Home sales hit record

By TAVIA GRANT

Thursday, September 15, 2005 Updated at 1:41 PM EDT

Globe and Mail Update

Canada's existing home sales rose 4.8 per cent to a record in August, the Canadian Real Estate Association said Thursday, spurred by low mortgage rates.

Home sales rose, with 30,114 transactions in the month, after a revised decline of 1.8 per cent in July.

Record activity occurred in Vancouver, Calgary, Winnipeg, Toronto, Ottawa, Montreal, Quebec City, Halifax and St. John's in August. Seasonally-adjusted sales also reached a high in Edmonton, Hamilton and Burlington.

Many economists see the housing market remaining strong in the months to come.

“Rates remain low, the job market is good and wages are growing, so things are still in place for these markets to remain fairly strong,” said Ted Carmichael, chief economist at J.P. Morgan, in an interview. “The only risk would be a significant rise in short-term interest rates and mortgage rates.”

While the Bank of Canada has indicated rates are headed higher, the increases are expected to be gradual. “For that reason, the housing sector will continue to be quite strong,” Mr. Carmichael said.

The unadjusted average price of resale homes in August was $262,609, up 10.9 per cent over a year ago.

Mr. Carmichael said he expects prices to continue to climb in Western Canada where record energy prices are propelling economic growth. In Ontario and Quebec, price growth could moderate as mortgage rates edge up and higher energy costs dampen demand.

Unit sales rose 17.6 per cent from a year ago and the dollar value of sales was up 30.5 per cent.

In the first eight months of the year, actual home sales were up 3.3 per cent from last year. Year-to-date sales activity was higher in Vancouver, Calgary, Edmonton, Saskatoon, Winnipeg, Kitchener-Waterloo, Montreal and Saint John, CREA said.

Sales of “luxury” homes, meantime, outpaced the growth of the overall market in most big Canadian cities in the first half of 2005, according to a separate report Thursday.

A Royal LePage Real Estate Services report released said sales of high-end homes increased more than 40 per cent, year-over-year, in the first two quarters of the year.

In oil-rich Calgary, luxury home sales tripled year-over-year during the period, with 110 units priced at $900,000 or more sold compared to 37 in the same period of 2004 — more than were sold in all of 2004.

Sales of Toronto homes priced at $1.5 million or more jumped 48 per cent, year-over-year, in the first six months of 2005 to a historical high of 288 units from 195 units in the year-earlier period, the report said.

In Vancouver, sales of homes priced at $1 million or more increased by 18 per cent for the first six months of the year to 739 units from 627 in 2004.

With files from Canadian Press.

Luxury home sales outpace market, realtor reports

FROM CANADIAN PRESS

Sales of "luxury" homes outpaced the growth of the overall market in most big Canadian cities in the first half of 2005, according to a Royal LePage Real Estate Services report released Thursday.

The report said sales of high-end homes increased more than 40 per cent, year-over-year, in the first two quarters of the year.

"Increased sales of larger and more luxurious homes reflect the underlying strength of the Canadian economy — one that has demonstrated a strong performance and resilience throughout 2005 despite the strength of the Canadian dollar," Phil Soper, CEO of Royal LePage Real Estate Services, said in a release.

"Through these purchases, many high-net-worth individuals are expressing their ongoing confidence in both the economy and housing investments."

In oil-rich Calgary, luxury home sales tripled year-over-year during the period, with 110 units priced at $900,000 or more sold compared to 37 in the same period of 2004 — more than were sold in all of 2004.

Sales of Toronto homes priced at $1.5 million or more jumped 48 per cent, year-over-year, in the first six months of 2005 to a historical high of 288 units from 195 units in the year-earlier period, the report said.

The upscale neighbourhoods of Rosedale, Forest Hill and the Bridle Path remain popular among buyers of luxury properties.

In Vancouver, sales of homes priced at $1 million or more increased by 18 per cent for the first six months of the year to 739 units from 627 in 2004.

