Canada’s housing market stabilizes in third quarter

The number of properties listed in some of Canada’s major markets was down this quarter. This shift can be interpreted as a shift towards a more balanced sales-to-new-listings ratio. To achieve what would be considered a “balanced market”, we look for the number of sales to equate to the number of houses put on the market for sale. Calgary, Edmonton, Vancouver and Montreal have all shown slight drops since the previous quarter. The third quarter indicates that we are headed in the direction of a more balanced market.

"Informed buyers and informed sellers look at the facts. And the facts right now indicate the real estate resale market is stabilizing in many markets," says Calvin Lindberg, the President of The Canadian Real Estate Association.

"There have also been a number of initiatives that will have an impact going forward, including the government’s decision to invest $25 billion in insured mortgage pools, the recent drop in the Bank of Canada rate, and the new rules reducing the maximum amortization to 35 years instead of 40," the CREA President adds. The new mortgage rules took effect October 15th. "The third quarter MLS® statistics and these developments are more factors showing the Canadian market is not following U.S. housing trends."

Sales activity remains similar to that of last year, but prices, on average, have dropped slightly in the more expensive markets. This is due to an increase in the sale of houses of lesser value and lower sales activity in the higher priced markets.

"As the Canadian housing market and pricing environment cools, the number of days on market for sales is likely to rise. By and large, Canadian home sellers are under no financial duress to sell. Canadian homebuyers should not expect to see the kind of price correction that’s underway in the U.S., where overly indebted homeowners are selling into a housing market where foreclosures and the number of newly constructed unoccupied homes are increasing."

Burlington Real Estate Market Report - September 2008

Burlington, Ontario: Although there is a lot of news permeating our print and airways regarding a softening real estate market, Burlington still seems to be holding strong. Burlington is still experiencing an increase in average housing prices for the month of September from last year to this year. Average prices were $329,416 in September 2007 to $370,479 in September 2008 representing a 12.47% increase. Housing prices have also steadily increased from January of this year through to September. In January, the average price for a house in Burlington was $351,691. Prices have risen throughout the year by 5.34% to an average of $370,479 in September. Sellers are still receiving 97% of their asking prices for their properties, houses are currently remaining on the market for an average of 44 days and Burlington has sold 248 units this month, compared to 254 units this time last year marking a decrease of 2.36% or 6 units.
For market information specific to your area in Burlington, or any other area of interest, please call or send me an email so I can send this valuable market information to you on a regular basis.

Sean Kavanagh

www.seankavanagh.ca
www.kavanaghrealestate.ca

Oakville Real Estate Market Report September 2008

Oakville, Ontario: Although there is a lot of news permeating our print and airways regarding a softening real estate market, Oakville seems to be showing some resistance. Oakville is still experiencing an increase in average housing prices for the month of September from last year to this year. $466,802 in September 2007 to $479,853 in September 2008 representing a 2.8% increase. Housing prices have also steadily increased from January of this year through to September. In January, the average price for a house in Oakville was $476,883. Prices have risen throughout the year by 8.18% to an average of $515,915 in September. Sellers are receiving 96% of their asking prices for their properties, houses are currently remaining on the market for an average of 40 days and Oakville has sold 212 units this month, compared to 267 units this time last year marking a decrease of 20.6% or 55 units.
For market information more specific to your area of Oakville, please call or send me an email so I can send this valuable market information to you on a regular basis.

Sean Kavanagh

www.seankavanagh.ca
www.kavanaghrealestate.ca

PM says we’re OK.

Recent popular belief is that Canada will fall into the disastrous economic situation that has crippled the U.S. economy. As our economy is affected by what happens south of the boarder, it is important to understand that we have been able to maintain a solvent banking system (where the U.S. has failed) and our government has implemented measures to prevent a collapse of our real estate market (no more 40 year amortizations with zero money down). The U.S. is suffering due to the vast number of mortgage defaults and questionable lending policies. These factors alone have our Prime Minister feeling confident we will avoid the facing a similar situation to that in the U.S.

We will see a decrease in sale prices and housing inventories will rise, but this adjustment is simply to bring back balance to the market. As Canada has avoided the dreadful banking situation and sub-prime lending, the financial institutions are not in jeopardy. Canada has recently been rated as the ‘World’s Soundest Banking System’ according to a world economic forum report on global competitiveness. The U.S. was rated 40th, just below economic powerhouses such as Estonia, Barbados and Namibia.

We are fortunate our government monitors our financial systems much more closely than our ‘Wild West’ cousins to the south. It is for this reason we have avoided a similar economic meltdown. Most economists feel that we are headed for a market correction rather than a crash. Some markets within Canada have been growing at such an unsustainable rate that there is a correction presently occurring to bring back balance.

Canada rated as the world’s soundest banking system.

For those of us concerned about how the much publicized American financial meltdown will permeate north of the border, we should all take some relief in knowing that a World Economic Forum Report on global competitiveness has rated Canada’s banking system as the soundest system in the world.

These statistics were released to quell the panic due to the global financial crisis and bank failures. To help rectify the situation, halt panic selling and to restore some trust in world banking systems, central banks in Europe, the UK, the United States, China, Canada, Sweden, and Switzerland have slashed interest rates.

Canada scored a world high 6.8 points out of a possible 7 points. Sweden, Luxembourg, Austria and Denmark scored close behind at 6.7. The well documented crisis in the U.S. has them ranked 40th, just behind Estonia, Barbados, and Namibia.

Although our two countries are close geographically and it would be naïve to report we weren’t linked economically, it is important for Canadians to understand that we have financial systems in place to prevent the crisis that has paralyzed the U.S.