Saddle up for the Ride, More Market Fluctuations

June has brought shocking change in many ways to Canadians.

First, to my neighbours, friends, and family in Southern Alberta, I have been thinking of you and wishing a quick and strong recovery. Those who were affected by the floods and others who supported the clean up efforts, evacuees, or funding the flood relief, this devastation has brought challenges that have felt insurmountable. As Albertans, you have proven your incredible sense of Western charm. Although the timing had every possibility to negatively effect the annual tradition and spirit of Stampede, the community rallied together to make a statement that “Come Hell or High Water,” we’re survivors.

As for the real estate market, changes have shifted from an overall declining market to a buoyant one with increasing sales, prices, construction and permits across the country. Calgary still remains the strongest market breaking records in the number of luxury homes sales and home prices.

Bond yields have risen quickly resulting in compounding mortgage rate increases. Five-year rates that were once hovering around 2.89% have since increased to 3.39% or higher within a short couple of weeks.

The Organization for Economic Co-operation and Development (OECD) latest global economic outlook estimates that Canada’s housing market is overvalued by 64 per cent when compared to rental rates, and by 30 per cent when compared to incomes.  While our top Canadian economist can’t even predict the value of municipal permits within a reasonable margin, May permits increased by 10.5% when it economists expected to see a decline of 3%.  This tells me we may be in for a bit more of a ride before we see some stability set in.

More highlights from June’s headlines:

Overall Market

• StatsCan which showed Canadian municipalities issued $7-billion in permits in April, up 10.5% from March. It was the fourth straight month that the figure has risen.
• 43,000 jobs created in the construction sector in May – Statistics Canada figures
• Canada and Australia at mid-point between countries such as Colombia, the United States and Chile where prices have been rising and places such as Spain, Italy and Ireland where prices have fallen, Scotia reported.
• Canada’s housing market is showing signs of a soft landing amid evidence of robust demand and buoyant new construction plans.
• The impact of Flaherty’s policy changes are beginning to fade, Toronto Real Estate Board President Ann Hannah said “A growing number of households who put their decision to purchase on hold as a result of stricter lending guidelines are starting to become active again in the ownership market.”
• The value of municipal permits rose 10.5% to $6.96 billion, following a revised 6% rise in March, Statistics Canada. The gain was the fourth in a row, the longest streak of increases in a decade. Economist had expected and overall 3% decline.
• Residential permits rose 21% to $4.35 billion in April. Permits for housing projects such as apartments and condominiums jumped 51.9% to $2.15 billion, and single-family permits rose 1.1% to $2.21 billion. The value of permits was 5.4% higher in April than the same month a year earlier, with multiple-unit housing 40.4% higher on the year. Statistics Canada.
• Of 34 country ranked and rated by the Organization for Economic Co-operation and Development, which focused this report on economic powerhouses, Canada came in just after Belgium and Norway as a country marred by home prices out of whack with both average salaries and rental prices. The OECD’s latest global economic outlook estimates that Canada’s housing market is overvalued by 64 per cent when compared to rental rates, and by 30 per cent when compared to incomes.
• The index, which measures price changes for repeat sales of single-family homes, showed overall prices rose 1.1% in May, the ninth time in 15 years that May prices were up 1.0% or more from April.
• Canada Mortgage and Housing Corp. saying new home construction or starts reached the lofty 200,000 level in May on a seasonally adjusted annualized basis.
• Bond yields began rising in early May when U.S. jobs numbers came in much better than expected, and then they shot up this week after U.S. Federal Reserve chairman Ben Bernanke suggested the central bank could start tapering its asset-buying program, under which the central bank now scoops up $85-billion (U.S.) of bonds and securities each month to keep their yields low.
• Royal Bank of Canada, the country’s biggest mortgage lender, has boosted its five-year rates for fixed-rate mortgages twice in the last two weeks to 3.49 per cent, and has also raised rates on mortgages of other lengths. Rival banks are following suit
• Scotiabank and the Royal Bank of Canada announce a round of increases covering various terms of what they call special discounted rates. Increases came a day after TD Canada Trust, the retail arm of TD Bank, boosted its “special” five-year closed rate a tenth of a percentage point to 3.39%. The rate is a discount off the posted rate.
• The May national average price, for all types of property in major markets across Canada, was $388,910 — up 3.7% from a year earlier. Almost all of the local markets that make up the average saw year-to-year increases.
• Zoocasa says 47% of Torontonians describe either themselves or a friend or family member as real estate obsessed. At least in the rest of the country it’s only 34%.
• The number of Canadian homes sold so far this year is slightly higher than projected and it looks as if 2014 will show a rebound, according to a new forecast by the Canadian real estate industry’s main association.
• Millions of Canadians living in many parts of the country could find their homes declared uninsurable, as the insurance industry grapples with skyrocketing water damage claims.
• Construction intentions for condos, a segment believed most primed for a downward spiral, rose 51.9 per cent in April, with most of that coming in Ontario, British Columbia and Quebec. Permits for single-families dwellings inched up just 1.1 per cent. All the gains in building intentions was on the residential side, which rose 21 per cent to $4.4 billion Non-residential permits fell 3.6 per cent to $2.6 billion. The total $7 billion value of permit for April remains below the peaks reached in 2012.
• It’s been an unusual and unpredictable spring market. Transactions are off 2.6 per cent year over year, but the average price of a Canadian home was $388,910 in May, up from $375,062 a year earlier. The month-over-month increase in home sales was the biggest gain seen in more than two years, according to CREA.

Predictions

• The base case scenario is a soft landing,” said David Tulk, chief macro strategist at Toronto-Dominion Bank’s TD Securities in Toronto. “You’d have to see rates move dramatically higher” for a major correction.
• David Madani, Canada economist for Capital Economics, is sticking with his call for up to a 25% decline in home values — a call he first made about two years ago.
• CIBC deputy chief economist Benjamin Tal says he is not convinced Canada’s housing market is preparing for a jump forward, saying that the trend remains toward a pullback. “There’s a big difference between permits and the willingness to break ground if they are having difficult selling, especially in the high-rise market,” he said. However, should future months also point to strong growth in intentions, “we will need to re-think the situation because then we have a market that is doing something it should not be doing.
• The central bank forecast that the debt to disposable income ratio will stabilize this year. Other signs of “constructive evolution” of household imbalances include slowing housing starts and resales since mid-2012, according to the report.
• Toronto: If that unsold inventory isn’t absorbed as projects come on stream over the next year to 30 months, prices could plunge and spread to the rest of the housing market, the central bank warns. “Such a correction would reduce household net worth, confidence and consumption spending, with negative spillovers to income and employment.”
• The Bank of Canada’s key interest rate isn’t expected to jump higher than its 1-per-cent level for some time, but government bond yields are at the whim of the market, and these yields are the benchmarks from which so many other products are priced.
• “Sorry to inform you, but “The Great Real Estate Crash of 2011…no…2012…no…2013” has been postponed until 2014, or until further notice. More seriously, we believe housing remains on track for a fabled soft landing.” said BMO Capital Markets chief economist Douglas Porter.
• CREA is now estimating 443,400 units will be sold in 2013, a decline of 2.5% from 454,573 in 2012. It had previously projected a decline of 2.9% from 2012.
• While CREA still anticipates sales to fall 2.5% in total during 2013 compared to 2012 — to 443,400 units from 454,573 — home buying should rebound to 464,300 units in 2014, a jump of 4.7%.
• In Alberta, sales are expected to rise by 4.2 per cent this year (62,900 units), which will be the best provincial growth in the nation, and then increase by 3.5 per cent (65,100) in 2014.
• The Conference Board of Canada says Paul Krugman and other economists are wrong when they say Canada is in for a debt and housing market bloodbath.
• The economic research group expects house prices to remain high and to continue growing faster than incomes, and it says one of the reasons behind that is Canada’s large immigrant population.
• The bottom line: Most parts of Canada will see, very soon, a modest upward trend in housing prices, and those that don’t are unlikely to see anything worse than a small decline. Meanwhile, Vancouver is high on his list of the least likely places to see any problem at all.