Sales of properties in the high end of the market in Winnipeg — those at $300,000 or higher — more than doubled to 168 units from 81 in the first six months same period in 2004. Sales in that segment grew 52 per cent on average between 2002 and 2004 while the overall market average grew by just four per cent.

Luxury home sales in Ottawa declined seven per cent, with units going for $750,000 and up dropping to 40 in the first half of 2005 from 43 last year, the report found.

Homes priced at $400,000 and up in Halifax have experienced the highest average unit sales growth of all categories, increasing by 46 per cent per year on average between 1995 and 2004 while overall sales grew by four per cent, the report said.

In 2004, sales of homes in the category hit a historical high of 141 units. In the first six months of 2005, 95 units were sold.

Royal LePage provides franchise services to residential real estate brokerages, with a network of more than 11,000 agents and sales representatives in 600 locations across Canada operating under the Royal LePage, Johnston and Daniel, Trans-Action and Realty World banners.

Existing home sales set record

Existing home sales shattered a record in August, even as home prices continued to climb, the Canadian Real Estate Association said Thursday.

Prices rose at the fastest pace all year, CREA said. The national residential average price rose 11.9 per cent year-over-year to $246,222 in August and hit a record in British Columbia and Prince Edward Island.

This is the second time this year that new listings, as measured through the Multiple Listing Service, hit a record this year. Sales activity in the first eight months of this year is above the same period of 2004, the association said.

Sales rose 5.4 per cent in August from July to a seasonally-adjusted total of 43,444 homes. That's 3.1 per cent more than the previous national record for MLS sales for a single month, set in June, CREA said.

Sales broke all previous monthly records in New Brunswick, and reached their highest level on record for the month in British Columbia, Alberta, Manitoba, Ontario, Quebec, Nova Scotia, and Newfoundland and Labrador, the report said.

Seasonally adjusted new residential listings rose 4.1 per cent to 65,822 units in August from the previous month, their highest level since October, 1990.

Seasonally adjusted dollar volumes also hit a record, gaining 5.8 per cent to $10.9-billion in August.

"Sales remain on track to set a new national record in 2005," said CREA chief economist Gregory Klump. "Canada's resale housing market continues to be strong and is showing few signs of slowing down so far."

He does, however, see a 3-per-cent decline in next year's sales activity as both house prices and interest rates climb.

Amasing.
See in Winnipeg a luxury home is one considered over $300,000.
You couldn't get a house that cheaper within a 100km of Vancouver and in the city not even a doghouse under $500,000.

^ You must buck up, if you want to live in one hell of a city, not cheap.

You couldn't get a house ... within a 100km of Vancouver and in the city not even a doghouse under $500,000.

^^ A good one, ssiguy! :hahaha:

So far I had only been thinking in terms of garages. ;)

Does it seem tempting to you sometimes to move from a million plus $ place to a less pretentios one that would give you 5 times the space & amenities at less than half the cost of your current setup?

Does it seem tempting to you sometimes to move from a million plus $ place to a less pretentios one that would give you 5 times the space & amenities at less than half the cost of your current setup?
Where amenities are pleasent or agreeable conditions, I would say that the city outside of my own lot are far more important than what I could hoard inside a house.

"You couldn't get a house that cheaper within a 100km of Vancouver and in the city not even a doghouse under $500,000."

i have many friends in van who have nice houses for less than that. Houses with the "east" designation are far far cheaper and not necessarily in ghettos by any means.

^^ Too bad the prices in this hidden gem are soaring too now.

House prices still soaring

CANADIAN PRESS

The Canadian housing market continues to defy expectations of a price slowdown, propped up by a solid economy and low interest rates.

Royal LePage Real Estate Services reported today that average prices kept heating up during the summer despite swelling numbers of homes for sale in many markets.

The average price of a standard bungalow was up 7.4 per cent from a year earlier at $265,405, the report said, while the national average price of a condominium increased 6.8 per cent to $185,195 and a standard two-storey home cost 6.7 per cent more at $324,066.

