(Surrey, BC) – Sales processed on the Fraser Valley Real Estate Board’s Multiple Listing Service (MLS®) increased by 23 per cent in one month going from 1,477 sales in May to 1,815 in June. June’s numbers represent an 8 per cent decrease compared to the 1,982 sales during the same month last year.

Deanna Horn, president of the Board, says, “Historically, it’s not unusual for June sales to outperform May in the Fraser Valley. This has happened in nine of the last twenty years.

“However, a 23 per cent increase in one month is significant. We were busier than expected and it could be due to the combined effect of mortgage rates edging down, the Harmonized Sales Tax coming into effect July 1, as well as the tremendous selection of homes available in the Fraser Valley.

“Although we’re seeing a decrease in the number of new properties coming on stream, June buyers have only had this volume of homes to choose from two other times in our history, in 1995 and 2008.”

The total active inventory on Fraser Valley’s MLS® at month’s end was 11,110, 19 per cent more than was available in June 2009. The Board’s MLS® received 9 per cent fewer new listings in June compared to May, good news according to Horn.

“Listings typically do decrease in the summer, which will continue to stabilize the market.

“Over the last few months, we’ve seen residential benchmark prices leveling. Year-over-year, price increases may still appear dramatic depending on the property type and location because at this time last year, we hadn’t yet begun our recovery phase.

“In a stabilizing market, consumers know to rely on the expertise of a REALTOR® because prices are highly local and competitive.”

In June, the benchmark price for Fraser Valley detached homes was $518,355, a 9.9 per cent increase compared to $471,788 in June 2009.   

The benchmark price of Fraser Valley townhouses in June was $328,080, a 9 per cent increase compared to $301,103 in June 2009.  The benchmark price of apartments increased by 6.6 per cent year-over-year going from $231,014 in June 2009 to $246,351 in June 2010.  

By Steve Ladurantaye Globe and Mail Update

Association that represents the country's agents disputes reports suggesting house prices set for big drop

There will be no drastic drop in Canadian housing prices, the Canadian Real Estate Association said Thursday, because house prices will stabilize and climbing household income will make owning a home more affordable.

Responding to reports from some of the country's largest banks that prices could see drops of as much as 10 per cent in the next two years as higher mortgage rates and rising prices make housing more expensive, the association said the naysayers are ignoring the cyclical nature of Canada's real estate market.

"The relationship between average price and income has recently been cited as portending a U.S.-style correction in Canadian home prices," said the association's chief economist Gregory Klump. "However, such warnings ignore the longer-term relationship between prices and income, and disregard typical Canadian housing market cycle dynamics."

The housing market has been key to Canada's recovery, with average prices up 23 per cent from their recessionary lows at the end of April. The average price of a home at the end of April was $344,968, the highest on record and 7 per cent higher than before the recession.

In a report Tuesday, CIBC economist Benjamin Tal said his analysis showed that 17 per cent of Canadian homes had overshot their "fair value" by as much as 14 per cent by the end of April. He said there wasn't the imminent threat of a crash, but warned prices could drift as much as 10 per cent lower in the next two years as more supply comes onto the market.

"The house market is overshooting, that's a given," he said in an interview. "The market is already responding, supply is increasing very quickly and the market is correction itself. That is much different than a panicked crash."

TD Bank recently suggested prices could fall by 2.7 per cent in 2011. The Canadian Real Estate Association's own forecast suggests a decline of 1.5 per cent by the end of next year. Only the Canada Mortgage and Housing Corp. calls for higher prices in 2011, with an anticipated gain of 1.3 per cent.

However, Mr. Klump said worries have been blown out of proportion because Canada's market has always been characterized by periods of sharp growth followed by periods of relative inactivity. By contrast, he said, incomes tend to climb over time giving home owners a chance to catch up to higher prices.

"The Canadian housing market is now widely thought to be at, or very near, the top of a cycle, and the ratio of home prices to incomes is currently high. This ratio will revert to its long-term average as it always does as part of a normal housing market cycle," he said.

"History suggests, however, that it will not do so by means of a significant correction in home prices. The more likely scenario is that home prices will stabilize, giving incomes a chance to catch up again."

The association - which represents about 100,000 real estate agents, provided a list of reasons it believes a sharp correction is unlikely:

- The "vast majority" of Canadians have mortgages they can afford;

- Sixty-six per cent of mortgages have terms of at least five years;

- A "substantial" percentage of mortgage holders have switched to fixed rate mortgages to avoid interest rate sensitivity. Those with variable-rate mortgages "tend" to have higher incomes;

- Over the past 12 months, most new mortgages (64 per cent) have amortization periods of 25 years or less. This is an increase compared to 54 per cent one year ago;

- Twenty five per cent of mortgage holders recently increased their home equity via lump sum payments against the principal and/or by increasing the amount of their mortgage payments above their scheduled payment;

- Most mortgage holders (77 per cent) have a home equity position of at least 25 per cent;

- Job losses incurred during the recent recession "are the primary cause of the recent rise in mortgage arrears. With employment having stabilized, the arrears rate has likely reached its cyclical peak."