Vancouver

• Home sales rose 1% in May from a year ago, with composite prices down 4.3%, Vancouver’s real estate board.
• Vancouver made one of the largest contributions to the national increase among 34 cities, Statistics Canada said, with permits rising 50.7% to $645 million led by multi-family dwellings. Calgary permits also rose 40.6% to $773 million on commercial buildings.
• The Real Estate Board of Greater Vancouver said they were 2,882 sales in May, a 1% increase from a year ago and a 9.7% jump from April. But sales are still 19.4% below the 10-year average for the month.
• “We’ve seen some steadying trends over the last three months,” said Sandra Wyant, REBGV president, in a release. “The number of homes listed for sale has been keeping pace with the number of property sales, leading to a balanced sales-to-listings ratio. This is having a stabilizing influence on home price activity.”
• New listings also continue to drop with May numbers 7.4% below the 10-year average. New listings for detached, attached and apartment properties in Greater Vancouver were 5,656 in May, an 18.3% decline from a year ago and 3.7% drop from April.
• Total listings in the Greater Vancouver area were 17,222, a 3.4% drop from a year ago. Listings were up 2.9% from April 2013.
• Prices continue to drop in the market. The MLS® Home Price Index composite benchmark price for all residential properties in Greater Vancouver was $598,400, a 4.3% decline from a year. Prices remain up 1.8% from January 2013.
• The board says sales on the Multiple Listing Service in the Vancouver region totaled 2,882, up from 2,853 a year ago and 2,627 sales in April this year.
• Total housing starts in B.C.’s urban markets fell for a second consecutive month to a seasonally-adjusted annualized rate of 21,300 units, down 7.4 per cent from April and marking a reversion to weaker levels seen from November through February.
• The retreat was led by an 18-per-cent pull-back in Metro Vancouver, while starts in the rest of the province rose for a second straight month. Provincial multi-family starts were down nearly 13 per cent from April, which was offset slightly by a 7.5-per-cent gain in single-family activity.
• B.C. recreational property prices held steady or rose slightly in most provincial markets the past year — with falling values in Tofino, Salt Spring Island and Harrison Lake the exception, according to a Re/Max report. Re/Max representative Elton Ash said the market for B.C. recreational properties is slowly improving but property values in many markets remain below the peaks set in recent years. The report said the starting price for a south Okanagan property rose from $610,000 to $649,000 in the past year but remains well below the $800,000 starting price that existed in 2011.
• “Price depreciation has brought B.C. rec properties back into range for more people, especially Canadians,” he said. “Canadians were buying heavily in the U.S. market but a lot of those bargains are gone. Arizona prices have risen by 20 per cent.”
• The report said the starting price of a Whistler property held steady in the past year at $700,000, but remains 12-per-cent below the $799,000 price achieved in 2010.
• The Metro Vancouver market switched from a buyers’ market to a balanced market in March, when the sales-to-listings ratio rose from 14 per cent to 15 per cent, where it still stands, said Real Estate Board of Greater Vancouver president-elect Ray Harris.

Calgary

• Last month had the highest level ever for luxury home sales of properties more than $1 million, according to Mike Fotiou, associate broker with First Place Realty in Calgary. There were 84 luxury home sales in May, besting the record for any month, which were previously 80 in May 2012.
• Kaitlyn Gottlieb, a realtor with Century 21 Bamber Realty in Calgary, said the upper-end market is seeing an increased demand for inner-city luxury homes with areas such as Hillhurst, Crescent Heights, Capitol Hill, Altadore and Parkdale some of the most coveted for homebuyers who are seeking the level of craftsmanship and detail you traditionally find in estate-style homes. It’s a development trend that shows no signs of slowing down.
• The average sale price of a single-family home in May reached a record of $521,887, eclipsing the previous mark of $518,604 which was set in March of this. Average sale prices during the month were up 4.03 per cent from a year ago. The median price was also a record at $454,400, up 4.24 per cent from last year. The previous median price record was $450,000 in March of this year. The benchmark price in May, looking at typical properties sold, was up 6.88 per cent to $456,900.
• Record prices were also set in May for total MLS residential sales in the city with the average price at $462,076, up 3.83 per cent from last year, and the median price at $406,500, up 4.23 per cent from May 2012.
• Previous record prices for total MLS residential sales were set in March of this year at $460,903 for the average and $403,000 for the median. The benchmark price in May was up 6.89 per cent to $409,600.
• In May, total MLS sales in the city of 2,544 were up 6.85 per cent from last year while single-family sales of 1,766 increased by 3.46 per cent.
• The price of new homes rose 0.2% in April from March, more than the expected 0.1%, with the oil town of Calgary the top contributor, according to Statistics Canada data.
• For the third straight month, Calgary was the top contributor in April to the national advance for new home prices.
• Canada Mortgage and Housing Corp. reported that total starts in the Calgary census metropolitan area reached 1,078 units during the month, which was an increase from 949 in May 2012.
• Builders started construction on 41,438 new homes in Alberta in May — the highest this year and the first time since early 2008 that the figure has risen above the 40,000 mark.
• What’s more, the trend over the last several months clearly suggests that the housing market is heating up,” said Todd Hirsch, chief economist at ATB Financial, “Between May 2012 and May of this year, housing starts are 14.1 per cent higher than they were in the previous 12-month period. “What’s causing this boom in home construction isn’t any big mystery: population growth. Even if overall economic growth has slowed somewhat, the inflow of people into our province hasn’t.”
• The latest Labour Force Survey, released last week, points to a surge in the labour force, which has grown by 59,400, or 2.6 per cent, over the last 12-months.
• Interprovincial and international migration to Alberta is driving some of the demand for new homes. High wages, low unemployment and a younger population are also contributing factors,” said Hirsch
• Calgary MLS sales also increased by 8.9 per cent in May from a year ago to 3,247 transactions while the market overall in Canada saw a decrease in sales activity of 2.6 per cent year-over-year to 51,764.
• “The real estate market in Calgary is supported by three important factors, any of which would support a robust market independently and yet we enjoy all three,” said Cody Battershill, a realtor with RE/MAX House of Real Estate in Calgary. “The underlying variable that ties all three together is the desirability and quality of living we enjoy in Calgary.”
• In May, Calgary saw average MLS sales price growth of 2.6 per cent from last year to $440,675 while in Canada average sale prices rose by 3.7 per cent to $388,910.
• In Alberta, sales rose by 3.2 per cent year-over-year to 7,209 units and average sale prices jumped by 2.9 per cent to $385,702.
• Three factors for Calgary’s strong market:

1. The first factor is strong migration to Calgary and Alberta.
2. The second is Calgary’s demographics. Canada’s youngest major city with the average Calgarian being in their mid to late 30’s. This is important as first-time buyers kick start the property ladder and enable existing homeowners to sell and move up.
3. The third factor is that Calgary is a head office leader and business hub that is recognized internationally for our experience, technical prowess and leadership. Calgary has more head offices per capita than anywhere else in Canada and is the world’s 17th most competitive financial centre.