Sales activity remained strong across the country through the usually slack summer months, Royal LePage added, reporting a record volume of August sales.

Victoria showed the steepest price increases and overall the gains were skewed toward Western Canada, where high energy prices have lifted the economy and kept inventory tight.

Growth was slower in markets east of Manitoba, aside from New Brunswick, which saw double-digit gains.

Overall, Canada's housing market continues to defy expectations: at the start of the year Royal LePage, the country's biggest franchiser of residential real estate brokerages with over 11,000 agents, was forecasting an average price increase of 4.5 per cent for 2005.

"For two years running the strength of this expansion has exceeded our expectations," Phil Soper, president and CEO of Royal LePage, said in an interview.

The reasons are "the continuing strength of the underlying economy" and "while interest rates have risen, they came later in the cycle than we thought they were going to, and the impact of the interest-rate increases has been less than expected."

That said, Soper added that "the trend, I think, is still there," and this year's rate of price appreciation will be less than last year's.

"We are gradually slowing, and the major markets are certainly the ones we're seeing that in - Toronto and Montreal in particular."

Royal LePage noted a softening in Toronto, Montreal and Vancouver ``as a greater supply of inventory moderated price increases."

This was most evident in the hyperactive Toronto condominium sector, "where the availability of a high number of new units has begun to temper price gains."

Victoria continued to lead the country in price appreciation for the third consecutive quarter. Its condominiums were up 31 per cent year-over-year to an average $220,000 "as the city's fair weather and scenic views continue to attract baby boomers looking toward retirement."

There also were double-digit percentage gains in Saint John and Moncton in New Brunswick, as well as in Winnipeg.

Soper said he sees "little evidence" of a price bubble in any Canadian market.

"What is remarkable is the length of time that this expansion has covered, over five years, rather than size of the year-over-year price increases," he said.

"The key element of this particular expansion is that it is so national: from regions of the country like New Brunswick, where economic growth is steady but unspectacular, to Alberta, with its energy-stoked economy, the real estate market is expanding."

What he described as one of the broadest price expansions of modern times is driven by "a confident Canadian consumer, who is at work and who views investment in real estate as a key element in how they're going to live their lives."

However, a rising inventory of homes for sale is a worrying sign, warned David Rosenberg, chief North American economist for Merrill Lynch, who long has been sounding the alarm about a housing bubble in the United States.

"We are now beginning to see early signs of a changed complexion in residential real estate, and as has happened at the tail end of every bubble in the past, what does them in during the last phase is the unintended inventory buildup as supply ramps up faster than demand," Rosenberg wrote in a commentary.

"As sure as night follows day, pricing will follow this inventory overhang; in fact, this process may already be in motion."

Among the report's findings for the quarter:

In Toronto, a detached bungalow rose 6.4 per cent to $364,111 and a standard two-storey by 4.8 per cent to $459,250.

In Vancouver, a detached bungalow rose 8.8 per cent to $499,667 and a standard two-storey by 9.7 per cent to $529,500.

In Montreal, a detached bungalow rose five per cent to $203,688 and a standard two-storey by 4.9 per cent to $316,185.

In Moncton, the average price of a detached bungalow rose 18.7 per cent year-over-year to $127,000 and a standard two-storey by 12.8 per cent to $123,000.

In St. John's, the average price of a detached bungalow rose seven per cent to $142,667 and a standard two-storey by 6.1 per cent to $202,333.

In Saskatchewan, a detached bungalow rose 8.2 per cent to $156,083 and a standard two-storey by 7.5 per cent to $166,500.

In Calgary, a detached bungalow rose 7.9 per cent to $252,411 and a standard two-storey by 8.8 per cent to $264,389.

In Victoria, a detached bungalow rose 18.4 per cent to $348,000 and a standard two-storey by 20.3 per cent to $391,000.

