In June, 8.7% more homes were sold than in May. It’s the fifth straight month of increases — a 17.9% increase over June 2008.

“This rebound reflects the releasing of a pent-up demand by buyers who moved to the sidelines towards the end of last year,” said CREA chief economist Gregory Klump.

“Now there are signs the worst of the recession may be behind us, those people are emerging.”

The bounce back was strongest in British Columbia, where 39.8% more homes were sold in June this over the same month last year. According to the CREA report, Ontario was up 15.7%, Quebec 9.8%, Alberta 22.2%, Saskatchewan 25.2% and Manitoba 0.2%.

This surge in home buying came despite a decision by Canada’s five big banks last month to raise five-year fixed mortgage rates 40 basis points from 5.45% to 5.85%.

The decision was made despite the Bank of Canada’s efforts to keep borrowing low by pledging to hold interest rates at the historic low of 0.25% until the middle of 2010.

Mary Webb, a senior economist with Scotiabank, says the low long-term interest rates in the spring were a reflection of a global economy with almost no signs of growth and that was bound to change.

“Now we’re looking for a recovery, and not just in Canada but globally, and we’re seeing it already in China and we expect growth to strengthen later this year and early next,” Webb said.

With more people borrowing, banks are being forced to pay more to borrow the money they lend to home buyers, and that drives up long-term interest rates, she said.

http://www.torontosun.com/news/canada/2009/07/15/10136046-sun.html

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“Declining costs of home ownership during the last year were driven by significant cuts in mortgage rates along with the federal government taking an active role in supporting the mortgage securities market,” RBC said. “In the first quarter, monthly payments on a typical detached bungalow in Canada had decreased by close to 17 per cent from a year earlier.”

The average cost to own a bungalow in this year’s first quarter was $1,350 a month, down from $1,520 in 2008’s fourth quarter and $1,620 in last year’s first quarter.

RBC’s affordability index — the percentage of pre-tax monthly household income needed to maintain a home, including mortgage payments, utilities and property taxes — improved across all housing segments in Canada.

The average affordability for a bungalow in the first quarter was 39.4 per cent, down four points from 2008’s fourth quarter. It was 44.7 per cent for a standard two-storey (down five points), and 27.1 per cent for a condominium (down 2.8 points).

The average cost of maintaining a detached bungalow in Vancouver was 62.6 per cent of household income during the first quarter, while in Toronto it was 45.9 per cent, RBC said. Ottawa affordability was 39.1 per cent, Montreal 36.5 per cent, Calgary 35.1 per cent, and Edmonton 34 per cent.

From a provincial standpoint, RBC said housing affordability in British Columbia saw its biggest improvements since 1991, with the percentage of income required for various housing types dropping between 3.4 and 7.4 percentage points during the quarter. In Ontario, RBC said housing sales activity has returned to levels seen in mid-2008, largely as a result of improved affordability.

“With the turmoil in financial markets partially subsiding and the flow of credit increasing, home resale activity has rallied impressively since the late winter,” said Robert Hogue, RBC’s senior economist. “What’s most impressive is how widespread this rebound has been, with all major cities in Canada experiencing a revival.

“”With property values stabilizing and the effect of the steep drop in mortgage rates likely behind us, further improvement in affordability will depend on greater gains in family income,” Hogue added. “Those gains will be dictated by the speed of the economic recovery expected during the second half of this year.”

The RBC’s assessment follows a separate report this week from real estate agency Royal LePage that said improved housing-market conditions in this year’s second quarter points to a better overall performance in 2009 than previously anticipated.

Also, a number of local markets saw sharp spikes in sales last month, including Toronto, Ottawa and Edmonton, where new sales records were set for June.

Percentage of gross income required to own a standard bungalow in first quarter of 2009 (change from previous quarter):

British Columbia 59.0 (-6.0)

Alberta 33.2 (-4.6)

Saskatchewan 42.0 (-3.3)

Manitoba 35.3 (-2.9)

Ontario 38.6 (-4.2)

Quebec 32.3 (-2.5)

Atlantic 31.3 (-2.9)

Canada 39.4 (-4.0)

Source: RBC Economics

http://www.canada.com/Business/Home+ownership+getting+more+affordable/1771375/story.html

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Updated Wed. Apr. 8 2009 6:40 PM ET

CTV.ca News Staff

A recession-cooled Canadian real estate market saw falling housing prices during the first quarter of the year, though the declines were not as steep as expected.

A quarterly house price survey, released Wednesday by Royal LePage Real Estate Services, showed national price declines in several major housing types compared to the same quarter in 2008.

According to the survey numbers:

* The price of a standard two-storey home dropped 6.5 per cent
* The price of a detached bungalow fell 6.1 per cent
* The price of a standard condominium declined by 4 per cent

Royal LePage Real Estate Services President Phil Soper said the data shows the hottest housing market to be in St. John’s, where prices for standard two-storey homes rose 15 per cent year over year.

“Consumer confidence drives a lot of activity in the housing market and they remain a very confident lot, and there’s still a supply shortage of homes for sale there,” he told CTV’s Canada AM.

Soper said other markets in Atlantic Canada also performed steadily, due in part to the region’s affordable housing prices and to an increasingly diverse regional economy.

“Halifax, Moncton, Saint John, N.B., are all healthy markets,” he said.

“The economies have really diversified over the last 15 years and it’s showing up in terms of steadier prices.”

In Ontario and Quebec, Royal LePage said the markets “held steady” with some small gains and declines. But overall, Ontario typically saw “mid to low single digit declines” in its housing prices, the survey said.

The survey said that Western provinces saw “significant changes” in real estate prices, with double-digit declines in many areas. Manitoba was the lone major exception to this trend.

The survey predicted that B.C. and Alberta may be among the first areas in Canada to see pricing gains because those provinces experienced market corrections prior to the brunt of the economic crisis.

Soper said the first quarter of 2009 was, overall, one of the worst-performing sales periods for real estate in recent memory.

But he said Canadian realtors have high hopes for an improvement in the national market this spring.

“There is a remarkable uptick in March in buying activity in the marketplace, compared to November, December, January, February, (which) were easily the worst four months in the last decade in terms of housing market activity,” he said.

Out west, the declines were particularly severe, Soper said.

“In Vancouver, the activity level in the province was down by half,” Soper said.

“Fifty per cent of the transactions just disappeared over those four months. So, now we’re only down 25 per cent in March, that’s a remarkable turnaround in one month.”

The survey also said that condominiums have become “increasingly accessible” for young homeowners across Canada, due to a combination of low lending rates and falling prices during the recession.

In the first quarter of 2009, the average price of a standard Canadian condominium was $232, 877 — a mid-point price on a scale that ranged from $120,000 in Charlottetown to $431,500 in Vancouver.

http://www.johnhutton.ca/?p=84

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