The Canadian real estate market is following the footsteps of it’s cousins to the south with steep declines in sales and property values. Sales dropped 17.1 percent in 2008 and the Canadian Real Estate Association is predicting a further drop of 16.9 percent in 2009.
Now this does make sense. Canadian real estate bubbled up slightly later than it did in the United States as a strong Canadian dollar and high oil prices created a housing boom throughout the country.
Now it looks like the market is coming back to earth.
House starts dropped 11 percent in January from December to a seasonally adjusted annualized rate of 153,500 units from 172,200 in December, Canada Mortgage and Housing Corp said.
That was was below the average expectations of analysts for 169,000 starts. The December figure was revised lower from 177,300 units reported last month.
‘The Canadian housing correction is in full swing, having a wide impact across the country,’ said economist Robert Kavcic at BMO Capital Markets Economics. ‘With sales activity showing no sign of life, residential construction will be under pressure for most of 2009.’ via Forbes.com.
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Here’s an update for our cousins to the south.
TORONTO, June 3, 2009 – In May 2009, Greater Toronto REALTORS® reported 9,589 sales, up almost two per cent from May 2008 – the first annual increase since December 2007. The seasonally adjusted annual rate of sales in May was 81,301.
“The resale housing market in the GTA has remained resilient in the face of challenging times globally,” according to TREB President Maureen O’Neill. “Many home buyers have taken advantage of extremely low mortgage rates.”
The average price for May transactions was $395,609 – down less than one per cent compared to the same month last year.
“The average resale home price has moved in line with last year’s level because of tighter market conditions experienced this Spring,” stated Jason Mercer, TREB’s Senior Manager of Market Analysis. “Home sales have increased strongly relative to new listings, bolstering home prices.”
While we may share a media, the sour news from the talking heads on TV is endless, but the market seems to defy their “sage advice”.
Interest rates are at an all time low and buyers are still buying. Some say its foolishness, but the mortgage portfolio losses in Canada are at 1% Far from the walk away numbers of the United States.
Buyers and Sellers are deciding with their feet at the sales centers and ultimately with their cheque books.
David Pylyp
http://sellingintoronto.ca
great tips. I enjoyed reading this
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