Thursday, May 19, 2011

TD Canada Trust Report on Economic News - May 19, 2011

This is the latest news from TD Cnaada Trust, enjoy!

Release: The Canadian resale housing market softens in April

* After the mortgage rule changes that came into effect in March produced a "rush-to-buy" in the first quarter, existing home sales fell back 4.4% in April, to 36,564 units.

* Regionally the largest declines were seen in some of Canada's most active and expensive markets namely Toronto, Vancouver and the Fraser Valley - areas which had seen the biggest rush-to-buy ahead of the rule changes.

* However, sellers remained optimistic with new listings up 1.3% in April, after falling in March. An increase in new listings combined with softer sales pushed the sales-to-new listings rate to 0.525, from 0.557 in March, well within the territory of a balanced market, defined as a ratio between 0.45-0.60. On the whole, the Canadian Real Estate Association (CREA) characterizes two-thirds of local markets in Canada as balanced in April, with only half of the remaining markets classified as a "sellers'" market.

* Those "balanced" markets produced a 0.5% softening in home prices in April, although prices are still up 8.0% year-on-year. Lately a hot market in certain segments of Vancouver real estate has left an indelible mark on the price increase nationally national tally. Excluding Greater Vancouver, Canadian home prices are up a more moderate 5.1% year-on-year.

Key Implications

* April's decline in existing home sales shows the impact of the March 18th changes to mortgage rules that lifted existing home sales in Q1 to their highest level in a year as buyers rushed to buy ahead of the change. We don't expect the first quarter's pace to be sustained and April's reading
sets the stage for an expected softening.

* That said, decent employment and income gains and a still-low interest rate environment continue to provide a relatively favourable backdrop for home sales, and so we expect Canada's housing market to land softly. And after the rule-change inspired gyrations are in the rear-view mirror, we see sales gradually moderating as interest rates rise in the second half of this year.

* For the most part, Canada's housing market remains in a well-balanced position with few price pressures on the horizon. However, the national average price tally continues to be skewed by higher flying markets in Greater Vancouver and this area remains a key one to watch in the coming months.

I hope this finds you Happy and Healthy!

All the Best!


A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate
RE/MAX Realty Specialists Inc.
Providing Full-Time Professional Real Estate Services since 1987
BUS 905-828-3434
FAX 905-828-2829 CELL 416-520-1577

* Thinking of selling your home in the next 3 to 6 months? Would you
like a Complimentary & Quick Over-The-Net Home Evaluation ?

* Power of Sales and Foreclosures

* If you have not already signed up to receive my monthly real estate
newsletter, you may do so here: On-Line Real Estate Newsletter sign up

* See seasonal housing patterns

* Would you like me to send you a desk or wall Calendar?

No comments:

Post a Comment