Toronto

• Scotiabank’s quarterly study on global real-estate trends says Toronto’s housing market is seeing slower sales and construction. Scotiabank says housing starts in the Toronto area totaled just 28,900 units in the first four months of 2013, down about 40% from last year.
• “There are 19 million square feet of office under construction. There are 20 plus office buildings going up as we speak,” said Ross Moore, director of research for Canada for CB Richard Ellis. “In downtown Toronto, we’ve never seen so much under construction, including the 1970s and 1980s.”
• Home prices in Toronto rose 5.4% in May from a year ago, the biggest increase in five months, suggesting demand in the country’s largest housing market remains robust, the Toronto Real Estate Board reported.
• The average sale price rose to $542,174, from $514,567 a year ago, while a composite home benchmark price index for the city was up 2.8%, the Toronto Real Estate Board reported. Unit sales dropped 3.4% from a year earlier to 10,182, the board said. On a year-to-date basis, Toronto sales are down 9.6%.
• Statistics Canada said the value of April municipal building permits posted a 10.5% gain.
• Even condos saw price gains of 1.2 per cent in the City of Toronto — and just under one per cent in the 905 region. The number of condos sold in the GTA fell 9.3 per cent last month compared to May 2012, but for the first time in months, that figure wasn’t in the double digits.
• The average price of a condo in the City of Toronto rose to $372,768 in May and $293,398 in the 905 region, according to TREB
• The average days on market was up slightly year over year, to 23 days last month compared to 21 days a year ago.
• The average price of detached homes averaged $676,797 in May, up 5.5 per cent in the 416 region to $864,536 and $602,576 in the 905 region, according to TREB.
• Semi-detached homes were up 4.1 per cent to an average $496,120 across the GTA with the biggest growth in the 416 region where average prices were up almost 8 per cent to $633,625 compared to $409,632, a 2.3 per increase, in the 905 regions.
• Townhouse sales saw the biggest decline in sales next to condos, with transactions down 7.3 per cent across the GTA. Average prices, however, came in just under $400,000. The average townhome sold for $463,772 in the 416 region, up .2 per cent year over year, while prices in the 905 region hit $375,576, up 4.4 per cent over last May.
• The growing list of fees being slapped on new home buyers now adds up to an average of $118,400, or 23 per cent, of the price of a new, single-detached home in the GTA, and more than $64,000, or 20 per cent, of the cost of a new high-rise condo, said the Building Industry and Land Development Association in a report. If city council goes ahead with a proposal to double development charges, those extra costs — some $7,671 on the average one-bedroom unit and $10,624 on the average two-bedroom — are likely to land right in the laps of unsuspecting buyers.

Sales Dropping, but Homes Still Unaffordable

Across the nation “affordability” is still challenging buyers, especially in the detached bungalow market. Vancouver leads the pack with 82.3% of typical household income going to housing costs. Toronto is estimated at 53.8% while Calgary is seen as one of the most affordable cities in the county.

Overall sales and building starts have dropped, however prices remained consistent, with even some marginal increases.

Flaherty has announced is appreciation for the slow down, while CAAMP is projecting a drop of 150,000 direct and indirect construction related jobs by 2015.

And as of June 3, 2013 we have a new Governor of the Bank of Canada. Replacing Mark Carney, Stephen Poloz has inherited an economy of local uncertainty, but global strength.

More highlights from May’s headlines:

OVERALL MARKET

• CMHC: Work started on about 174,900 homes at a seasonally adjusted annual pace in April, down 3.5% from March. Economists forecast a reading of 175,000 according to the median of 25 responses to a Bloomberg News survey. 31% below the year-ago pace • Finance Minister Jim Flaherty welcomes the slowdown of condominium construction in Toronto and Vancouver after signs of overbuilding there. He notes no need for further government intervention • Finance Minister Jim Flaherty announced the new governor of the Bank of Canada would go to Stephen Poloz, an economist and head of the Export Development Canada, the Ottawa-based export credit agency. A surprise, but it should not have come as a shock. • CMHC: Multiple-unit housing starts in urban areas fell 3.5% in April to a pace of 93,500, a decline of 42% from the same month a year earlier. Single-unit work fell 0.9% to 60,100 units, down 16% from the year-ago month. • Office of the Superintendent of Financial Institutions: Considering new rules that would limit banks from issuing any mortgages at all with amortizations of more than 25 years. • Most mortgage holders said they expect to repay their loan 3.4 years earlier than the 25-year amortization period. • The costs of owning a detached bungalow in Vancouver take up 82.3 percent of a typical household’s income, up 0.1 percentage points from the previous quarter. In Toronto, the largest city in Canada, that figure is 53.8 percent, up 0.8 points, according to a housing affordability report for the first quarter produced by Canada’s largest lender. • Since then, home resale activity has fallen 8.3% and housing starts by 15%. They are likely to fall further, the report says. • CAAMP: predicts that by mid-2015, national home construction will fall to about 150,000 units annually, or about 25-30% less than the 205,000 average for 2011-2012. That will result in about 150,000 fewer construction and indirect jobs, such as in the real estate sector and support industries. • Across Canada, the costs of owning a standard two-story home take up 48 percent of a typical household’s monthly pretax income, while condominiums eat up 28.1 percent, according to the index. Both figures are unchanged from the previous quarter. • RBC: Exceptionally low mortgage rates have been the chief factor in keeping homeownership costs relatively affordable. • Since that most recent change, home resale activity has fallen 8.3 per cent and housing starts by 15 per cent across the country. They are likely to fall further, the report says.

VANCOUVER

• CAAMP: Vancouver — the other municipality known for its hot housing market — starts are expected to fall by a third to about 13,000, resulting in a loss of about 7,500 jobs. • Real Estate Board of Greater Vancouver: This April’s sales were the lowest April total since 2001 and 20.9 per cent below the 10-year sales average for the month. • There were 2,627 home sales in Vancouver in April, a decrease of 6.1 per cent from last April and an increase of 11.9 per cent from March. • The home price index composite price in Greater Vancouver is now $597,300 for all property types, the board’s numbers show. Although this is down 3.9 per cent from April 2011, it is up 1.6 per cent from this January. • Bob Rennie: Two markets will be downsizing, aging baby boomers on the one hand and their first-time-homebuyer kids and grandkids on the other hand. But in both cases, the purchases will be financed by the baby boomers, who will be selling their fully-paid-for single-family homes. • Colliers International: reported a 45-per-cent drop in sales of new multi-family homes in Metro Vancouver for the first quarter of the year compared to the same period last year.’ • In Vancouver, the slowdown could mean the loss of 7,500 construction-related jobs and a 30-per-cent drop in housing starts from 2011 to about 13,000 a year, said the Canadian Association of Accredited Mortgage Professionals chief economist Will Dunning.

CALGARY

• RBC Economics Research: Calgary’s housing market renaissance has not been a steady process, as the overall improving trend in resale activity was inconsistent last year. • Calgary remains one of the more affordable housing markets in Canada • The RBC measures for Calgary in the first quarter of 2013 were: Bungalows: 38.7 per cent (up 0.8 points)
- Two-storey homes: 38.8 (up 0.4)
- Condominiums: 22.9 (up 0.8)

TORONTO

• CAAMP: In the Toronto area starts expected to drop 50% to about 22,000, leading to a loss of about 35,000 jobs. • Toronto Real Estate Board: numbers show listings were actually up as of mid-April by about 15 per cent with 8,770 new properties for sale across the GTA compared to 7,580 a year earlier • Sales of homes across the GTA slipped by 2.1 per cent in April, but prices were up 2 per cent, as the usually hot spring market suffered through another wet, cold month. • Sales plummeted by 55 per cent in the first three months of 2013 over the same period last year, as developers held back new project launches and took a wait-and-see approach in the face of a softening market and climbing inventory of condos for sale. • A total of 2,728 new units were sold up to the end of March, down 29 per cent just from the final three months of 2012. Totaling less than half the 6,070 units sold in the first quarter of 2012 when the condo market was starting to come down from a record year of sales — 28,190 units — in 2011. • House sales were down almost 10 per cent in the first half of May, but prices climbed by one of their highest levels in months — a 5.4 per cent gain driven largely by sales of detached homes. • While sales were down 13 per cent across the GTA, and the inventory of units for sale remains above historic norms, prices were up 1.1 per cent overall across the GTA — 2.1 per cent in the city. • Toronto Real Estate Board: Sales of all housing types took the biggest tumble in the City of Toronto where they slumped by 11.4 per cent year over year, fuelled largely by a 21.3 per cent drop in townhouse sales and a 13.6 per cent in condo sales, according to mid-May sales and price figures released.