Royal LePage (TSX: RSF.UN) is Canada's leading provider of franchise services to residential real estate brokerages, with a network of more than 11,000 agents and sales representatives in 600 locations operating under the Royal LePage, Johnston and Daniel, Trans-Action and Realty World brands.

Average bungalow price hits $500,000
Cozy character comes with a price

http://img208.imageshack.us/img208/1926/98444327733tg.jpg

CREDIT: Glenn Baglo, Vancouver Sun
This 93-year-old 'character bungalow' at 1807 East Seventh Ave. in Vancouver is priced at $499,000.

Derrick Penner
Vancouver Sun

October 4, 2005

The average price for a Vancouver bungalow hit almost $500,000 in the third quarter of 2005, showing one of the stronger gains in value across B.C., Royal LePage Real Estate said Monday.

Royal LePage's third-quarter housing price survey shows that the price of the average Vancouver bungalow rose 8.8 per cent, year over year, to reach $499,667.

Average, according to Multiple Listing Service listings, translates to the cosy, 1,615 square-foot "character bungalow" at 1807 East Seventh Ave., priced at $499,000. The 93-year-old house near Commercial Drive boasts three bedrooms, two bathrooms and a remodelled kitchen, as well as a full basement and "mortgage helper."

Bill Binnie, president of Royal LePage North Shore, said that with population growth, mortgage rates at historic lows, wages rising, and a low inventory of listings, "the market shouldn't be surprising us."

"It just makes basic sense that if you've got a city that's growing, you're going to have more sales," Binnie said. "And we are a city that is growing in population."

He added that new buyers coming to Vancouver are picking from a limited supply. While listings have increased "marginally" compared with last year, Binnie said that in past years, the market has had two times the number of homes there are today.

The Royal LePage report said that Victoria led the country in price appreciation for the third quarter in a row, with the average price for a bungalow spiking up 18.4 per cent to $348,000. A standard two-storey house in the city rose even faster, showing a 20.3-per-cent price gain at $391,000.

Vancouver, however, remained the most expensive. Regionally, the average bungalow on the city's west side hit $775,000, topping even West Vancouver, which saw the average bungalow go up 6.9 per cent to $695,000.

The average condominium price in Vancouver went up 14.1 per cent, year over year, to reach $254,333, the report said.

Affordability is "not a huge question," according to Binnie, particularly in Vancouver, because it is a comparatively expensive part of Greater Vancouver where homeowners typically are buying and selling using equity that they've built up in properties they already own.

For a professional couple who bought a $300,000 home 15 years ago, have almost paid down their mortgage, and seen $300,000 to $400,000 in appreciation in its value, Binnie said, "a $1-million home is not out of reach."

The condominium market, he added, is a "price-point market [where] a lot of first-time buyers are finding their entry point into the market."

Victoria led the nation in price appreciation for the third quarter in a row with the average price for a bungalow shooting up 18.4 per cent to $348,000, the Royal LePage report said.

Judy Gage, president of Royal LePage Coast Capital Realty in Victoria, said most buyers in the city are Victoria residents who are "moving up, moving down, moving laterally," but a large number of newcomers from Alberta and the U.S., particularly the south, are also moving in.

For people moving in, she added, "prices compare favourably . . . with oceanfront cities elsewhere."

Prices in Greater Vancouver and Victoria are rising faster than the income growth of buyers, said Carol Frketich, regional economist for Canada Mortgage and Housing Corp., but the separation is "not as out- of-line as it has been in the past."

Frketich added that between 2000 and 2004, the growth in housing prices outpaced income growth by about two percentage points.

However, during the early 1990s, that margin was eight percentage points.

Frketich noted that price increases over 2005 have been slower than during the previous two years, indicating a possible slowing of the rise, "which would be healthy."

She added that the fundamentals to support growth in the housing market -- population growth, income growth and low interest rates -- are still present, and could drive demand into 2007.

However, Frketich expects that new listings will increase in the coming months, which, combined with the completion of many new construction projects, should help ease current restrictions in supply that are putting pressure on prices.

