Real Estate Market at Boiling Point

Published: February 26th 2010

real estate
Pic: wikimedia commons
Guy Scheiner

Active listings are down in 81 per cent of real markets in January with interest rates remarkably low. Every good listing is getting full attention from variety of buyers.


Guy Scheiner, a Mortgage Broker and a Real Estate Agent with Sutton Group, describes the real estate arena as a sellers market. "From my perspective from all parts of the real estate arena, I see that the prices are very high, the demand for properties is bigger than the supply, people that were hurt form the recession don't want to move, they postpone the sell to better times. The prices have gone up as a consequence of this market condition along with encouraging interest rates that you can block today to five years and enjoy the low expense."   


RE/MAX Market Trends Report 2010, published this week, examined real estate trends and developments in 16 markets across the country. It found that unusually strong activity during one of the traditionally quietest months of the year has led to a sharp decline in active listings in 81 per cent of markets surveyed. The threat of higher interest rates, tighter lending criteria, and in British Columbia and Ontario, the introduction of the new Harmonized Sales Tax (HST) have clearly served to kick-start real estate activity from coast-to-coast, prompting an unprecedented influx of purchasers. As a result, 87.5 per cent of markets posted an increase in sales in January, with average price appreciated in 81 per cent of markets surveyed.



Markets experiencing the tightest inventory levels include Toronto (- 41 per cent); Kitchener-Waterloo (-33 per cent); Ottawa (- 30 per cent); Victoria (- 30 per cent); Greater Vancouver (- 27 per cent); Halifax-Dartmouth (- 19 per cent); London-St. Thomas (- 18 per cent); Regina (- 16 per cent); and Winnipeg (- 13 per cent). Conditions were still balanced, but starting to tighten in Calgary, Edmonton and Saskatoon, particularly in the single-family detached category.


The highest year-over-year sales gains were reported in Greater Vancouver (152 per cent), Kelowna (121 per cent), Greater Toronto (87 per cent), Victoria (69 per cent), Hamilton-Burlington (58 per cent), London-St. Thomas (55 per cent) and Calgary (47 per cent). Western Canadian cities dominated the list of centres with the highest increases in price appreciation. These included Victoria at 25.5 per cent, Kelowna at 22 per cent, Greater Vancouver at 19.5 per cent, and Winnipeg at 17 per cent. St. John's (23 per cent) and Toronto (19 per cent) were also among the frontrunners for price growth.


"In few months the situation will be different" explained Scheiner. "The interest rate will be higher for mortgages as the Bank of Canada promised to raise at the second mid. of this year. The new program to tighten the down payment will effect buyers and lower the pressure on real estate deals. Other then that, the new HST will add (additional) percentage to the price. All these factors can combine to the boiling market. Though, we need to remember that Canada is a land of immigrants and as new comers keep coming, the pressure to find a place to live will effect the local real estate market."


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