Prices defying both gravity and logic

Sales were up from the month previous, however, when compared to a year ago there are considerable double-digit drops across the nation.  Yet, prices are still increasing overall mainly due to a few select markets such as Calgary.  Calgary’s buoyant market is experiencing low inventory, increasing building permits and higher prices and showing signs of a strong market and boom-like activity.  That being said, Vancouver and Toronto still hold 1 and 2 respectively for the most expensive markets, with some buyers forced into artificial bidding wars set by Realtors in the Easter market.

Canadian household and mortgage debts had the smallest 12-month increase for any month since 2001 and other debts such as credit cards and loans have had the smallest 12-month increase for any month since 1993. Finance Minister Jim Flaherty is taking responsibility for this momentum, but believes that there is still more to be done.

The Bank of Nova Scotia Chief Executive Officer Richard Waugh voiced his concerns with the level of influence the Minister is enforcing. Waugh believes the Government shouldn’t interfere with mortgage pricing set by the country’s lenders. “I understand why the finance minister is concerned about the Canadian economy, but I just philosophically don’t think government should be setting product pricing,” Waugh said  “Despite the difficulties of central banks to use interest rates, the alternative of trying to manage specific products or prices, to me, is fraught with difficulty.”

More highlights from April’s headlines:

Overall Market

STATS

• National home sales declined 2.1% from January to February, according to the Canadian Real Estate Association, and actual activity came in 15.8% below levels in February, 2012. Almost 80% of local markets posted year-over-year declines in house sales while new listings dropped 60%; worst in Toronto, Vancouver, Montreal and Saskatoon.
• Royal LePage said the average price for a standard two-storey detached house was up 2.2% in the January-March period compared with a year ago, while the national average price for detached bungalows rose 2.4%. The average price for condominiums rose 1.2% from first quarter of 2012, however, Vancouver, Victoria and Saint John, N.B., had year-over-year and quarter-over-quarter price declines in all three categories.
• Royal LePage survey, the national average price for a two-storey house was $407,044 in the quarter, the bungalow average was $364,857 and the average price for a condos was $246,071.
• Overall, prices rose in 10 cities, stayed unchanged in nine and fell in two. On a year-over-year basis new housing prices in Canada rose by 2.1% in February, down from 2.2% in January.
• While housing starts rose for a second straight month, all the strength was in the rural market — urban starts dropped sharply — and a longer-term trend showed construction is continuing to moderate, according to a report from government agency Canada Mortgage and Housing Corp.
• Data from Statistics Canada showed the value of Canadian building permits rose a weaker-than-expected 1.7% in February as a sharp decline in plans for multi-family housing partially offset strength in other projects.
• Reports show further evidence of a slowing in Canada’s housing market, which was red-hot a year ago but has cooled dramatically since the government tightened mortgage rules in mid 2012 to prevent a U.S.-style real estate bubble.
• In line with the softening trend in the housing market since mid-2012, permits for multi-family housing fell 19.1% in February, the seventh decrease in eight months, Statscan said.
• Urban starts fell 2.7% in March to 157,217 units, led by a 6.6% decline in single-family starts to 60,558 units. Multiple-unit urban starts were relatively unchanged at 96,659 units in March, CMHC said.
• Statistics Canada released a report on building permits that showed future building intentions for residential construction fell 7.2 per cent in February to $3.6 billion.
• Starts in March totaled 12,273 or 184,028 annualized, just slightly higher than in February but down 13.6 per cent from a year ago.
• Loan growth reached a recent peak of 13% in May 2008, according to Geoffrey Kwan and Sean Adamick, analysts at the Royal Bank of Canada unit.
• The Canadian Real Estate Association reported Monday that existing home sales in the 26 municipal markets it tracks rose a seasonally adjusted 2.4% in March over the previous month
• Overall, the real estate association said there were 39,527 residential properties sold through the Multiple Listing Service in March, compared with 46,669 a year earlier.
• Ground zero for the cooling scenario in the report was Halifax, which dropped almost 11% in March from February and 36% from a year ago. At the other end of the spectrum, Edmonton was up 1.6% in the month and 1.4 from a year ago.
• On a month-to-month basis, Sales were up in most big cities, particularly Vancouver, which saw a 10.9% jump after seeing among the biggest drops recently, and Regina, up 12.2%.
• On an annual comparison, sales in Winnipeg and Regina were down almost 24%, 15% in Calgary, 20% in Toronto, about 19% in Vancouver, about 17% in Montreal, and almost 16% in Ottawa.
• On the inflation front, there is little pressure to hike rates, with annual inflation slowing in March to 1% — well below the bank’s 2% target. The bank on Wednesday said inflation would “remain subdued in coming quarters before gradually rising to 2 percent by mid-2015 as the economy returns to full capacity.”
• The multiple offer game creates an inflationary environment that these days the real estate market just might need. The latest statistics from the Canadian Real Estate Association show average prices in Canada up 2.2% from a year ago. March sales were off 15.3% from a year ago and active listings are still climbing in many markets.
• Statistics Canada.The federal agency reported that the Vancouver census metropolitan area had the highest value per dwelling at $482,800, followed by Victoria, at $393,400, Calgary, at $384,500, and Toronto, at $362,000.
• RBC Economics says overall household debt stood at $1.67-trillion in February, up 4.5% — the smallest 12-month increase for any month since June 2001. Total Canadian mortgage debt stood at $1.16-trillion in February, up 5.4% compared with the same month last year — the smallest since November 2001. Non-mortgage debt including credit cards, personal loans, lines of credit and other loans stood at $512-billion — up 2.5%, the smallest 12-month increase since July 1993.

SURVEYS

• The average Canadian homeowner doesn’t think they’ll be mortgage-free until they’re 57 — two years longer than what they expected last year, a survey by CIBC suggests (TSX:CM).
• The average first-time homebuyer in Canada is 29 years old and expects to be able to put down a down payment of $48,000 on $300,000 home, according to a recent poll by the Bank of Montreal. Those in Atlantic Canada say they expect to spend an average of $224,000 on a first home, while those in British Columbia anticipate to pay an average of $454,000. Forty-six per cent of those surveyed also they’ll choose a fixed mortgage rate when they buy, versus 20% who will choose a variable rate. Twenty-three per cent of those surveyed say they will still have a mortgage within 25 years; 16% say within 20 to 24 years and 20% say within 10 to 19 years.
• Steeper down payments, higher property prices, heavy student debt loads and an inability to afford monthly mortgage payments are among the top obstacles facing Millenials, or Generation Y, looking to own a home, according to the poll. The poll from TD Canada Trust suggests. Perhaps the most unique challenge faced by would-be Gen Y homeowners: student debt. Balancing student loan payments while saving for a home or paying a mortgage was cited as a barrier by 23% of Millenials. Compare that to 2% of Boomers.
• The study found Generation Y (or Millennials) identifies three main obstacles to home ownership that weren’t as much of an issue for Boomers: the ability to save for a down payment, housing prices and insufficient salaries.

