|
Call Now! 1-866-932-8412 or
Email: info@mortgagegirl.ca |
The Journal Business Staff of edmontonjournal.com has put together an article designed to show how steady prices in Edmonton’s housing market have put to rest fears of a real estate bubble in the city.
Taking into consideration the latest data from the Royal LePage House Price Survey, that shows that at the end of July, August and September, detached bungalows in the Edmonton area rose an average of 0.9 per cent year-over-year to $311,429 while standard two-storey houses increased 3.4 per cent to $338,571, their conclusion is that the market is “stabilizing.”
“For most housing types, prices have increased slightly from where they were a year ago,” said Ken Shearer, a broker with Royal LePage Noralta Real Estate, in a release. “However, we are currently witnessing a levelling off of prices after the quick recovery that began in 2009 and continued through until the spring of this year. To put it in simple terms: prices fell last year, rose quickly through spring and summer of 2010, then dropped back down.”
Price differences varied by neighbourhood and home type. Clareview, for example, saw an average detached bungalow fall 9.1 per cent to $250,000 year-over-year but a standard two-storey increase by 22 per cent to $360,000.
In Clareview a standard condo dropped 11.1 per cent to $160,000. In Riverbend/Terwillegar, bungalows increased on average 15.8 per cent to $440,000 while the average two-storey rose 11 per cent to $390,000. Prices for all housing types remained flat in St. Albert.
Phil Soper, chief executive of Royal LePage Real Estate Services, said that while annual price growth was slightly lower than five per cent in the last quarter, it’s basically in line with that level when factoring in a lower rate of inflation.
In the early part of this year and latter part of 2009, double-digit price growth, year-to-year, was the norm. The Canadian Real Estate Association recorded a surge of more than 20 per cent in October 2009.
These strong gains, as the economy was rebounding from recession while enjoying historically low interest rates, had some fearing Canada was experiencing a housing bubble.
“A few weeks or a few months of unusually high period-over-period price increases after a recession is completely normal,” Soper said. “And it’s no bubble.”
The Royal LePage report is the latest showing the Canadian housing market in stable territory.
CREA recently reported home sales rising in September for the second straight month. Prices of homes sold through the Multiple Listing Service (MLS) were flat compared with a year earlier and ahead 1.9 per cent from August.
And Statistics Canada recently said that new-home prices in August were up 0.1 per cent, even as most economists expected a decline by as much.
However, despite the positive trends of the Canadian housing market, many analysts have warned against looking to housing as a primary, long-term investment strategy, and are instead recommending diversification.
Edmonton Mortgage Broker Home Equity Loan Edmonton Home Equity Loan Best Mortgage Rates Edmonton Edmonton Mortgage Mortgage Rates Alberta
Read more:
http://www.edmontonjournal.com/
The Royal LePage House Price Survey was released today, with third quarter results showing that Canadian house prices are appreciating just slightly below the long-term annual norm of five per cent per year.
“Most Canadian housing markets cooled in the third quarter. In fact, the year is unfolding much as we predicted, with the unusually active first half of 2010 giving way to slower markets in the later part of the year. Helped by very low rates in a competitive mortgage financing market, the third quarter was slightly stronger than anticipated, on new demand fuelled by improved affordability in many regions,” said Phil Soper, president and chief executive, Royal LePage Real Estate Services. Looking ahead, it is very unlikely that the period from now to year-end can keep pace with the activity levels posted in the overheated market of the final quarter of 2009.”
Average price of a Canadian detached bungalow in the three-month period ending in September was $324,531, up 4.6 per cent from a year earlier, for a two-storey home was $360,329, up 4.4 per cent, while the average price of a condominium was $226,481, up 3.9 per cent.
Housing markets in Alberta stabilized in the third quarter as inventory rose and year-over-year prices flattened. Detached bungalows in Calgary rose 2.7 per cent while standard condominiums and two-storey homes decreased by 1 and 1.1 per cent, respectively. In Edmonton, standard two-storey homes were up 3.4 per cent to $338,571, while standard condominiums were down 3.6 per cent year-over-year to $204,167.
About the Royal LePage House Price Survey
The Royal LePage House Price Survey contains information on seven types of housing in over 250 neighbourhoods from all over Canada. This release references an abbreviated version of the survey, which highlights house price trends for the three most common types of housing in Canada in 80 communities across the country.
