May 2010

[Ally]

House prices to rise `modestly`

House prices will increase this year and next despite the challenges posed by higher mortgage rates , Canada Mortgage and Housing Corp. said Wednesday.

An "improved balance between demand and supply" will stabilize prices through the rest of this year, it said in its second-quarter Housing Market Outlook. Prices will "rise modestly" in 2011, it said.

The agency, which insures almost $500-million of Canadian mortgages, said the average cost of a home by the end of 2011 should be $350,000. That would be a gain of 1.4 per cent over April`s record high of $344,968.

Forecasting higher prices next year puts the agency at odds with the Canadian Real Estate Association and Toronto-Dominion Bank, both of which are calling for prices to drop by 1.5 per cent and 2.7 per cent respectively in 2011.

"It all comes down to the economy, and what we`ve seen so far this year is a strong end to 2009 and through 2010 we`ve seen some effects from various fiscal measures," said CMHC senior economist Bill Clark. "There was a big April gain in employment, and as the economy gets moving again people become more interested in housing."

While prices have rebounded strongly from the recession, economists have warned that higher mortgage rates and tougher qualification guidelines could price would-be homeowners out of the market in the second half of this year.

Read the full article here.

 

[Ally]

Number of EI recipients down in March

Statistics Canada reports 668,100 people received regular Employment Insurance benefits in March, down 24,200 from February.

It was their sixth straight monthly decline.

The number of beneficiaries fell in most provinces, with the largest declines in Ontario, Quebec and Alberta.

Read the full article here.

 

[Ally]

U.S. jobless claims surge

The number of Americans filing new claims for unemployment benefits unexpectedly rose last week by the largest amount in three months. The big surge was a setback to hopes that layoffs were declining.

Applications for unemployment benefits rose to 471,000 last week, up by 25,000 from the previous week, the U.S. Labour Department said Thursday. It was the first increase in five weeks and the biggest jump since a gain of 40,000 in February.

The forecast had been for claims to fall by around 4,000 from the previous week. The large rise in new claims is evidence of how volatile the job market remains, even as the economy grows.

The total for new claims was the highest since claims stood at 480,000 on April 10. It also pushed the average for the last four weeks to 453,500.

Employers are hiring again, but not at levels needed to make a dent in the unemployment rate . The jobless rate actually increased in April to 9.9 per cent. An improving economy has lured those who had given up looking for work back into the labour market. The jump in the unemployment rate came even though payrolls rose last month by 290,000 jobs, the biggest gain in four years.

Read the full article here.

 

[Ally]

Interest in multi-generational homes on the rise: Coldwell Banker

CALGARY - Family reunions are taking on new meaning in the real estate market, according to recent surveys by Coldwell Banker Real Estate LLC.

A survey of its real estate professionals in both Canada and the United States found that a large percentage have noticed in the past year an increase in homebuyers looking for a property to accommodate more than one generation of their family.

Overall, 37 per cent of respondents said they have seen an increased demand for multi-generational homes, but in Canada the number was 45 per cent.

And in Canada, the real estate professionals cited health-care issues (52 per cent) as the top reason why people would move into a house with other generations of their family.

Financial drivers was second at 45 per cent while less than one per cent cited a strong family bond as the main factor.

John Geha, president of Coldwell Banker Canada, said one of the main reasons in the trend is the aging population fuelled by the Baby Boomer generation.

Read the full article here.

 

[Ally]

Recreational property sales jump this year versu last: Re/Max

CALGARY - Recreational property sales in most major Canadian markets have soared this year compared with a year ago, according to a report released today by Re/Max.

The 2010 Re/Max Recreational Property Report found that 79 per cent of recreational areas reported an upswing in the number of properties sold during the first three months of the year. Starting prices for recreational product were also on the move with 43 per cent posting a nominal increase.

The report said the number of units in Canmore was up a substantial 130 per cent over a year ago with 90 properties sold between January and March as opposed to 39 sales for the same period in 2009.

But the average price dipped by 17 per cent to $583,000 from $684,000, "bringing values more in line with markets further afield like Fernie and Invermere."

"Lower values — combined with rock-bottom interest rates — have finally kick-started Canmore`s recreational property market," said the Re/Max report. "The popular resort area lagged behind Calgary and Edmonton in terms of housing recovery, but with prices now at or near bottom, cautious purchasers are coming out of the woodwork."