QUOTES & PREDICTIONS

• “Typically when you have a distortion in the economy, it is rarely painless to rebalance it. We’re in for a relatively painful period…We’re in store for something between a U.S.-style crash and a soft landing.” Ben Rabidoux, an analyst at M Hanson Advisers.
• “Overall, we think existing home sales will continue to decline with negative implications for the elevated level of home building and broader knock-in implications for domestic demand growth,” David Madani, an analyst with Capital Economics.
• “Despite the earlier-released upside surprise in March housing starts, today’s data confirm that homebuilding activity could continue to struggle in the months ahead, weighing on the overall economy,” Emanuella Enenajor, economist at CIBC World Markets.
• In one of the gloomiest forecasts issued on the Canadian economy since the recession, Capital Economics predicts a sharp and protracted housing correction, in conjunction with muted business investment and government austerity, will keep Canada’s economy in stall mode throughout 2013 with a one per cent growth rate, only improving slightly to 1.3 per cent in 2014.
• In an interview, the firm’s chief Canadian economist David Madani agreed that his view is darker than most, but noted the consensus — the average of forecasts — has been steadily dropping for months and coming closer to his position. “I wouldn’t be surprised to see housing starts fall to 150,000 by the end of the year,” he said. “Historically housing markets are either overbuilding or underbuilding and this boom we’ve been in the last decade has been enormous … and that why I think the correction process will be fairly severe and protracted.”Over the long term, Madani says Canadian home prices, which have held up remarkably so far in the face of falling sales and starts, will drop by 25 per cent.
• Mortgage loan growth will slow to about 2% to 4% in the next two years from 5.4% as home sales and prices cool, RBC Capital Markets says in a new note. Mortgage loan losses will remain low partly due to employment growth, they said. Growth rates over the next two years will be similar to the 1990s housing downturn, the analysts said.
• Bank of Montreal chief economist Doug Porter noted that sales in the last four months are down 14% over the past year, but he too saw the slide moderating and that sales will likely only fall by seven per cent through 2013.
• The consensus of economists is that home prices will likely fall about 10% in the next two years, with some believing the correction could be as high as 25%.
• Dunning expects housing-related employment to take a dive, with as many as 190,000 jobs being lost through 2015. “Ottawa is getting more than they bargained for,” he adds, and the worst economic impact may be yet to come. “Slower sales will translate into slower housing starts with the impact felt in the second half of this year. The reduction in housing starts will be much larger than anyone is expecting.” housing analyst Will Dunning told CMT.
• Bank of Canada chief Mark Carney said he is unlikely to raise interest rates until economic growth surpasses 2% and inflation quickens, adding that personal debt levels and the housing market will also influence the timing of his next move.
• A new survey from Bank of Montreal finds 72% of buyers are unwilling to get into a bidding war. Among first-time buyers, 37% are willing to go “over budget,” BMO said in a news release Tuesday.
• “The combination of very low mortgage rates and flat home prices, against a background of general economic improvement across the nation, is not something we’ve seen before,” Soper said Thursday.
• There is no Canadian housing market,” says Campbell, senior analyst and founding partner with the 2,900-member Real Estate Investment Network (REIN). “At no other time in history has the real estate market in Canada been so regional,” he notes. “If you go to Hamilton, that market is strong. But in Waterloo the market is starting to slow down, even though the cities are only half an hour apart. And what’s going on in Ottawa has nothing to do with Halifax.” Campbell’s point? Housing is a local commodity, and always will be. That’s why average house prices in Fort McMurray dwarf those in Camrose, and why average prices in Edmonton are barely half those in Vancouver. Just because housing markets in Toronto and Vancouver are soft — a point made ad nauseum by the myopic national media — doesn’t mean the rest of the country is in the same boat.
• Despite the recent moderation in the rate of new housing construction, there are still signs of overbuilding, particularly of multiple-unit dwellings in some urban areas (see chart below),” the Bank of Canada

Vancouver

• Vancouver remained by far the most expensive market in Canada with the average price for detached two-storey houses and bungalows above $1-million while the average condo price was $481,250.
• Real Estate Board of Greater Vancouver reported a decline in sales of 18.3% at 2,347 sales in March compared with 2,874 sales recorded in the same period a year ago. The sales last month were the second lowest March total in Greater Vancouver since 2001 and 30.2% below the 10-year sales average for the month, the board said.
• “While home sales were below what’s typical for March, we are seeing more balance between the number of sales and listings on the market in the last two months, which is having a stabilizing impact on home prices,” said Sandra Wyant, president of the Vancouver board. The sales-to-active-listings ratio was 15.2% in Greater Vancouver, the first time the ratio was above 15% since May 2012.

Toronto

• Toronto, the country’s most populous city and often considered the second-most expensive after Vancouver, followed the national trend to higher prices in all three types of housing.
• The Toronto two-storey average in the first quarter was $671,252, the bungalow average was $565,700 and the condo average was $359,671.
• The Toronto Real Estate Board said sales were down 17% at 7,765 sales through its MLS system last month compared with 9,385 in March 2012.
• While Toronto saw a double-digit downturn in buying activity in the first quarter of this year over last, it has yet to seriously impact prices, the survey shows. Royal LePage president Phil Soper.
• Soper predicts prices gains could slip, possibly into negative territory, by the end of 2013 and would be unlikely to pick up again until into 2015, driving the Toronto market into serious buyers’ territory for the first time since the 2008 recession
• In Toronto, the drop in sales did not seem to affect house prices as the average March selling price crept higher compared with a year ago.
• The Toronto board says the average price was $519,879, up 3.8% from March 2012
• According to the Toronto Real Estate Board, home sales in Toronto fell more than 17 per cent in March, compared to the same month a year earlier. Condo sales fell 18.4 per cent, but detached homes fell almost as much — 17.8 per cent.
• Prices in the Toronto area rose 4 per cent, year over year. And news continues to come in that bidding wars for detached homes in Toronto are still happening.
• Appears to be artificially-created bidding wars in the form of real estate agents “holding offers” — the practice of requesting that all potential buyers submit a bid for a house in writing, all at the same time.
• So far this year, they’ve announced 13 new condominium projects, the fewest since the recession in 2009, when there were just three over the same period, RealNet figures show. In the same period last year, 29 new projects were announced, including Tridel Corp.’s Ten York, the third-tallest residential tower in the country at 75-stories when it was first marketed.
• Sales of high-rise homes in Toronto have dropped 34% since 2011, after rising 64% in the past decade until 2012. Prices have declined 5.5% over the past two years, according to RealNet.
• “There is only one area of real softness and that is the condo apartment market,” stressed Pinsonneault. “For condos, you have the worst market conditions, outside of the recession, that we’ve seen since 1998.” n March there were 4.3 months of condo inventory on the market The historic median level is 3.1 months. National Bank economist Marc Pinsonneault. When it comes to the single-family home market in Toronto, however, demand continued to outstrip supply in March. That has buoyed house prices and seen the active sales-to-listings ratio drop to 2.2 months, below historic averages closer to 3 per cent, said Pinsonneault.
• “The lack of inventory is a big problem in the high-end market,” so agents are having to find their own properties rather than look to the MLS system, said Andy Taylor of Sotheby’s Toronto office, which has done more international business in the last 18 months than in the last six years. Demand from wealthy Syrians, Egyptians and Europeans looking for a safe and relatively stable place to park their millions — Canada’s softening real estate market.
• Toronto condo builders are slowing development in a bid to avoid a crash after a decade-long boom led to 159 towers now under construction.
• The now-renamed Residential Tenancies Act sets out tenant protections for all rental units across Ontario, but rent control provisions only apply to buildings occupied before Nov. 1, 1991. That’s turned out to be great news for condo investors, allowing them to pass on escalating maintenance fees and other costs almost directly to their tenants.