"Canada is widely believed to soon enter a typical demand-driven housing downturn due to recent price increases and an expected rise in interest rates. While an unexpected spike in interest rates is always possible, rates are most likely to rise at a measured pace during a new era of fiscal restraint," Mr. Klump said.

"Canada's solid mortgage market trends, conservative lending practices, and prudent borrowing by home buyers means that Canada will avoid a U.S.-style housing price correction."

Steve Ladurantaye

Globe and Mail Update

Published on Wednesday, May. 19, 2010 11:23AM EDT

Last updated on Wednesday, May. 19, 2010 1:31PM EDT

House prices will increase this year and next despite the challenges posed by higher mortgage rates, Canada Mortgage and Housing Corp. said Wednesday.

An “improved balance between demand and supply” will stabilize prices through the rest of this year, it said in its second quarter Housing Market Outlook. Prices will “rise modestly” in 2011, it said.

The agency, which insures almost $500-million of Canadian mortgages, said the average cost for a home by the end of 2011 should be $350,000. That would be a gain of 1.4 per cent over April’s record high of $344,968.

Forecasting higher prices next year puts it at odds with both the Canadian Real Estate Association and Toronto-Dominion Bank, which are calling for prices to drop by 1.5 per cent and 2.7 per cent respectively in 2011.

“It all comes down to the economy and what we’ve seen so far this year is a strong end to 2009 and through 2010 we’ve seen some effects from various fiscal measures,” said senior economist Bill Clark. “There was a big April gain in employment, and as the economy gets moving again people become more interested in housing.”

While prices have rebounded strongly from the recession, economists have warned that higher mortgage rates and tougher qualification guidelines could price would-be homeowners out of the market in the second half of this year.

While prices were up some 12 per cent year-over-year in April, the number of listings increased by 100,000 units and helped temper the frantic market. Sales slipped 2.6 per cent, the third time in four months they declined. CMHC attributed much of the sales activity in the first half of the year to pent-up demand, as buyers returned to the market after sitting out during the recession.

“Once this demand is exhausted, and as mortgage rates gradually rise, the pace of activity in the resale market will ease,” said CMHC economist Bob Dugan.

CMHC forecast that between 484,000 to 513,300 houses will sell in 2010, and then slide back slightly in 2011 to between 443,500 to 504,900.

The agency also said that after building 149,081 units in 2009, builders should construct between 166,900 to 199,600 units in 2010. In 2011, it said housing starts would hit between 148,600 to 208,800 units.

“Canadian housing markets have recovered from the low levels posted in early 2009,” said Mr. Dugan. “Moving forward, housing starts will moderate as activity becomes more in-line with long term demographic fundamentals.”

It has been difficult to accurately make forecasts on the housing market through the recession, however. Its forecast for 2009 housing starts was off by 19.4 per cent. The agency was only off by 1.5 per cent the prior year, and its goal is to always be within 10 per cent of the actual figures.

“For the first time in several years, our forecast accuracy was not within the 10 per cent range because of volatile market conditions,” it said.

To read more, visit http://www.theglobeandmail.com/report-on-business/economy/house-prices-to-rise-modestly-cmhc/article1574201/

As was seen in the Lower Mainland, British Columbia as a whole saw April real estate sales dramatically higher than a year ago, but off the frenetic pace seen in the last quarter of 2009, the B.C. Real Estate Association reported Friday.

B.C. realtors processed some 8,385 units through the Multiple Listing Service in April, 21-per-cent higher than the same month a year ago, but when figures are adjusted to account for seasonality April sales were four per cent below March, according to Cameron Muir, the association's chief economist.

"Higher home prices, particularly in Vancouver, the Fraser Valley and Victoria as well as a recent lift in mortgage interest rates has eroded affordability and had an impact on overall housing demand," Muir said in a news release.

The average home price across the province was $514,820 in April, some 15 per cent higher than the same month a year ago.

For the year to date, residential sales totaled 26,669 units at the end of April, up 47 per cent from the same point a year ago, and the total value of properties sold came to $13.5 billion, some 73-per-cent higher than for the same months of 2009.

depenner@vancouversun.com

Copyright (c) The Vancouver Sun

Read more: http://www.vancouversun.com/

OTTAWA - Prices for new homes in Canada rose 0.3 per cent in March, following a 0.1 per cent increase the previous month and extending gains that began in July 2009, Statistics Canada reported Wednesday.

