In: Real Estate News3 Sep 2007
As the summer season comes to a close, the property market has raked in strong figures across Canada, continuing to defy dire predictions by experts of a bubble about to burst. Indeed, June, July and August have seen some record-breaking numbers coast to coast, and average house prices are expected to rise a full 9.5% by year’s end with western Canada leading the way.
“The most profound story in Canadian real estate today is the extraordinary interest that people across our country continue to have in buying and selling homes,” Phil Soper, President of Royal Lepage told the CanWest News Service. “The sheer number of homes trading hands this year has far exceeded consensus expectation. This market continues to show strength as we move into the second half of the year.”
With all the good news, here’s a sampling of some of the activity from Atlantic to Pacific:
Parts of Newfoundland are receiving a great deal of interest from American buyers according to the Wall Street Journal, thanks to September 11 ironically enough. After planes were diverted to Gander, Newfoundland on that fateful day, residents warmly welcomed stranded travelers into their homes. These travelers have not forgotten their show of hospitality, and word has spread. Many Americans are now making their summer homes on the coastlines of Newfoundland, watching whales and icebergs make their way through the frigid Atlantic waters. Even Europeans are getting in on the act thanks to direct flights, and local realtors say that foreigners now make up 10% of real estate buyers, as compared with just 1% prior to 2001.
In Nova Scotia, the Chronicle Herald reported a recent study shows that real estate generates big numbers in indirect spending — more than $220 million per year. These numbers are even better in other parts of Canada, with a total of 94,000 jobs created and $15.3 billion in spin-off spending*.
*(An important caveat regarding these figures is needed. The study, commissioned by the Canadian Real Estate Association, looked at MLS sales only, and included real estate agent fees in their indirect spending assessment. If they were to include FSBO sales, the total revenues generated would be quite a bit higher, but would not include real estate agent fees – that money would go into the economy in other ways, i.e. any way you the seller choose.)
In Toronto, the Star reported July marked the fourth record-breaking month in a row for home resales with a 26% increase over the previous year. August seems poised to do just the same, according to the Toronto Real Estate Board, with sales in the Greater Toronto Area up 17% in the first half of August as compared to the same period in 2006. Nor is the cooler weather likely to cool the market, according to TREB President Donald Bentley, who says a ‘robust fall market’ could be expected.
Edmonton’s is one of the few markets in Canada showing signs of stabilizing, according to the Edmonton Journal after the frenzied rise of prices and new construction generated by the oil boom. Average home prices are leveling out, and surplus inventory is giving the buyer the upper hand. Experts predict that home sales will remain strong, but caution patience to sellers.
In British Columbia, however, the market and prices are well up despite projections of a slow-down according to the Vancouver Sun. Greater Vancouver and the Fraser Valley both posted some of their largest sales gains in July, which some experts attribute to buyers rushing into the market to take advantage of pre-approved mortgage rates, following interest rate hikes by the Bank of Canada. Vancouver’s July sales were up an extaordinary 41.8% over the same time last year, and housing prices in East Vancouver and Port Coquitlam rose a 10 and 13% respectively.
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