Peter Simpson, CEO of the Greater Vancouver Home Builders' Association, said the current situation of rising prices is still "a good news, bad news story," depending on whether market participants own property or are trying to make their first purchase.

"If you're in the market looking for a house, and it's your first time in the market, it is frightening," Simpson said. "And have told us that. But if you're already in the market and own a house, you're celebrating."

[B]Nationally, the average price of a standard bungalow experienced the highest appreciation in the third quarter of the year, rising by 7.4 per cent from a year earlier to $265,405, followed by a standard condominium, which increased 6.8 per cent to $185,195, Royal LePage Real Estate Services said.

Most of the major price increases were in western Canada where high oil and gas prices have resulted in a booming economy and where the relative number of homes for sale was lowest, it said.

depenner@png.canwest.com

BUNGALOWS BY AREA*:

Surrey

$319,000

+8.1%

Richmond

$355,000

+3.2%

North Delta

$275,000

+3.4%

North Vancouver

$495,000

+10%

West Vancouver

$695,000

+6.9%

*Average selling price during the third-quarter of 2005, with year-on-year appreciation

Source: Royal LePage, Vancouver Sun

Ran with fact box "Bungalows by Area", which has beenappended to the end of the story.

Housing Starts Jump

By TAVIA GRANT

Tuesday, October 11, 2005 Posted at 2:16 PM EDT

Globe and Mail Update

Housing starts rose to 230,500 in September, topping expectations and showing activity hasn't yet slowed in Canada's red-hot real-estate market.

The seasonally adjusted annual rate of housing starts rose from 206,200 units in August, Canada Mortgage and Housing Corp. said Tuesday. Analysts had expected 220,000 starts for the month.

The report comes a week after Statistics Canada said building permits soared 10.2 per cent to a record in August. But with expectations of higher interest rates on the horizon, activity will likely slow next year, said Andrew Pyle, senior financial markets economist at Scotia Capital Inc.

“With interest rates pushing higher and growth expected to moderate under the weight of further Canadian dollar strength, the outlook for starts is not positive into 2006,” he said in a note Tuesday.

Multiple starts led September's gains. The seasonally adjusted annual rate of urban starts rose 13.8 per cent as multiple starts rose 17.8 per cent, while single starts were up 9.9 per cent from August.

“The stronger performance of multiple starts compared to single starts is the result of rising house prices which can shift demand toward less expensive multi-family homes,” CMHC said, adding that multiple starts are poised to outnumber single starts in 2005 for the first time since 1982.

In the first nine months of this year, urban starts were 4.7 per cent lower than in the same period of 2004. Year-to-date single starts decreased 10.1 per cent, while multiple starts increased 1.1 per cent from last year, CMHC said.

“Housing starts across Canada remain strong and are on track with our expectations for the year,” said Bob Dugan, CMHC's chief economist. “Low mortgage rates and increasing full-time employment in recent years are continuing to fuel high levels of housing starts in 2005.”

Urban housing starts were up across all regions except for the Atlantic in September. Housing starts were up 19.8 per cent in the Prairies, 17.9 per cent in Quebec, 12.7 per cent in Ontario and 11.4 per cent in British Columbia. In the Atlantic region, the seasonally adjusted annual rate of urban starts fell 11.6 per cent.

Rural starts in September were estimated at a seasonally adjusted annual rate of 30,700 units.

In a separate report, Statistics Canada said the boom in commercial, institutional and industrial building hit an all-time high of $7.9-billion in the third quarter of this year, up 3.8 per cent from the second quarter.

Industrial building rose 10.3 per cent to $1.4-billion, the commercial sector was up three per cent to $4.4-billion, and institutional building rose 1.4 per cent to $2.1-billion.

All provinces saw increased third-quarter investment, but activity was particularly intense in British Columbia and Alberta, and the Atlantic provinces closed on a high note.

For the first time in eight quarters, the four Atlantic provinces posted simultaneous increases, led by New Brunswick.

