.
Below-seasonal temperatures were a contributing factor to the downturn, they added, noting that a return to more normal weather, coupled with low interest rates and innovative mortgage schemes now in the market, should support housing. Still, all agreed there is a slowdown in the market this year compared with last year.
"Given the fact that much of the adjustment is weather-related and due to a likely slowdown in job creation from extremely high levels, this correction is very much a giving back of borrowed activity," and does not point to a deepening downward trend," Bart Melek, senior economist at BMO Capital Markets, said.
Melek said that the unseasonably warm weather throughout much of January, and a very strong employment environment, boosted starts above sustainable levels that month. He added that areas such as Alberta and B.C. tended to do better then Central Canada, as the boom there obviously boosted jobs and housing.
Housing starts dropped in all regions last month, with double-digit declines in Ontario (32.8 per cent), the Prairies (25.4 per cent), Quebec (15.2 per cent) and B.C. (18.6 per cent).
Multiples also declined in all regions except in the Atlantic. Single starts were down everywhere except in British Columbia.
The numbers in rural and urban areas were down 5.2 per cent in the first two months of 2007 compared with the same period in 2006.
TD Bank Economist Pascal Gauthier said that regional disparities aside, there seems to be a soft landing in most major metro markets, especially in Ontario and Quebec.
"However, the Canadian housing market has been faring better than its U.S. counterpart largely because it has not been driven to the same extent by speculative investment or higher risk sub prime lending," he added.
Gauthier said Canada's hottest market, Alberta, is cooling, and the slowdown is proceeding in an orderly fashion.
Canada's new housing price index, released Thursday by Statistics Canada, shows that the year-over-year increase for Alberta edged down to 40.6 per cent in January, from 42 per cent in Dec. The year-over-year increase for the nation went down to 10.1 per cent in January, from 10.7 per cent in December 2006 .
Gauthier said the resale market continues to hold strong and constitutes the bulk of the market.
Financial Post
irakshande@nationalpost
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