Home sweet homes
Derek Abma
Province
Canadians are snapping up homes, especially in Vancouver, where sales last month rose 75 per cent from a year earlies. __ ISTOCKPHOTO.COM
OTTAWA — Another real-estate organization is declaring an end to Canada‘s housing-market downturn.
Re/Max said yesterday a recent surge in housing sales, particularly in Canada‘s biggest cities, is “a clear signal that the housing sector has shifted into recovery mode.”
It supported its argument by citing resales in the Toronto and Vancouver regions last month, which were among the most robust levels ever seen. Toronto‘s sales of almost 11,000 units, up 27 per cent from a year earlier, set a new record for June. Vancouver‘s sales of almost 4,260 units were up more than 75 per cent from last year and just short of a new June record.
“While sales are the leading indicator, there are other clear signals that recovery is indeed under way,” Elton Ash, regional executive vice-president of Re/Max for Western Canada, said in a press release.
“Renewed consumer confidence, albeit cautious, has been key, supported by improved economic news.”
Ash also said there is a shrinking gap between sales prices and asking prices and, in a number of cases, the former is exceeding the latter.
Michael Polzler, Re/Max’s executive vice-president for Ontario and the Atlantic region, said: “Canadians believe in home ownership, a fact best illustrated by the purchasers who ventured forward in recent months and snapped up some of the best real-estate deals this market has seen in years.”
Re/Max said market conditions have become more balanced following a period in which buyers held the clear upper hand over sellers for a half-year or more. It said the current sales pace might be unsustainable, but nevertheless indicates more stability for the market in the longer term.
The Re/Max report follows one issued last week by one of its competitors, Royal LePage, that indicated Canada‘s housing real estate took a sharp turn to the positive in the second quarter of this year after a sluggish winter.
Also last week, RBC Economics said greater affordability — the result of lower house prices and falling mortgage rates — was luring homebuyers back into the market.
It said the overall cost to own a standard bungalow, including mortgage payment and utilities, had dropped by more than 10 per cent on average between last year’s fourth quarter and this year’s first quarter.
Douglas Porter, deputy chief economist for BMO Capital Markets, said it’s clear the Canadian housing market has taken strides forward since it was essentially “frozen over” late last year and in the early part of this year.
That compares favourably to the U.S. housing market, which has been in decline for three to four years.
Porter said the market south of the border has yet to show any clear signs of improvement as it has in Canada, and that reflects largely how much more severe the U.S. housing market has been.
“[The United States] just hasn’t had the quick snap-back that we’ve seen in Canada at all,” Porter said.
“I don’t believe our market ever got as overextended as the U.S. did. [The U.S.] basically had to go through a much deeper correction, which essentially fed on itself,” he added, explaining how that contributed to severe job-market losses, which in turn hurt the housing market even more.
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