Calgary

• In Calgary, average housing unit prices including condos and townhouses were up nine per cent to $460,800 from $422,400 in March 2012. That’s more expensive than the record $457,100 in February, which upset the previous high mark of $452,600 set in July 2007.
• Single-family homes sold in the city averaged $518,400, ahead by nearly 10 per cent over March 2012, while condos were up nearly 11 per cent at $300,900 and townhouses were up 13.5 per cent at $355,500.
• The average MLS sale price for a single-family home in February was $518,500, beating the previous record of $506,700 in July 2007.
• CREB said the inventory of active homes for sale in Calgary showed the lowest March levels in more than five years, coming in at about 4,000 units, up from February’s levels but well below the number available one year ago.
• Ann-Marie Laurie, CREB’s chief economist, said new single-family listings under $500,000 are declining at double-digit rates, driving consumers at that price point to either surrounding towns, condominiums or the new home market.
• Alberta’s population grew by nearly 116,000 residents or 3.04 per cent in 2012, almost triple the national growth rate. Yet the average price of a single-detached home in Edmonton, at roughly $401,000 in February, has yet to surpass its 2007 peak.
• Alberta: So what has capped the market’s gains to date? Campbell says several negative “influencers” have limited the price increases thus far, including tougher mortgage qualification rules as well as those gloomy national headlines. In addition, some buyers who were burned by purchasing at the peak of the last cycle remain gun shy, and many recent newcomers to the province aren’t yet comfortable committing to major purchases, such as a new home. Campbell also cites the perverse psychological effects created by Alberta’s boom-and-bust economy. The result: Albertans, more than residents of other provinces, tend to obsess about the timing of the next big bust. “The real difference this time is hidden in the strong forces of today’s market influencers. It is very true that the market drivers are all in place to support a large growth in housing purchase demand and price increases, in fact it is a textbook market for a boom,” said Campbell.
• New home prices in Canada rose by 0.2% in February, the 23rd consecutive month-on-month increase, pushed up by a buoyant market in Calgary, Statistics Canada said on Thursday.
• The supply of new high-rise units reached 21,262 in February, 34% more than the same period a year ago and close to a record 21,696 in October 2012, RealNet figures show. About 61,000 units are currently under construction — the most ever — and a record 35,757 residential units will come on stream next year, RealNet said.
• Sales of high-rise homes in the city have dropped 34% since 2011, after rising 64% in the past decade until 2012. Prices have declined 5.5% over the past two years, according to RealNet.
• Ben Brunnen, chief economist with the Calgary Chamber of Commerce, said the province is definitely seeing all of the signs of strong economic and potentially housing growth. “Net inter-provincial migration, population growth is up. Unemployment is low and GDP growth is relatively high,” said Brunnen. “I think we’re seeing probably a bit more of a cautious consumer out there. I do think we’ll see some strong real estate activity happening in Calgary but not like in the boom. “I think there continues to be some caution in the market for a number of reasons. While Alberta’s economy is good, the global economy continues to be shaky, especially Europe and the United States. So people don’t have that strong confidence per se…
• The estimated value of building permits in March in Calgary reached $476.7 million, up 25 per cent from a year ago.
• Year-to-date, total permits of $1.2 billion are up 20 per cent from the same period a year ago.
• Residential permits have risen by 15 per cent to $647.3 million while the non-residential sector is up by 27 per cent to $543.3 million.
• The Conference Board of Canada report listed Calgary — along with Regina, Saskatoon, Thunder Bay, Halifax and Newfoundland — in the seven per cent plus range for average year-over-year price growth for the latest three months.
• In March, the board said, the seasonally-adjusted annual rate for sales in Calgary was 27,636, up 4.8 per cent from last year while listings were down 3.0 per cent to 42,540.
• The average price was $435,032, an increase of 6.6 per cent from a year ago.
• In Alberta, total assessment value of $471.7 billion represented a 97.0 per cent hike between 2006 and 2011 and an increase of 8.1 per cent from 2010 to 2011.

Real Estate Standoff

We’re in the presence of a real estate standoff, in more ways than one.

Buyers are feeling like it’s better to wait until the sale slowdown and an anticipated increase in interest rates lessen competition and lower prices. Sellers, meanwhile, are accustomed to the price increases we have experienced for more than a decade and expect to get more than their asking price, but only if they wait out the slump. Both parties are sitting on the sidelines, putting little pressure on prices and inventory.

Meanwhile, a standoff between government protection and the basics of economic supply and demand is also hovering over the real estate industry. Finance Minister Jim Flaherty has put pressure on banks to not indulge in mortgage rate wars in hopes to curb public interest as Canadian consumer debt soars. Mr. Flaherty may have overstepped his boundaries when he pressed Manulife Bank into reversing their new promotion lowering their five-year fixed mortgage from 3.09% to 2.89%. Prior to that, he publicly disapproved the Bank of Montreal for dropping their posted rate to 2.99%, which was disregarded by the lender. The introjections emphasize the government’s determination to limit consumer interest in the housing market without enforcing additional mortgage rules.

Since the last mortgage rules were implemented in July 2012, a decline in housing prices and sales has been experienced across Canada, with small pockets of markets increasing. On the brighter side, overall the market is stable and making a slow correction, employment is still trending upwards and banks have managed to collectively post a record high 7.33 Billion in profit.

More highlights from the March headlines:

Overall Market

• Seasonally adjusted rate of housing starts rose to 180,719 units in February, up from 158,998 in January. (CMHC)
• There were 10,965 starts last month, down from 12,247 in February 2012. (CMHC)
• Canadian home prices are overvalued by about 20% (Fitch Ratings)
• Carney is warning Canadians to pay down debt on the grounds that rates are sure to rise in future.
• The Bank left Canada’s core lending rate unchanged at 1% for the 29th straight month, with no change in sight.
• The country’s dominant banks brought in a collective record profit $7.33-billion, up more than 11% from last year.
• Credit-market debt such as mortgages rose to 165.0% of disposable income, compared with 164.7% in the prior three-month period. (Statistics Canada)
• Price index for new homes rose 0.1% in January, following a 0.2% increase in December. (Statistics Canada)
• The growth of household credit slowed to about 3% near the end of 2012, the lowest rate since 1999, and down from about 5.5% through much of the remainder of last year. (Central Bank)
• Mr. Flaherty is expecting that banks engage in prudent lending – not the type of ‘race to the bottom’ practices that led to a mortgage crisis in the United States, however, if the banks don’t pass on better rates, consumers will go to one of the many monoline lenders that fund mortgage brokers.
• A slowing housing market could deal the most damage to CIBC, National Bank and TD (Barclays Capital)
• Google says it saw a 50% jump in the number of people using the term mortgage after one of the major banks announced it was cutting its five-year posted rate 10 basis point to 2.99%.
• After years of growth, economists say the real estate boom is over and predict Canadian housing prices to flatline over the next decade.
• Canadian residential home prices grew by an average of 5.4% per year between 1980 and 2012, climbing about 7% per year in the last decade. The market has cooled over the last six months and will continue its slide over the next few years as tighter mortgage rules, modest economic growth and higher interest rates push rates downward. The economists project a 3.5% annual rate of return on real estate beyond 2015, a low rate that has not been seen since 1980.
• Home sales fell 15.8% year-over-year in February and 2.1-per-cent lower than January. (CREA).
• The national average price fell 1% to $368,895 in February, but removing Vancouver’s sluggish market from the mix, prices actually rose 1.3% year-over-year, Using its home price index measure prices actually rose 2.7 per cent in February from the year before. (CREA)
• The number of newly listed homes fell 1.2% last month from January to their lowest level since November 2010. (CREA)
• The CREA cut its forecast for sales this year after a weak second half of 2012 that saw sales slow more than it expected some markets. 2013 sales are expected to total 441,500 units, down 2.9% from 454,573 in 2012. The revised outlook compared with earlier expectations for a 2% drop in sales. The national average home price is forecast to slip by 0.2% to $362,600.
• The number of homes sold in February fell 16% compared with the same time last year. Roughly 80% of local markets in Canada saw housing sales declines last month. (Canadian Real Estate Association)
• Largely flat at the national level, gains in excess of inflation are still expected in the Prairies and Newfoundland. British Columbia, Ontario and New Brunswick are expected to post declines in average prices this year. Alberta and Manitoba are the only provinces where sales are expected to rise in 2013. (CREA)
• Vancouver remains the clear weak spot, with sales down a seasonally adjusted 9.8% in February and 29.2% in the past year (BMO)
• The mortgage insurance sector. The new rules will “gradually limit” the issuance of low ratio mortgages to only those mortgages that are in the CMHC securitization program. Ottawa will prohibit the use of any taxpayer-backed insured mortgage, both high and low ratio, as collateral in securitization vehicles that are not sponsored by CMHC
• A slowdown in Canada’s housing market will continue through 2013 and years of stagnation may follow, but no crash is likely because demographic trends will support demand in the medium term. Home sales have already dropped more than 10% from spring 2012, with prices leveling off but not yet falling except in particularly hard-hit markets. Expect a decline in prices of around 5% but that the drop will likely play out over the next couple of years rather than happen quickly. (Scotia Bank)
• Demographics, including steady immigration and the preference of baby boomers to remain in their homes, will support housing demand. Immigration, which adds some 250,000-300,000 people to Canada’s population every year, will increasingly be the dominant source of new household formation. Immigration is most likely to support house prices in big cities. (Scotia Bank)
• Canada experienced its sixth consecutive month of house price declines in February, with prices falling 0.2 per cent from January. (Teranet-National Bank)
• A decline in prices is expected in the third quarter of 2013, but for the most part interest rates are offering some protection to the size of the decline. There is absolutely no sociological change in people’s desires to own homes, young people want to be part of the 70% of Canadians who own homes.” (Royal LePage Residential Services)
• Real estate author Don Campbell said investors he deals with are trying to lock in as long as they can because rates are so low. (REIN)
• The number of Canadians expecting to buy a home within two years has dropped dramatically even though overall confidence in real estate remains strong. 15% of those surveyed said they were likely to buy in the next two years, a drop from 27% of respondents in last year’s survey. The 12-percentage point drop is the biggest recorded by the poll, now in its 20th year. 84% felt real estate remained as a sound investment, while 52% said now is a good time to get into the market. (RBC annual survey)
• Canadians aged 44 to 64 showed an above-average tendency to accumulate debt, suggesting that holding debt later in life may be a new trend and one with some staying power.

Vancouver

• Metro Vancouver saw a sharp drop in housing starts in February, both in total numbers and the overall pace of construction. The decline was largely due to lower condominium and townhouse starts, which came in at 833 in February compared with 1,675 starts in the same month a year ago. A big increase in single-family-home starts, at 279 versus 195 a year ago, helped offset the other declines, leaving overall starts at 1,112 for the month, down 40 per cent from 1,870 starts in the same month a year ago. (CMHC)
• Housing resales in Metro Vancouver have slowed during the past year. In February, 1,797 sales, which was down 30 per cent from the same month a year ago. (REBGV)
• Across B.C 1,596 starts in February, down from 2,235 in the same month a year ago. (CMHC)
• Vancouver homes are overpriced by about 26%. Greater Vancouver’s housing values could drop by as much as 15% over the “next several years. (Fitch Ratings)
• MLS® home sales fell to the lowest levels since early-2009, declining 3.4% from January to a seasonally adjusted 4,875 units. On an unadjusted basis, home sales were nearly 24% lower than the same-month last year, but declines were magnified by more sale days in leap year 2012.
• The average provincial MLS® price scaled back 2.3% from January to a seasonally adjusted $502,100, which is within the range observed since May. While more than 10% below 2011 highs, average prices are highly volatile, and changes can reflect shifts in the geographic distribution of provincial sales as well as the impact of price outliers.
• February’s MLS® report suggests little momentum heading into the vaunted spring market. There are few indications that sales activity will accelerate over the next few months. Triggers of materially lower mortgage rates or rapid improvements in the economy are unlikely, and mortgage insurance policy will continue to temper entry-level demand.
• Markets are generally mired in excess inventory, which should precede price declines. However, further declines are expected to be modest. Sellers are generally in a position to be patient, given the persistence of low interest rates and steady employment, rather than sharply cut prices – which should limit supply growth.
• Sales are expected turn modestly higher over the next couple of months, but annual sales are forecast to remain essentially unchanged from 2012 at 68,000 units.
• Sales recorded through the Multiple Listing Service dropped 24%in February to 4,501 transactions compared with 5,895 a year ago. The provincial average price was $529,922 in February, down 8.1% from February 2012.
• For the first two months of 2013, B.C.’s sales have totaled 9,842, a 20% decline from the first two months of 2012.
• While new stricter mortgage qualification rules introduced last year crimped the buying power of first-time buyers, mortgage rates remain near historic lows, B.C. is still experiencing population growth and the economy is still seeing job creation, all of which should support a higher level of housing sales. (BCREA)
• Central 1 Credit Union is predicting a slow, weak recovery for real estate in British Columbia, saying it expects a flat market for both unit sales and prices for the next few years.

Calgary

• Total housing starts in the Calgary region fell by 33.4% in February compared with last year (CMHC).
• Single-detached starts of 486 were off by 0.8% while multi-family starts of 410 dropped by 52% compared with February 2012.
• Year-to-date, total starts in the region of 1,615 are down 24.2% from the same period in 2012. That’s a result of the multi-family sector being off by 32% (888 units). However, the single-detached market is up 12.2% to 927 starts this year.
• Year-to-date until March 25, there have been 4,677 MLS sales in the city, up 3.45% from the same period a year ago. The median price has risen by 5.88% to $396,000 and the average sale price has increased by 9.12% to $453,710. (Calgary Real Estate Board)
• Calgary led the country in February with the best annual price growth in the MLS Home Price Index, but the Calgary market followed a national trend of declining MLS sales in February, however, at a much lower pace. Nationally, sales were off nearly 16% from a year ago but they were down only 2% in Calgary. (CREA)
• CREA said price growth in Calgary was 8.0% year-over-year “marking some of the strongest price growth that city has seen since the spring of 2010.
• The average sale price in Calgary in February jumped by 8.2% to $438,755 but across the country it fell by 1.0% to $368,895. (CREA)
• Alberta was the only province in the country to experience year-over-year sales growth, as there were 4,512 MLS transactions during the month, up 0.8% from last year. The average sale price rose by 5.3% to $378,685.
• CREA released a forecast for the next two years and it predicted Alberta would have the best annual price growth in Canada in 2013 and 2014.
• Average sale prices are expected to rise 3.6% this year to $376,400 and by 3.9 % next year to $390,900 in the province.
• CREA predicted for Alberta an increase of 0.4% in sales this year to 60,600 units and another hike of 3.5% in 2014 to 62,700 transactions in the province.
• Between March 1-21, there were nine condo sales in Calgary in the price tag of $1 million-plus. The previous monthly sales record for the luxury condo market was seven in both October 2007 and June 2011. Last year was a record year in the luxury condo market with 36 sales for the entire year. (First Place Realty in Calgary)
• Proximity to amenities – an area’s accessibility – has become one of the key determinants of a residential property’s value. A neighbourhood’s ‘walkability’ to those amenities is becoming increasingly more important to potential homebuyers. (REIN)
• Between 2000 and 2012, the 10 communities that saw the largest spikes in average home prices were in the city’s core and surrounding neighbourhoods. Of these 10 neighbourhoods, the average home price increased between 205-260% – a result that the Calgary Real Estate Board says is directly linked to proximity to more amenities and an increase in alternate transportation options. However, overall Calgary was recently ranked the least walkable in a top 10 list of Canada’s biggest cities. Vancouver placed first with a score of 78 out of 100 while Calgary scored 48.
• 89% of people in the Alberta province, higher than the 84% national average, felt home ownership is a good investment. Buying intentions in Alberta dropped to 22% from 31% a year ago. (RBC)

