Posted in: Abbotsford
Scotia Ecnomics forecast for 2011
Global Real Estate Trends
Global Economic Research
December 23, 2010
Canada had one of the better performing housing
markets among advanced nations in 2010, though
also one of the most volatile. An unusually active
winter and spring, prompted by pent-up demand,
expectations of rising interest rates that only
partially materialized, the looming transition to a
Harmonized Sales Tax (HST) in Ontario and British
Columbia, and pending changes in lending
qualifying criteria, gave way to an unusually soft summer. Over the
fall, sales have returned to a more typical, sustainable level.
Pricing has mirrored demand. Average
inflation-adjusted home price appreciation
swung from a twelve-month gain of 16.6%
y/y in Q1 to a decline of 1.5% y/y in Q3.
More recent monthly data point to a
stabilization, with prices essentially
unchanged in the twelve months to
November. For the year as a whole, real
home prices likely averaged about 5%
above 2009 levels.
We are neither overtly optimistic nor
pessimistic regarding the outlook for 2011.
On the one hand, we expect interest rates to
remain at historically low levels, with the Bank of Canada deferring
any further rate hikes until late 2011 given an uncertain global
economic outlook and subdued inflation, and longerterm
borrowing costs drifting up only modestly. This
is an extremely powerful inducement for both firsttime
and move-up buyers and should maintain a
decent level of sales.
Yet, demand will likely be tempered by more
moderate employment and income growth as
government restraint efforts take hold. Public sector
hiring has accounted for fully a third of the net new
jobs created in Canada over the past year, a pattern
not likely to be repeated next year. Overall, we
anticipate a fairly lacklustre year for residential
housing, with modestly higher sales volumes and
flat inflation-adjusted prices (equivalent to a 2%
increase in nominal terms). The bigger risk likely
awaits 2012 when more significant interest rate
increases, combined with record high home prices,
will notably strain affordability.
December, 02 2010 11:34:12 am, by FVREB
For the fifth consecutive month, sales processed on the Fraser Valley Real Estate Board’s multiple Listing Service® (MLS®) have remained stable with November’s figures showing a modest increase over October.
“Consumers are responding to how prices have moderated in the last six months, in addition to the double dip in mortgage rates,” says Deanna Horn, Board president.
“Buyers are optimistic because of the improved economic conditions, which is why we’re seeing consistency in homes sales in the Fraser Valley.”
A total of 1,084 sales were processed on the Board’s MLS® in November, an increase of 7 per cent compared to 1,014 sales in October and a decrease of 29 per cent compared to 1,522 sales in November of last year.
The Board received the fewest number of new listings this year to date with 1,773 new properties coming on stream in November, a 17 per cent decrease from October and a 15 per cent decrease compared to November 2009. The Board finished November with 9,049 active listings, 5 per cent fewer than in October and an increase of 9 per cent compared to the 8,334 properties available in November 2009.
Horn says, “It’s not unusual to see a dip in new listings at this time of year, however the level of homebuying interest, in particular for homes priced competitively, is stronger than we expected given we’re approaching the holiday season. That combination continues to have a stabilizing effect on home prices in the Fraser Valley.”
The benchmark price for Fraser Valley detached homes in November was $504,848, down 0.2 per cent compared to October and 1.4 per cent higher compared to $497,697 in November 2009.
The benchmark price of Fraser Valley townhouses in November was $319,623, a 0.2 per cent increase compared to October and a 1.2 per cent increase compared to November 2009 when it was $315,890.
Year-over-year, the benchmark price of apartments increased 2.7 per cent going from $235,842 in November 2009 to $242,276 last month and 0.7 per cent higher compared to October 2010.
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