Current Market Trends

How did the Real Estate Market Really do in 2010?  A Year in Review:

Friday, January 14, 2011

January
The year in Toronto got off to a good start with reports that 87,308 transactions were processed during 2009 – a 17% increase over 2008. That included 5,541 properties bought and sold during the month of December 2009 alone. The average home price climbed 4% in 2009 to $395,460, according to the Toronto Real Estate Board (TREB).

February
February was the month of Valentine’s Day, and TREB released statistics showing clients loved buying and selling properties, reporting that there were 4,986 transactions in January, a “huge” increase over the 2,670 sales during the same period in recession battered 2009.

March
Greater Toronto realtors reported 10,430 sales through the MLS in March, pushing total first quarter 2010 sales to 22,418 – the best result on record under the current TREB boundaries.
March was also when CREA filed its response to the Competition Bureau’s challenge of its MLS rules, calling comments by commissioner Melanie Aitken “preposterous”. “There is simply no legal, economic or factual basis upon which to order the remedy sought by the commissioner,” a statement from CREA said.

CREA’s response, filed with the Competition Tribunal March 26, stated the challenge was “fundamentally misconceived. Contrary to the commissioner’s allegations, is it simply untrue that consumers have only one option if they want to sell a house using a MLS system operated by a local real estate board or association?”

April
In April, real estate boards and associations across Canada were trying to get rid of land transfer taxes. The Winnipeg Real Estate Board released a study showing Manitoba had seen its land transfer tax revenues increase from $31 million in 2006 to $44.8 million in 2008, representing a 44 % increase. The board cited a November 2007 land transfer tax study by Will Dunning, the chief economist of the Canadian Association of Accredited Mortgage Professionals (CAAMP), showing “the taxes levied on land transfers are far in excess of any social or governmental ‘costs’ that result from the activity of home buying and therefore these discriminatory taxes are not justifiable.”

Dunning compared 1997 to the first nine months of 2007 and showed over a slightly less than ten year period, the tax payable had gone up more rapidly than house prices.

TREB officials released a poll showing that 70 % of Torontonians believe the Toronto land transfer tax was not a fair way for the city to address its budgetary needs. That was up from 62 % of Torontonians who felt the same way according to an earlier Environics poll conducted for TREB in 2007, prior to the implementation of the tax. That still didn’t stop TREB from also reporting 10,898 sales through MLS in April, representing a 34 % increase compared to April 2009. There were also 20,683 new listings in April –a 59 % annual increase. Both the sales and new listings results amounted to new records for the month of April under the current TREB boundaries

May
Greater Toronto realtors reported 9,470 sales though the MLS system in May, representing a one % dip from May. 2009. In comparison to previous years, this was the third highest May sales result on record.

June
Greater Toronto realtors reported 8,442 sales through MLS in June. This represented a 23% decrease compared with the 10, 995 originally sold during June of the previous year.
That was still substantially less unit volume than in the Vancouver area, where the Real Estate Board of Greater Vancouver reported 2,972 properties were sold, a decline of 30.2% compared to the 4,259 properties that changed hands in June 2009, the highest selling June on record for the board.

July
On July 1st, Ontario and British Columbia joined the Atlantic provinces of New Brunswick, Newfoundland and Nova Scotia when they introduced the controversial Harmonized Sales Tax (HST). The new tax is 13% in Ontario and 12% in B.C.

Meanwhile, over a dozen Kitchener Waterloo area realtors met with Ontario PC leader Tim Hudak to discuss the controversial land transfer tax. Hudak had advocated for a one year land transfer tax holiday to give buyers a break for that first year.

August
CREA launched a new national television commercial month called Faces, that was intended to highlight the value realtors bring to home buying and selling. In the 30-second ad, viewers see and hear testimonials from several individuals about their experience with their realtor. Men and women representing people from all walks of life talk about their unique needs when buying and selling a home. While they talk, their faces continually change, eventually becoming another person with another positive story.

September
As Labour Day approached the Real Estate market started to pick up, and we saw a new surge of buying demand on the market similar to the spring. Multiple offer situations were not uncommon on both the condo and home markets in the GTA.

October
The Ontario Real Estate Association (OREA) was upset this month. The group commissioned an Ipsos Reid survey that showed 56% of Ontario residents mistakenly believed the new Harmonized Sales Tax (HST) applied to the full purchase price of a resale home, when it is only levied on the various transaction fees associated with the purchase. “We’re doing our part to inform our clients, but we shouldn’t have to do it alone. We’re calling on the Ontario government to launch an immediate public awareness campaign to educate taxpayers and end the HST confusion,” said Dorothy Mason, President of OREA.“For average homebuyers, learning that the HST does not apply to the full purchase price means a $40,000 saving they weren’t expecting.”

TREB reported 6,681 sales through the MLS system in October 2010, while the REBGV showed home sales were steady the past four months, lending a sense of stability to the market. According to the MLS Link Housing Price Index (HPI), the benchmark price for all residential properties in Greater Vancouver over the last 12 months has increased 4.6% to $579,349 in October 2010 from $553,702 in October 2009. Since June, however, residential home prices in Greater Vancouver have remained relatively unchanged, declining 0.2%. “We’ve seen a lot more consistency and less volatility in recent months when it comes to both number of sales and pricing, although it’s important to remember that conditions often vary between communities and neighbourhoods,” Jake Moldowan, REBGV president said.

November
Toronto area realtors reported 6,510 existing home sales in November – down 13 % from 7,446 sales in November 2009. New listings were also down 13 % annually to 8,642, according to a news release. Meanwhile in Greater Vancouver, residential home sales improved in November compared to the previous four months, with the number of sales posted on the MLS coming in slightly higher than the 10-year average for that month. REBGV reports that the number of residential property sales in Greater Vancouver totalled 2,509 in November 2010. This represents a 7.4% increase compared to October 2010 and an 18.6 % decline from November 2009.

December
According to the sixth Annual State of the Residential Mortgage Market report from the Canadian Association of Accredited Mortgage Professionals (CAAMP), Canadian homeowners are comfortable with their mortgage debt, have significant home equity and could withstand an increase in their mortgage interest rate.

With a month to go in the year, Winnipeg realtors were preparing to celebrate a new record for dollar volume sales. MLS sales totalled $2.58 billion as of the end of November, surpassing the previous record of $2.47 billion set in 2009. “In many respects,” said Winnipeg REALTORS president Claude Davis, “the first 11 months bore a striking resemblance to last year with the exception that prices are continuing to climb, as they have been doing year-over year since 2003. “Looking ahead to the end of the year, Winnipeg REALTORS has already set a new annual MLS dollar volume record and will see MLS sales finish over the 12,000 unit mark — a level only surpassed five times previously,” he added. With 11,583 units sold by the end of November, year-to-date MLS® sales were virtually deadlocked with last year’s total of 11,563. November MLS unit sales were down less than one % to 829 transactions. On the other hand dollar volume sales during last month rose by 10 % to $182.2 million when compared to the same month in 2009, which is a new record for the month.

 

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