Toronto

• The number of homes sold last month in the Toronto area was down about 15% from the same time last year…. The association says the average transaction price last month in the Greater Toronto Area was $510,580, up from $510,249 in February 2012.
• Toronto luxury homes lost their lustre in February, which contributed to a 15% decline in house sales across the GTA year over year. (Toronto Real Estate Board)
• Sales of homes over $2 million plummeted by 32.5% and dollar volumes slipped by 35.5% last month compared with February 2012.
• The average selling price of a GTA home was $510,580 last month, up just 2% from a year earlier.
• Resale condo transactions also took a serious hit, with sales down more than 20% across the GTA. Prices slide by 5% in the City of Toronto, but were up more than 4% in the 905 regions.
• Detached homes saw the biggest sales declines, next to resale condos, with transactions down 16% across the GTA, and almost 17% in the City of Toronto.
• Prices flatlined in the 416 regions for those coveted homes, with sale prices averaging $823,329. Detached home in the 905 areas sold for an average 3.4% more in February, compared to the same month last year, with prices averaging $582,777.

Immigration and Employment to hold housing steady

Overall Market

• In a report released this month, the federal agency said 62 per cent of households owned a home in 1981 and by 2006 this proportion had risen to 69 per cent.
• Over the past few months most markets have started to cool with sales down 17% nationally, following moves by Finance Minister Jim Flaherty and the banking regulator to tighten mortgage lending rules.
• One of the world’s leading debt rating agencies, Moody, downgraded five of Canada’s big banks due to exposure to over-leveraged consumers. Stock markets were not affected with shares continued on a winning streak that’s been going on more than six months.
• According to Boston Consulting, in China, the number of millionaires hit 1.4-million in 2011 from 1.2-million the year before. That number is expected to keep growing “strongly” in the coming years. Investors from mainland China tend to see Canada as one of the top destinations for real-estate investment, according to real estate services provider Colliers International.
• Canadian building permits fell 11.2% in December after a 14.5% decline in November. The biggest two-month drop fall since the data series started in 1989, and left the value of building permits 16.2% lower than a year earlier.
• Canada Mortgage and Housing Corp showed the housing market was even weaker than expected, there were 9,904 actual starts last month, compared with 13,038 in January 2012.
• Sales were up 1.3% in January from December, the Canadian Real Estate Association. The trade group for the country’s real estate agents said that compared with a year earlier actual sales for January, not seasonally adjusted, were down 5.2%.
• The number of newly listed homes rose 1.6% month over month in January, the first monthly increase since last September
• The International Monetary Fund, in its annual report on Canada, also said the country’s currency was between 5 and 15% higher than warranted by long-term economic fundamentals and estimated that Canadian home prices are overvalued by an average of 10 per cent and predicted an “adjustment” over the next five years
• CMHC forecasts the number of housing starts to range between 178,600 and 202,000 units in 2013, with a point forecast of 190,300 units. In 2014, there will between 171,200 and 217,000 units of housing started, with a point forecast of 194,100 units. The average MLS price is forecast to be between $356,500 and $378,500 in 2013 and between $363,800 and $390,800 in 2014. Housing construction activity will trend lower in the first half of 2013, before gaining more momentum by the end of the year as economic and employment growth remain supportive of the Canadian housing market.

Vancouver

• Home sales are forecast to increase this year and next, with average prices dropping slightly in 2013 and crawling higher in 2014: the British Columbia Real Estate Association. This latest forecast calls for a 5.6-per-cent increase in the number of sales in 2013 and a further 6.1-per-cent increase in 2014, after the number of sales fell 11.8 per cent in 2012.
• In Metro Vancouver, the number of sales in Vancouver fell nearly 23 per cent in 2012, but the BCREA expects they will pick up over the next two years with growth in both employment and immigration and a hold on low interest rates. The forecast calls for 75,830 units to be sold in 2014 in B.C., while the five-year average is 74,600 and the 10-year average is 86,800 units, BCREA said. The average residential price is expected to drop one per cent in the province to $510,000 in 2013, and edge up 0.6 per cent in 2014 to $513,500. Housing starts in the province will fall 3.5 per cent to 26,500 units in 2013, and go up 1.5 per cent to 26,900 units in 2014, the forecast said. The transition from the harmonized sales tax to the provincial sales tax may add a short-term boost to new homes sales this spring, the forecast said.

Calgary

• Calgary’s resale housing market had its best January for sales since 2008 as average prices also climbed to their highest level ever for the month.
• According to the Calgary Real Estate Board, total MLS sales in the city in January were 1,230, up 15.17 per cent from a year ago while the average sale price rose by 12.34 per cent cent to $439,671. The previous record high for the average sale price in any January was in 2008 at $413,271.
• Factors that influence the Calgary housing sector include: The growth within the energy sector is significant along with consumer confidence in the marketplace as well as steady economic performance.
• CREB noted the single-family home benchmark price jumped by 9.01 per cent to $436,900. It rose by 7.49 per cent in the condo apartment category to $251,300 and it was up by 4.85 per cent in the condo townhouse category to $283,400.
• There were 34 MLS sales in Calgary of properties over $1 million in January — just shy of the January record of 36 luxury sales in 2007. Calgary finished 2012 with an all-time record of 544 luxury home sales, eclipsing the previous mark of 458 in 2007.
• Calgary census metropolitan area will grow by 1.37 per cent this year to 27,000 units followed by another 2.59 per cent growth in 2014 to 27,700 transactions.
• The average sale price is expected to rise by 2.59 per cent this year to $423,000 and by another 2.6 per cent in 2014 to $434,000.
• According to the Calgary Real Estate Board, year-to-date until February 21, total MLS sales in the city of 2,498 are up 11.57 per cent compared with the same period last year and the average sale price has risen by 10.63 per cent to $448,635.

Toronto

• Urbanation Inc., one of the leading research companies in the condo industry, said overall the Toronto census metropolitan area was 79% sold in the fourth quarter of 2012, down from 80% a quarter earlier and 82% a year earlier. It is above the 10-year average of 78%. Resale activity in the condo market was down 14% in the fourth quarter for the lowest quarterly level in a decade but Urbanation said it was due to a lack of listing.
• As of last September, net migration in Ontario had fallen by 20 per cent year-over-year to below 60,000 new residents, says a CMHC. That’s the lowest levels of net migration since the late 1990s and about 40 per cent less than the 110,000 or so people who migrated to the province annually.
• New condo sales in Toronto fell 47 per cent in the last quarter of 2012, even as the number of units under construction hit an all-time high, according to data from market research firm Urbanation.
• There were 3,841 new condos sold in Toronto in the last three months of 2012, compared with 7,226 sales in the same period a year earlier.
• At the same time, the number of total condo units under construction in Toronto hit a record high of 56,866 in 2012. The number of construction starts also hit an all-time high, at 24,388.
• Urbanation reports the average selling price in Toronto in 2013 was $536, up 5.2 per cent from the year before. That would suggest condo prices may be falling because developers are building smaller units.
• The Toronto Real Estate Board (TREB) is reporting a strong start to 2013. Home sales were down just 1.3 per cent in January over a year earlier, welcome news after six months of largely double-digit decreases.