Thomson report

The current strength of housing demand stands in sharp contrast to the weak activity recorded a year ago. Existing home sales activity remains upbeat with 109 residential single-family homes selling in December of 2009, up 65% over December 2008’s figure of 66. Townhouse sales are also up 100% over December of last year with 30 sales recorded in 2009 over 15 sales in 2008.
Condo sales lead the pack however, with a 155% increase in units sold during December of each year - 56 in 2009 over 22 in 2008.

When the numbers are accumulated for the entire year, the picture changes somewhat. Year to date figures indicate the residential market is up nearly 10.5% with 1943 sales in 2009 over 2008’s number of 1759.

Townhouse sales indicate the strongest jump showing close to 33.5% increase in units sold from 562 in 2009 over 421 sales in 2008. Although condo sales were up in December over last year, the year to date sales is down just over 5.5%, 769 condos selling in 2009 compared to 815 sales in 2008.

Are prices going up or down? That is typically the question on the tips of everyone’s tongues. The average price for residential properties decreased nearly 9% from $460,077 over last year’s price of $505,257 and the median price dropped slightly over 10% from $425,000 in 2009 compared to 2008’s median price of $473,000.

While the figures indicate a decrease in home prices, you have to look carefully at different segments of the market to see what’s actually happening. Some of these market segments are very strong and there is upward pressure on price, and there are other segments of the market that are inactive and there is downward pressure on price.

See the residential sales YTD shown below to see price segment comparisons from last year to 2008. It is clear that the strongest area for the market for 2009 was in the homes with sale prices below $500k.

(Rob Marak Royal LePage Realty)


Price 2009/2008 +/-

$280K - $320K 126/ 42 +200%
$320K - $360K 252/102 +147%
$360K - $400K 323/218 + 47%
$520K - $560K 121/169 - 28%
$560K - $600K 94/130 - 28%
$600K - $1M 225/297 - 24%
$1M & Over 23/ 30 - 25%

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From a national perspective, Finance Minister Jim Flaherty says he's watching the country's hot real estate market closely, and may impose measures to make it harder for Canadians to obtain a mortgage. Flaherty stated "If we see further evidence that there is excessive demand in the housing market or that there's an indication that people are taking on obligations that they will not be able to handle in the future when interest rates rise, then we will take some action."

He added that he's considering a few different options to cool down the housing market if it's deemed necessary. "The likely action we will take is to increase the size of the down payment from 5 per cent to a higher number, reduce the amortization -- bring it down from 35 years to something less," he said.

Such measures would make it more difficult for Canadians to obtain a mortgage and buy a home, without having to increase the prime interest rate.

This will likely have the effect to cause would-be buyers to consider making a purchase sooner, rather than being required to raise more funds for a down payment and/or postpone their purchase indefinitely.

Earlier this month, Royal LePage Canada released data and a forecast showing that we should expect to see continued gains in the Canadian real estate market through the first half of 2010 generally supported by increasing consumer confidence and continued lower interest rates.

A few more stats:

Average House Price in Dec. 2009 $ 469,515
Median House Price in Dec. 2009 $ 438,500
Number of houses listed last month: 180
Number of lakeshore homes sold last month: 5
Average Mobile Home Price: $ 106,983
Dollar value of sales in Dec. 2009 $108,745,576
Dollar value of sales in Dec. 2008 $ 48,835,116