Good evening/morning everyone;
- This week in the market colder temps have not cooled off the housing bidding wars. Last week I participated in a bidding war with 3 offers.
- Last night my clients and I were 1 of 19 (was 20 but one buyer backed out) offers competing for a home. Unfortunately in both situations we fell short to acquire the homes.
During this time of year lower inventory rates occur as sellers hold off for the holidays. Decent homes are far and few between resulting in this kind of bidding action for any home that comes to market. So if you are serious about selling it is not a bad idea to list when there are few other homes to compete against.
Last night the home we were competing for was: in a great location, charming, and was very liveable with potential to improve overtime. 18 other buyers felt the same.
This December has been significantly more active for the freehold market than previous years – at least it feels that way. I’ll report back with sales data in early January.
Remax Canada has put forth a forecast of a “very robust” housing market for 2014.
- Interest rates are not expected to rise.
- The economy on a whole is expected to improve (although at a modest pace)
- And inventory will most likely remain low.
3 Most Expensive Places to Live in Canada
1. British Columbia
- Cost of standard, two-storey house: 74.1% of household income
- Cost of detached bungalow: 69.2% of household income
- Cost of condominium: 34.7% of household income
Housing sales in British Columbia have picked up since last year, but this has led to a worsening in housing affordability in the province. Affordability for a two-storey house fell by 1.2 percentage points; affordability for a detached bungalow dropped by 1.5 percentage points; and affordability for a condominium worsened by 0.8 percentage points. As the province’s economy improves, it’s expected that home sales will continue rebounding into 2014, according to The Globe and Mail.
The affordability situation is even worse in Vancouver. Vancouver residents pay 87.4 per cent of their household income for a two-storey house, 84.2 per cent for a bungalow and 41.9 per cent for a condo.
- Cost of standard, two-storey house: 50.6% of household income
- Cost of detached bungalow: 44.9% of household income
- Cost of condominium: 29.6% of household income
Housing affordability in Ontario has worsened for all types of houses in the last quarter. Two-storey houses became less affordable by 0.7 percentage points, detached bungalows became less affordable by 0.9 percentage points and condominiums became less affordable by 0.2 percentage points. While both two-storey homes and bungalows have become less affordable, the situation hasn’t reached an extreme or dangerous point, and condos are still affordable for most homebuyers, according to the RBC report. Ontario’s current affordability levels are worse than the national average.
In Toronto, the costs of owning have reached historic highs; two-storey houses cost 63.7 per cent of a household’s income, detached bungalow cost 55.6 per cent of a household’s income, and condos cost 33.8 per cent of household incomes. Toronto’s high costs have fueled Hamilton’s housing market — the city was a top performer in housing sales this year, according to TD Economics’ Canadian Regional Housing Market Outlook. It’s expected that both cities will see more moderate levels of housing sales in the near future. Meanwhile, homes are more affordable in Ottawa than the averages for both Ontario and Canada
- Cost of standard, two-storey house: 42.9% of household income
- Cost of detached bungalow: 33.9% of household income
- Cost of condominium: 26.4% of household income
Housing affordability in Quebec worsened during the third quarter of 2013. The cost of a two-storey house and a detached bungalow were slightly less affordable (0.6 percentage points and 0.5 percentage points, respectively). Affordability for houses in Quebec is better than the national average. Montreal’s housing market is rebounding, but it is still recovering from a downturn last year.
Quebec has seen a rise in the number of condos being listed (affordability of condos in Montreal is at 30.5 per cent). Owning a two-storey house in Montreal is also becoming more unaffordable since costs will account for more than half (50.6 per cent) of a household’s income.
Quebec’s housing market has undergone a slight price correction and it’s expected that prices will continue to drop in 2014 and 2015, according to TD Economics’ Canadian Regional Housing Market Outlook. While the federal government looks to possibly cool the country’s housing market once more, Quebec’s finance minister is concerned that any changes could hurt the province’s economy
Alberta – despite its economic oil boom is ranked 7th behind Atlantic Canada, Manitoba, Saskatchewan
TORONTO (Reuters) – New homebuilding in Canada slowed slightly in November, coming in below economists’ expectations and suggesting some stabilization for the country’s robust housing market.
By Leah Schnurr , December 9th
The seasonally adjusted annualized rate of housing starts was 192,235 units last month from a downwardly revised 198,161 in October, the Canada Mortgage and Housing Corp said.
That was short of analysts’ expectations for 195,000. Housing starts in October were initially reported as 198,282.
Still, the longer-term trend fared better, with the six-month moving average of seasonally adjusted starts dipping only slightly to 194,014 units from 195,274.
Canada’s housing market has shown resilience this year after a slowdown in the second half of 2012 when the federal government tightened mortgage rules due to concern consumers are taking on too much debt.
Policymakers have kept a close eye on the housing market, which boomed following the financial crisis due to record low borrowing costs. Some fear this could lead to a U.S.-style crash, “Canadian homebuilding activity might be a touch on the warm side, but builders still look pretty well behaved overall,” Robert Kavcic, senior economist at BMO Capital Markets, wrote.
While starts are somewhat ahead of the amount needed to account for household formation at about 180,000, they are comfortably below levels seen during the pre-recession period, Kavcic said.
Many analysts expect mortgage rates, largely set off of bond yields, to push higher next year, which should also prevent the sector from becoming overheated.
“The momentum in the market does lay to rest any fears of a sharper retrenchment, but we expect that the gradual grind higher in yields in 2014 and beyond will drive a more sustained pullback in construction,” David Tulk, chief Canada macro strategist at TD Securities wrote in a note.
Multiple housing unit starts in urban areas decreased by 3.5 percent to 111,036 units last month, while single-detached urban starts also fell by 3.1 percent to 60,311.
“Overall, housing starts have been following a trend similar to sales on the existing home market. As sales rise relative to listings of existing homes, buyers are increasingly meeting their needs in the new home market,” Mathieu Laberge, deputy chief economist at CMHC, said in a statement.
The seasonally adjusted annual rate of urban starts slowed in Ontario and the Atlantic provinces, while picking up in Quebec, the Prairies and British Columbia.
Next week will be the final communication of the year and I will pick it up again mid-January.
Have a fantastic weekend and glorious week, Anthony