The March increase was in line with economists' forecasts.

Statistics Canada said its new house price index was also up 1.6 per cent in March from a year earlier, compared with an annual increase of 0.9 per cent in February. "The growth in March was mostly due to higher prices in Vancouver," the federal agency said.

The new housing price index measures changes over time in the selling prices of new houses.

Higher material costs helped boost the index in Montreal and the Ontario cities of Kitchener and London, where prices saw the biggest month-to-month jump.

In Charlottetown and Hamilton, which saw the biggest decreases between March and February, "some builders negotiated lower selling prices," Statistics Canada said.

Of the 21 metropolitan regions included in the index, the agency reported that Victoria, Edmonton and Charlottetown were the only ones to report year-over-year declines.

The report notes that the introduction of a harmonized sales tax on July 1 in Ontario and British Columbia could bring the index down in those provinces during the tax's implementation period.

On Monday, Canada Mortgage and Housing Corp. reported that home construction rose 1.3 per cent in April as Canada's real estate market continued to show signs of recovery.

Housing starts were up by a seasonally adjusted annual rate of 201,700 units last month, up from a revised 199,200 units in March.

Canwest News Service

New housing price index for March

(per cent change m/m y/y):

Canada 0.3 1.6

House only 0.5 2.9

Land only -0.4 -1.1

Source: Statistics Canada

New housing price index for March

(per cent change m/m y/y):

St. John's. N.L. 0.0 5.1

Charlottetown -0.5 -1.2

Halifax 0.1 0.7

Saint John, Fredericton and Moncton, N.B. 0.0 0.7

Quebec 0.0 3.4

Montreal 1.0 2.7

Ottawa-Gatineau 0.3 3.3

Toronto and Oshawa 0.1 1.4

Hamilton -0.3 0.3

London, Ont. 1.7 4.2

Kitchener, Ont. 1.0 1.4

Windsor, Ont. 0.0 0.3

Winnipeg 0.4 4.5

Regina 0.0 2.9

Saskatoon 0.5 1.8

Calgary 0.4 2.0

Edmonton -0.3 -2.4

Vancouver 0.5 4.3

Victoria 0.3 -4.6

Source: Statistics Canada

Copyright (c) Canwest News Service

Read more: http://www.vancouversun.com

(Surrey, BC) - The Fraser Valley Real Estate Board’s Multiple Listing Service (MLS®) saw close to record levels of listings in April, in addition to strong sales and prices.

Deanna Horn, president of the Board, says, “This is a typical, healthy spring market for the Fraser Valley. We received an abundance of new listings in all price categories giving buyers tremendous opportunity, while sellers saw a typical detached home sell in an average of 40 days for 13 per cent more than in April of last year.”

The Fraser Valley Real Estate Board received 3,760 new listings in April compared to 2,477 new listings received during the same month last year, an increase of 51.8 per cent. The new inventory increased the number of active listings to the second highest April on record, reaching 10,635, with only April 1995, at 11,891, offering more selection.

Along with the surge in listings, April sales remained strong, similar to the same month in 2007 and 2008, finishing with 1,793 total units sold, an increase of 38.7 per cent compared to the 1,293 sales sold in April of last year when the market was beginning to recover.

“A number of factors are motivating buyers. Spring is one of the most popular times of year to house hunt, plus interest rates are edging up and buyers are inquiring about the upcoming Harmonized Sales Tax in BC.

Horn explains, “The Fraser Valley will offer savings when the HST comes into effect because many new homes in our region fall under the new housing rebate threshold.”

Thanks to lobbying efforts by REALTORS® and other housing industry advocates, the threshold to receive the maximum BC new housing rebate was increased to $525,000 from $400,000, the government’s originally proposed limit. Horn says, “It’s important for buyers to know that the majority of new townhomes and apartments in the Fraser Valley cost less than $525,000, including some single family detached homes.”

In April, the benchmark price for Fraser Valley detached homes was $520,423 – reflecting all residential sales on the MLS®, of which approximately 10 per cent were new homes. That benchmark price is 13.1 per cent higher than it was in April 2009, when it was $460,229.

The benchmark price of Fraser Valley townhouses in April was $326,367, a 10.6 per cent increase compared to $295,078 in April 2009. The benchmark price of apartments increased by 8.3 per cent year-over-year going from $230,337 in April 2009 to $249,453 in April 2010. 

Information and photos of all Fraser Valley Real Estate Board listings can be found on the national, public web sitewww.REALTOR.ca. Further market statistics can be found on the Board’s web page at www.fvreb.bc.ca. The Fraser Valley Real Estate Board is an association of 2,978 real estate professionals who live and work in the communities of North Delta, Surrey, White Rock, Langley, Abbotsford, and Mission.