The latest data from the Canadian Real Estate Association is now showing about half of the countries markets with rising and half with dropping prices.
Toronto and Vancouver are doing well so far with a year over year increase of 4.9% and 1.8% .
The big winner? That would be St. Catharines with a YOY increase of 16.1%.
The overall average house price grew 3.1 per cent in the year to January, to $401,143. That’s the smallest increase since April, 2013, but it’s largely a story of two still-hot housing markets: Toronto and Vancouver. Strip out those two cities and average house prices are down 0.3 per cent over the past year.
Home sales, meanwhile, are 2 per cent lower than they were a year ago, CREA numbers showed.
Major energy industry centres like Calgary, Edmonton, Saskatoon and Regina saw some of the sharpest declines in housing demand, TD economist Diana Petramala noted.
There is “a widening regional wedge” in Canada’s housing markets, Petramala wrote in a client note, as oil-importing cities’ housing markets benefit from lower oil prices while producer cities struggle.
Read the full article here.
Over at the CBC Don Pittis notes that what goes up can also go down.
Specifically, he notes that in the oil market there were a number of ‘experts’ with access to detailed data and analysis, yet seemed to be as surprised as anyone at the drop in oil prices.
Canadas housing market is of course a completely different beast, and we don’t really lack for ‘experts’ noting that prices are a bit out of sync with reality. When the Finance Minister speaks up and the Bank of Canada estimates that real estate is as much as 30% overpriced nationwide that’s not exactly ‘without warning’.
Pittis notes another key difference between oil and housing is of course the liquidity of the market:
This is one example of how housing is different from oil. While oil trades on big, well-informed central trading desks by large corporations, housing is a market made of individual, many of whom have only bought and sold a house once in their life.
Partly because of that, housing is an illiquid market. Unlike stocks or oil, you can’t just sell a house at today’s price and get out. You have to go through the long process of finding another individual who wants to buy your exact house at a price at which you are willing to sell.
In previous housing downturns that has meant a stock of overpriced houses builds up because buyers are unwilling to pay the price sellers expect.
At that point, prices in the market are set by people who have to sell immediately and will take the price offered. Sudden divorces. A new job across the country. A death in family. People who can’t afford to keep up their payments. Overpriced properties waiting for their price actually fall in value while the seller waits.
Read the full article here.
Just in time for the spring buying season the Province newspaper has published a public service announcement about the hottest lower mainland markets.
What do the experts say are the hottest markets in BC?
2.Maple Ridge / Pitt Meadows
3.Fort St. John
Surrey seems to do quite well with REIN – they took the number one investment spot in the province last year and also in 2012, 2011, and 2010.
Have you bought your surrey home yet?
It’s that time of the week again, time for our Friday Free-for-all! This is when we round up the weeks news and have our open topic discussion thread for the weekend, here are a few recent links to kick off the chat:
–IMF: You need tighter mortgage rules
–TD: forcasting for the provinces
–Teranet HPI scatter plot
–Conservative impact from RE market?
–Carney gets $400k for housing
–Luxury home decline
–Sales below 10 year average
–Stay out of New West Bob
–Home prices fall in most Canadian markets
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!