No Drop in Sight for Canadian Home Prices
For three years the naysayers have gone on and on about the hard landing that awaits Canadaís housing market Ė but home prices are holding firm. From April to May home prices rose 3.6% while home sales grew by 3% compared with April.
Home sales are still slightly lower than they were in May 2012; with a 2.5% drop year over year, it wasnít the strongest month ever, but it was a good bounce back from the wild and wacky spring the Canadian real estate market has endured so far this year.
Home Sales are Snappy
CREA has been saying all year that the collapse isnít imminent, but letís face it, some people like to be negative. While five year interest rates did rise this week, itís just proof positive that the Canadian and American housing markets are beginning to diverge. Low interest rates are troubling over the long term because the Canadian market canít stay competitive hovering below 3.5% interest forever Ė if interest rates donít rise, the bond market wonít yield anything. Most know that the interest rate changes are coming down the pipe and are starting to get financing now.
Luxury Markets Doing Surprisingly Well
Even though the luxury market is cyclical, some of the largest price gains have been seen in luxury homes for sale. From fierce international competition for luxury real estate to homebuyerís lust for lux, people are willing to pay the premium to have something different.
Even with so many confused about just where the market is heading, itís great to see that people are still willing to get out there and take a chance. Luxury real estate is one of the few areas where people are still willing to go the extra mile.
Sale Prices are Up
Even compared with 2012, which was a great year, home sale prices are up, up, up. In Toronto for example prices hit were sitting at around $500,000, up a little over 5% compared with May 2012. Alberta and Prince Edward Island are expected to have a 3-5% jump in 2013, even with a late start to the season and Alberta seeing flooding this past spring. Prices are expected to halt their rise in the fall and winter months.
A Nice Recovery
Comparing the April 2013 numbers to April 2012 numbers, this year the market experienced a 38% drop Ė making the big gains seen in May an important factor for a healthy market. With more new homes being built as opposed to resales, it shows that the doom and gloom prognostications are far off the mark. Many developers have put new condo buildings on hold for now, so the condo market has seen a 33% drop as people either wait for projects to start up again or their condo to get built.
In the major metro areas luxury real estate is seeing a 5-7% jump, especially in Ontario and Alberta. Either way, sale prices arenít expect to dip for some time to come.
The Goodale Miller Team is based in Oakville, Ontario, specializing in luxury homes for sale, and is Canadaís #1 Century 21 team for 8 years running. †You can view their luxury homes for sale here: http://www.goodalemillerteam.com/Homes.aspx
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