Read the full article here.

 

[Ally]

Major Canadian banks reduce five-year mortgage rate by 11 basis points

TORONTO - Several of Canada`s biggest banks are lowering the rates for their five-year mortgages, the second reduction this month.

Royal Bank (TSX:RY), TD Canada Trust (TSX:TD), Bank of Montreal (TSX:BMO) and National Bank Financial (TSX:NA) said Thursday their posted rate for five-year mortgages will be reduced by 11 basis points to 5.99 per cent, effective Friday.

The other Canadian banks will likely make similar announcements.

Read the full article here.

 

[Ally]

Setting the stage for a successful sale

Want to sell your home? Get out the bucket, mop and Mr. Clean.

The key to making a positive first impression is simple, said Sandra Rinomato, host of HGTV`s popular Property Virgins show.

"Get it clean, clean, clean," said Rinomato.

"If your house isn`t clean, it instantly sends up negative thoughts that the home is not well maintained. If your house is spotless, you`re ahead of the game," she said.

But don`t stop there, advised Rinomato in a phone interview from her home in San Diego. To increase your chances of making a sale, "stage" the house to make it as attractive as possible.

Until recently, "staging meant pulling out all the stops -- setting the dining table with your best china and crystal, arranging flowers, lighting candles," she said. "Now we take the minimalist approach. Basically, you want to strip the house to its bare essentials, depersonalize it, so potential buyers can superimpose themselves and their lifestyle on the house."

Read the full article here.

 

[Ally]

Clean up, cash in

Long before a buyer signs on the line to purchase your home, you need to get them to come in the front door. The last thing you want is for them to take one look at the front of your home and drive straight on by.

"When they pull up in front of it, you want them to go `Hey, wow, this looks good,` and want to go inside," says Laurin Jeffrey, an agent with Century 21 Regal Realty. "I`ve pulled up in front of houses and the outside looks beat up and rundown and have said, `You know what, never mind,` and don`t even go in."

It need not take much to turn a tired garden or front yard into a welcoming space that makes your home stand out from the listings crowd.

"Things like changing the house numbers, the external lighting, the mailbox -- those types of things can really make a significant impact," says Frank Turco, senior manager of trend and design at Home Depot.

Then there`s the garden itself.

Read the full article here.

 

[Ally]

Teranet-National Bank index shows slowing rise of home prices

OTTAWA - The latest home-price index from National Bank of Canada, done in partnership with real-estate technical-services provider Teranet, shows prices far ahead of where they were a year earlier though monthly gains are slowing down.

The Teranet-National Bank home-price index showed home prices among six major markets up 11.6 per cent overall in March from where they were a year before, up from annual gains of 9.9 per cent in February and 7.5 per cent in January.

Authors of the report said the widening year-to-year gap was largely due to the decline in home prices that was taking place in the early part of 2009, an effect that will prove to have carried through to April.

On a monthly basis, prices were up 0.3 per cent in March, the index showed. In February, they were up 0.2 per cent, and gains for these last two months for which data is available mark the slowest pace of price gains in almost a year.

"The broad slowing of monthly gains is consistent with a general loosening of resale-market conditions across the country," said the report accompanying the index. "For some months now, homes have been coming on the market faster than they have been selling."

Read the full article here.

 

[Ally]

Cottage sales soar across the country

OTTAWA - Although the first three months of 2010 saw an upswing in sales of recreational properties in Canada, several factors have kept sales of cottages and back lot properties at pre-recession levels.

Canadian recreational property sales jumped 79% in the first quarter of this year from the same period a year earlier, according to Re/Max`s Recreational Property Report released Thursday. However, the report also said U.S. buyers have "virtually fallen off the map" for Canadian recreational property sales, and bargain-priced properties in Southern U.S. states such as California, Arizona, Nevada and Florida are luring buyers away from Canadian recreational property markets.

"While sales have been strong out of the gate, the number of waterfront cottages, condominiums and back lot properties sold in the first quarter still fall short of pre-recession levels," Michael Polzler, executive vice-president, Re/Max Ontario-Atlantic Canada, said in the release.

The report, which highlights sales, prices, trends and developments in almost 50 markets coast-to-coast, found 43% of recreational properties posted a "nominal increase."

Read the full article here.