On the city side, Vancouver posted the highest rate of growth for the third straight quarter, surging 11 per cent, and Toronto showed the most significant decline, falling 1.6 per cent.

With files from Canadian Press.

Immigrants, echo kids, fuel housing market

By JILL MAHONEY AND HEATHER SCOFFIELD

Tuesday, October 18, 2005 Posted at 9:39 PM EDT

From Wednesday's Globe and Mail

It was the culmination of a long-standing dream. Earlier this year, Basant Singh and his wife Manjit Brar traded in their cramped basement apartment for a spacious four-bedroom house.

Their home in the Toronto suburb of Brampton gives the couple, who are from India, what their former residence could not: independence, bright sunlight, space for a big television and room for their 11-year-old son to wrestle, play soccer and have sleepovers.

“We are feeling really, really free,” said Mr. Singh, who owns a small construction company. “It's like a dream.” Mr. Singh, 39, who came to Canada in 1992, bought the home for $360,000 in May because he and his wife, 35, were eager to build equity and put down roots.

Newcomers to Canada like the Brampton couple are, in part, fuelling the country's housing boom as they move from renting to owning, according to a new Statistics Canada report.

Most observers credit the long stretch of low interest rates for the housing boom of the past few years.

But the report shows that to fully explain the boom, you need to look at who is living inside those houses.

For the past decade, the housing market has been kept afloat by a growing number of young people, a growing number of old people, a surge of immigrants, and more single people and divorcees who want to live on their own, the Statscan survey shows.

“These people are out there buying as soon as they can,” said Derrick Thomas, author of the article released Tuesday and a senior analyst at Statscan. “Almost everybody wants to buy a home.”

The early members of the “echo” generation — children of the baby boom, born in the 1980s and early 1990s — can be credited with part of the hot housing market, the paper says. This generation is large and growing, and now numbers about three million, or one in 10 Canadians.

This group of young people often rents housing, but because of its sheer size, the echo generation is sustaining the rental market, pushing up rents. This, in turn, has made buying more attractive. Plus, since mortgage rates are low, this group has a higher probability of buying a house than any other age group, Mr. Thomas said.

At the other end of the age spectrum, older people are staying in their houses longer. Now, since they're healthier and living longer, they are not selling their houses in favour of renting or moving into an institution.

Also, since people are getting married later in life, and divorce rates are higher than in past decades, single people are abundant, and wanting to buy homes, the study shows.

“In short, Canadians have been spreading themselves over more housing units,” it says.

The average size of a household in 1961 was 3.9 people, but that dropped to 2.6 people in 2001. The study is based on data from Statscan's survey of household spending from 1997 to 2003.

In cities, newcomers to Canada have been a driving force in the housing market. Immigrants typically arrive as young families and settle in cities.

“Their impact on the housing market is rapid and direct,” the study says.

In 2000, more than 40 per cent of households that had arrived in the previous five years lived in a home owned by a family member, according to census data.

That newcomers are driving the housing market is no surprise to immigration lawyer Max Berger, who sees a “growing degree of affluence” in his Toronto clientele. But home ownership is not limited to well-heeled immigrants. Former clients he represented as refugee claimants have gone on to find work and eventually buy homes, a process that can take about a decade, he said.

“They really had nothing, but through hard work and perseverance they've accumulated enough money for a deposit on a home and are able to arrange a mortgage and they're off to the races,” he said.

But just as low interest rates don't tell the whole story of the housing boom, neither do demographics. They go hand in hand.

Each percentage point drop of interest rates between 1997 and 2004 lured about 16,000 additional home buyers into the market, Statscan data show.

The huge demand for housing in the early part of the decade, however, has driven up prices. And now that rates are on the rise, it's not clear that demographics alone can sustain the housing boom.

Immigrants will continue to arrive, the baby boom echo is still large, and old people are still living longer. But the housing market is riskier now, especially at the high end, as other investments begin to look more attractive, Mr. Thomas said.