t was only a few weeks ago that Vancouver realtor Pamela Allen noticed a welcome shift in the market – she began to see bidding wars on resale homes.
“My last three buyers, all three lost their offer because they were in a bidding war,” the Re/Max agent said in an interview, adding she has been busier than she has been in months.
“Anything up to $600,000 is flying off the shelves,” she said.
Ms. Allen's experience is markedly different from as recently as January, when sales in Vancouver were down 59 per cent from a year earlier. Indeed, prices have dropped, and May sales in Vancouver were 17 per cent above May, 2008, for the first year-over-year gains in months.
Canada's real estate market is clearly on the path to recovery, economists say, citing recent data as evidence that the worst of the slump may be over.
“You're seeing people beginning to kick those tires again in the housing market,” said BMO Nesbitt Burns senior economist Michael Gregory.
Many local real estate boards are, for the fourth month in a row, reporting strong sales in May, compared with the previous month.
Observers are watching for a national report on May sales expected today from the Canadian Real Estate Association.
National sales have been rising month over month since February, and in April, for example, sales on a monthly basis jumped 11.2 per cent, seasonally adjusted.
The national market has yet to eke out a year-over-year gain. But economists expect that to change within the next couple of months.
“If you don't get it into positive territory in May, it probably will in June,” said Bank of Nova Scotia senior economist Adrienne Warren.
When it does happen, it will mark a sharp rebound from January, when sales were at their lowest point in 10 years.
“The worst of Canada's recession occurred through December and January of this year,” Mr. Gregory said. “Things were looking really bleak. It caused people to be cautious.”
Now, thanks to low mortgage interest rates and a slide in prices, buyers are more confident, he added.
Most activity is among first-time buyers at the more affordable end of the market, Ms. Warren said. In Calgary, for example, 70 per cent of resales in May were on homes priced under $400,000.
“First-time buyers are coming in to take advantage of the ultra-low interest rates we're seeing right now,” Ms. Warren said.
The recent growth is due partly to pent-up demand from the end of last year, and observers said this could level off over the summer once that delayed activity has been satisfied, and as rising unemployment continues to temper consumer activity.
“The worst is over,” Mr. Gregory said. “But will the recovery be strong and robust? The jury's still out on that one.”
Saturday, June 20, 2009
Canadian home resale prices rise to record in May
TORONTO, June 15 (Reuters) - Resale prices for Canadian homes rose to their highest average on record in May, while sales activity climbed for a fourth straight month as consumer confidence strengthened, according to an industry report released on Monday.
But rebounding sales in some of the most expensive markets skewed the national average, the Canadian Real Estate Association said in the report.
The average home price last month rose 0.4 percent to C$319,757 ($282,971), topping the previous record set a year ago. It was the first year-over-year increase since May last year.
The average price has recovered 16.4 percent from the low reached in January, CREA said.
Home sales rose 8 percent to 37,649 units in May from April, the fourth consecutive monthly increase on a seasonally adjusted basis. Nationally, 49,521 units changed hands in May, down 0.8 percent from a year ago.
"New records were posted in only 15 percent of local markets in May, none of which are among the most active or expensive," CREA said.
"The strong rebound in sales activity, not price, in Canada's most expensive markets is driving up average prices nationally and in some provinces, just as a sharp decline in activity in these markets pushed average prices lower in late 2008."
Of the 25 major markets that CREA tracks, 14 reported rises in unit sales year-over-year, with five markets, mostly in the western provinces of Alberta and British Columbia, posting double-digit increases.
Prices rose in 14 markets, led by a 17.3 percent increase in Newfoundland and Labrador and a 12.1 percent climb in Saint John, New Brunswick.
($1=$1.13 Canadian) (Reporting by Ka Yan Ng; Editing by Frank McGurty)
But rebounding sales in some of the most expensive markets skewed the national average, the Canadian Real Estate Association said in the report.
The average home price last month rose 0.4 percent to C$319,757 ($282,971), topping the previous record set a year ago. It was the first year-over-year increase since May last year.
The average price has recovered 16.4 percent from the low reached in January, CREA said.
Home sales rose 8 percent to 37,649 units in May from April, the fourth consecutive monthly increase on a seasonally adjusted basis. Nationally, 49,521 units changed hands in May, down 0.8 percent from a year ago.
"New records were posted in only 15 percent of local markets in May, none of which are among the most active or expensive," CREA said.
"The strong rebound in sales activity, not price, in Canada's most expensive markets is driving up average prices nationally and in some provinces, just as a sharp decline in activity in these markets pushed average prices lower in late 2008."
Of the 25 major markets that CREA tracks, 14 reported rises in unit sales year-over-year, with five markets, mostly in the western provinces of Alberta and British Columbia, posting double-digit increases.
Prices rose in 14 markets, led by a 17.3 percent increase in Newfoundland and Labrador and a 12.1 percent climb in Saint John, New Brunswick.
($1=$1.13 Canadian) (Reporting by Ka Yan Ng; Editing by Frank McGurty)
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