 

[Ally]

Realtors rush to ease correction fears

The Canadian Real Estate Association has a new study out that says Canadian homeowners don`t have to fear a U.S.-style correction.

"The relationship between average price and income has recently been cited as portending a U.S.-style correction in home prices," said Gregory Klump, chief economist with CREA. "However, such warnings ignore the longer-term relationship between prices and income and disregard typical Canadian housing market cycle dynamics."

Read the full article here.

 

[Ally]

OECD paints glowing picture of Canada economy

PARIS - The North American economy is leading a stronger-than-expected rebound in growth among western countries, though serious risks remain in the global economy due to the Europe-centred debt crisis and overheating in emerging market economies, a Paris-based think-tank warned here Wednesday.

The Canadian economy is particularly strong this year, aided by a healthy banking sector and low government deficits relative to its competitors, according to the Organization for Economic Co-operation and Development.

"I think Canada looks good - it shines, actually," said Alexandra Bibbee, who heads the group that analyses the Canadian economy for the OECD, a research body funded by 31 member countries in Europe, North America and Asia.

"Canada could even be considered a safe haven."

Canada`s growth, which fell 2.7 per cent in 2009, is projected to grow by 3.6 per cent this year and ease to 3.2 per cent in 2011.

Read the full article here.

 

[Ally]

Homes overpriced, bank reports say

A new report from one of the country`s major banks says house prices in Canada are sitting 14% over their "fair" value.

The report from Canadian Imperial Bank of Commerce says the average price of a home has risen 23% since reaching its cyclical low in January 2009.

British Columbia and Alberta homes are the most overpriced, with about one in four above their fair value. CIBC establishes what it calls fair value from market fundamentals that include income, rent and demographic changes.

"This doesn`t mean that house prices are going to crash tomorrow," said Benjamin Tal, senior economist with the bank. "I`m saying they probably will go down by 5% or 10%."

The CIBC survey came out the same day as a new report from Royal Bank of Canada that shows affordability eroded in the first quarter.

"Looking ahead, further erosion in affordability is likely to take place in Canada in the coming 12 to 18 months," said the report, written by Robert Hogue, senior economist with the bank.

Read the full article here.

 

[Ally]

New housing listings soar as experts expect slowdown

Canadians listed their homes for sale in record numbers in April as countrywide housing inventory hit levels not seen in almost a year, says the Canadian Real Estate Association.

While the market has not slumped, just about everybody tracking the sector -- from economists and builders to real estate executives -- say there is nowhere else to go but down in prices and sales.

"We are still a far cry from where we were," said Gregory Klump, chief economist with CREA, referring to the bottom of the market in January 2009 when there was 12.8 months of unsold inventory on a seasonally adjusted basis. The inventory represents the number of months it would take to sell current homes at the current rate of sales activity.

Inventory rose to 5.3 months in April on a seasonally adjusted basis, the highest since May 2009, in part because new listings show no sign of slowing: 99,901 homes went to market last month, the best April on record.

At the same time that supply is increasing, demand appears to be slowing. Seasonally adjusted homes sales were down 2.6% in April from a month earlier. Sales are off 6.8% from the peak reached in December 2009.

Read the full article here.

 

[Ally]

Canada`s hot resale housing market starting to cool

(OTTAWA – May 17, 2010) Home sales activity in Canada came up short of the record for the month of April and new listings continued to climb, according to statistics released by The Canadian Real Estate Association (CREA).

Residential sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards numbered 52,042 units in April 2010. This is less than one per cent short of the record for national sales activity during the month of April, which was set in 2007. Compared to April 2009, national activity was up 20 per cent.

Seasonally adjusted national home sales activity slipped 2.6 per cent from the previous month, and now stands 6.8 per cent below the peak reached in December 2009. More than half of the decline in activity over the first four months of 2010 resulted from fewer sales in British Columbia, while activity in Ontario and Quebec remains at or near record levels.

"The easing trend in national sales activity masks a rising trend in a number of major markets," said CREA President Georges Pahud. "Real estate is local, so buyers and sellers should engage the services of a REALTOR® for knowledge about housing market trends in their market."

Some 99,901 homes were newly listed for sale on Canadian MLS® Systems in April 2010, surpassing the previous record for the month of April set in 2008 by six-tenths of one per cent. A total of 236,397 residential properties were listed for sale on Boards` MLS® Systems at the end of April 2010, down 1.9 per cent from levels one year earlier.