More information:
Royal LePage Q3 2010 House Price Survey – Data Chart (.PDF)
Bank of Canada maintains overnight rate target at 1%
As expected, the Bank of Canada announced today that is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.
The Bank also lowered its growth forecasts, but made a surprising statement by suggesting rates will stay on hold. Among the reasons for making that decision it pointed out to factors like the “global economic recovery entering a new phase.”
In advanced economies, temporary factors supporting growth in 2010 – such as the inventory cycle and pent-up demand – have largely run their course and fiscal stimulus will shift to fiscal consolidation over the projection horizon. While the Bank expects that private demand in advanced economies will become sufficiently entrenched to sustain the recovery, the combination of difficult labour market dynamics and ongoing deleveraging in many advanced economies is expected to moderate the pace of growth relative to prior expectations. These factors will contribute to a weaker-than-projected recovery in the United States in particular. Growth in emerging-market economies is expected to ease to a more sustainable pace as fiscal and monetary policies are tightened. Heightened tensions in currency markets and related risks associated with global imbalances could result in a more protracted and difficult global recovery.
The Bank expects the economic recovery for Canada to be more gradual than it had projected in its July Monetary Policy Report. The bank lowered its 2010 growth forecast to 3.0 percent from the 3.5 percent it forecast in July, and its 2011 forecast to 2.3 percent from 2.9 percent. It raised its prediction for growth on 2012 to 2.6 percent from 2.2 percent. This new projections takes into account both the sluggish global economic recovery and a decline in housing activity that will undoubtedly affect household debt.
The Bank now expects household expenditures to slow down to a pace closer to the rate of income growth. Overall, the composition of demand in Canada is expected to shift towards business investment and net exports that will be sensitive to currency movements against the dollar, productivity growth, and external demand.
Inflation in Canada has kept below the Bank’s July projection and the outlook has been revised down. Core inflation, which strips out volatile items and the effects of tax changes, was 1.6 percent in August, while overall inflation was 1.7 percent. Both total CPI and core inflation are now expected to converge to 2 per cent by the end of 2012, as excess supply in the economy is gradually absorbed and inflation expectations remain well-anchored. September’s inflation figures will be released on Friday.
The Bank of Canada concluded that,
Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. This leaves considerable monetary stimulus in place, consistent with achieving the 2 per cent inflation target in an environment of significant excess supply in Canada.
At this time of transition in the global recovery, with a weaker U.S. outlook, constraints beginning to moderate growth in emerging-market economies, and domestic considerations that are expected to slow consumption and housing activity in Canada, any further reduction in monetary policy stimulus would need to be carefully considered.
Several analysts have suggested that rate hikes could take place again not sooner than March next year and as late as the end of 2011.
Statistics Canada has released its Investment in non-residential building construction for the third quarter of the 2010, and the figures show that investment reached $10.4 billion in the third quarter. That’s a 2.9% increase from the second quarter and the third consecutive quarterly gain. The increase was mainly the result of higher spending on commercial and industrial buildings.
Investment decreased in Alberta however, due to lower institutional spending. The other only province where investment fell was Saskatchewan, due also to lower spending in the institutional components as well as in the industrial ones.
Commercial component
Investors put $5.9 billion into commercial projects, up 4.1% from the second quarter. It was thee third consecutive quarterly gain, as a result of higher spending on transportation and recreational buildings, especially in Ontario and Alberta.
Industrial component
Investment in the industrial component increased 4.3% to $1.1 billion in the third quarter. It was the second quarterly increase in a row, due to higher investment in the construction of primary industry buildings in eight provinces and the construction of utilities buildings in six provinces.
Provincially, the most substantial contributions to the quarterly increase came from Ontario, where investment rose 7.3% to $453 million, and from Alberta, where it was up 6.5% to $237 million.
Institutional component
Investment in institutional construction edged up 0.4% in the third quarter to $3.4 billion. The biggest contributing factor was higher spending on educational facilities in nine provinces.
Alberta saw the largest decline, mainly the result of lower spending in the construction of health care facilities and government buildings.
More detailed data on investment in non-residential building construction are also available in free tables online from the Key resource module of the Statistics Canada’s website under Summary tables.
For more information, or to enquire about the concepts, methods or data quality of this release, please visit Statistics Canada at
http://www.statcan.gc.ca/daily-quotidien/101018/dq101018b-eng.htm