Bullish outlook for real estate

Residential real estate sales should recover in almost all major Canadian cities by the end of 2009, while average prices should post new records in an improved economic climate, according to a new housing report.

The Re/Max Housing Market Outlook survey for 2010 predicts the uptick in sales will be lead by an anticipated 45 per cent increase in Greater Vancouver, while Ottawa and Quebec City are expected to hit historic highs in the number of homes sold.

The report also says average prices are expected to improve in 65 per cent of markets as economic performance picks up.

Eighty-three per cent of markets are expecting sales to increase over 2009 levels while housing values are predicted to rise in 91 per cent of Canadian centres in 2010. The remaining markets are predicted to match 2009 levels.

The average price of a home is also expected to go up in the future, rising two per cent to $325,000.

The Re/Max report examined residential real estate trends in 23 markets.

Mississauga — The Canadian PressPublished on Thursday, Dec. 03, 2009 9:07AM ESTLast updated on Thursday, Dec. 03, 2009 10:42AM EST

This article was originally published in the Globe and Mail online December 04, 2009

One more year of strength in the housing market

Thanks to Steve Ladurantaye, of the Globe and Mail, for the following article

Globe and Mail Update Published on Tuesday, Dec. 01, 2009 10:10AM EST Last updated on Tuesday, Dec. 01, 2009 7:00PM EST

A recovery in the Canadian housing market, which was “as V-shaped as you can be,” has been based on fundamentals, although TD Economics warns that things could get carried away if the recent enthusiasm continues.

Sales and average prices have recovered from the recession, with each 5-per-cent higher than their previous peak set in late 2007 as of the end of October. Prices had pulled back 12 per cent through the recession.

“Viewing this sharp two-year cycle as a blip is misleading,” the bank's economists wrote in a report Tuesday. “The price adjustment in the downturn was partly warranted by fundamentals, which leaves the current market value in a state of mild over-valuation similar to that of late 2007.”

The economists concluded current prices were not too high, but they did warn that “current market momentum has the potential to lead to significant price overshoot.”

The next year should see the market transition to a more balanced situation, with higher prices drawing more supply. And as houses become more expensive, fewer will be willing to engage in pricey bidding wars.

“By 2011, housing and the overall economy will experience role reversal,” they concluded. “While the economy will strengthen, resale housing market conditions will weaken.”

Addendum from Ross Taylor

The above view of housing prices dovetails with the prevailing view that interest rates have at most one more year at these very low levels. If and when rates rise, this will dampen the enthusiasm of many home buyers.