Read the full article here.

 

[Ally]

U.S.-style home correction unlikely in Canada

The Canadian Real Estate Association (CREA) released a new report today indicating that home prices will stabilize, and will remain stable for some time. This means that Canadian homeowners are unlikely to experience a U.S.-style decline in the value of their homes.

"The relationship between average price and income has recently been cited as portending a U.S.-style correction in Canadian home prices," said Gregory Klump, Chief Economist, CREA. "However, such warnings ignore the longer-term relationship between prices and income, and disregard typical Canadian housing market cycle dynamics."

Home prices tend to rise in cycles, characterized by periods of sharp growth and periods of stability. By contrast, income generally follows an orderly upward trend over time. For home prices to keep pace with incomes, they must rise faster during housing booms to make up for periods of little or no price growth. Canadian home prices were stagnant throughout most of the 1990s, while incomes continued rising, making housing more affordable. Over the past decade, home prices have climbed sharply as mortgage interest rates declined.

Klump adds: "The Canadian housing market is now widely thought to be at, or very near, the top of a cycle, and the ratio of home prices to incomes is currently high. This ratio will revert to its long-term average as it always does as part of a normal housing market cycle. History suggests, however, that it will not do so by means of a significant correction in home prices. The more likely scenario is that home prices will stabilize, giving incomes a chance to catch up again."

The correction in U.S. home prices has sparked fears that Canadian home prices may share a similar fate. However, according to Klump, "warnings to this effect ignore solid Canadian mortgage market trends."

Read the full article here.

 

[Ally]

Canada showing positive signs toward economic recovery: PM

TORONTO — Stimulus funding from Ottawa`s Economic Action Plan will not be extended past the original deadline of March 31, Prime Minister Stephen Harper said Friday at the annual meeting of Canadian mayors.

"People can`t live on adrenaline, and economies can`t live on stimulus. We must return to the black, not drown in the red," Harper said in a statement made available to the media.

The prime minister said Canada is showing positive signs towards economic recovery and that funding for municipalities will continue to come through other programs.

"Canada was the last major developed country dragged into the recession, we will be the least affected by it, and we will emerge from it the fastest and in the strongest position of them all," the prime minister`s statement said.

Read the full article here.

 

[Ally]

Mayor`s solution to his city`s cancer: Bulldoze it

Tired of Detroit`s status as the symbol of everything wrong with urban America, its new mayor has come up with a radical solution: to bulldoze the city.

David Bing, a businessman and former basketball player, said he had no choice.

The 2010 census is expected to record a population of about 800,000, down from 1.8-million in the Motor City heyday of the late 1950s.

The long decline of the car industry and all its spinoff businesses has been exacerbated by the collapse of the housing market. Prices are close to what they were 50 years ago, when magazines featured Detroit as the most desirable city in America.

Decent three-bedroom homes can be bought for $10,000, but no one wants to buy.

With the city facing a deficit of as much as $124 million this year, Bing said the only solution was to reduce the size.

Read the full article here.

 

[Ally]

Rate hike likely after economy grows most in decade

The Canadian economy posted better-than-expected growth in the first three months of 2010, marking the best quarterly performance in over a decade, Statistics Canada reported Monday -- and all but cementing the likelihood of a Bank of Canada rate hike this week.

Strong domestic demand and a robust manufacturing sector helped the Canadian economy record annualized growth of 6.1% for the first quarter, the strongest three-month showing since 1999. This followed a stellar 2009 fourth-quarter performance, of 4.9% annualized (although revised down from 5%).

The expectation was for a 5.8% expansion for the first quarter. The 6.1% gain in output marks the third straight quarter of positive growth after the recession, which lasted three quarters. Further, the first-quarter result is just over double the growth the U.S. economy produced for the first three months of 2010, of 3%.

"While there are some questions on the sustainability of the rebound, there is simply no question that the early stages of Canada`s recovery exceeded even the most optimistic expectations," said Douglas Porter, deputy chief economist at BMO Capital Markets.

Analysts suggest this pace of growth can`t last. However, they said the strong handoff from first quarter to second quarter likely means annualized growth of roughly 3.5% to 4% for the three-month period ending June 30.The first-quarter bump was helped by a stronger-than-expect March result, of a gain of 0.6%.

Read the full article here.