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Showing posts with label Ontario. Show all posts
Showing posts with label Ontario. Show all posts

July 12, 2011

Canadian Housing Bubble Or An Exception To The Rule

Hi Folks,

   Happy Wednesday and glad to have you back.

   We live in a Global Economy that literally synchronizes over time, and the Economy of each country has an effect on the others. As a subset of the Economy of any given country, there exists the Housing/Real Estate Market. Today, I'd like to take a look at Canada, our Neighbors to the North. In future editions, we will look at other Countries as well.

   "Looking at Canada in general, I don't see any bubbles", says Colette Gerber, a Division Director for the Real Estate Board of Greater Vancouver. "With respect to Vancouver", says Gerber, "real estate in this city is a hugely hot commodity." She admits that many people believe Vancouver "is a bubble waiting to pop", but she disagrees because, "Vancouver is geographically constrained with mountains and water preventing the city from being able to spread out. Vancouver continually ranks as one of the most desirable and most livable cities in the world. With a finite amount of land available and such a high demand to live in Vancouver, prices in this city will always rise."

   In Ontario (includes the Capital of Ottawa and the largest city of Toronto), Gerber says that, "housing will always be in demand because the majority of corporate offices are headquartered in that province."

   In terms of the province of Alberta, which encompasses the major cities of Calgary and Edmonton, Gerber says the major cities in Alberta "have seen an increase in activity as more jobs are made available in the province's main industry, the oil fields.", however, she points out that this "isn't a bubble", but it is "normal economic activity."

   In a recent article in the Calgary Herald, titled, "Calgary housing prices expected to rise", by Mario Toneguzzi, he author cites a housing price survey (The Royal LePage House Price Survey and Market Survey Forecast) that says "Calgary's residential real estate market has experienced a "modest" year-over-year decline but prices are expected to rise in the second half of the year, and adds from this report that, "detached bungalows have witnessed the largest year-over-year price decreases in the resale market", followed by standard two storey homes, and then standard condominiums.

   In a quote from the story in the Calgary Herald, Ted Zaharko, broker and owner of Royal LePage Foothills, stated that "Real estate activity in the Calgary market is down slightly year-over-year (and) at the moment there is not a sense of urgency to purchase", but, "With low interest rates, a strong economy and a healthy energy sector, Calgary's real estate market should start to pick up in the latter half of the year". Further, as Toneguzzi write, "According to Royal LePage, the average year-over-year house price in Calgary is forecast to climb 3.8 per cent in 2011, while sales are expected to decrease two per cent." The President of CREB, Sano Stante, said in the same article that, "Improved job prospects, combined with an increase in the number of people moving to Calgary, will give lift to our housing market for the remainder of this year and into the next."

   So, what can we summarize about the Canadian Housing "Bubble" (or lack thereof)?

   "Definitely no bubble for Canada as a whole, just regular economic cycles of supply and demand", says Gerber. Additionally, per Kelvin Mangaroo, President of RateSupermarket.ca; "The Canadian Housing Market did not take as much of a hit as the US did", and adds that, "house prices in Canada are now back up to pre-recession levels after only two years.".

   Mangaroo cautions that with Canadians taking on more debt and interest rates still at record low levels, "when rates do increase (which they ultimately will) many homeowners will feel the pinch and the Canadian Housing Market is bound to dip."

   Are you a Canadian Homeowner, Canadian Real Estate Investor, Agent, or a Canadian Real Estate professional? We'd love to hear your thoughts on the topic.

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Have a Great Week, and Happy Rent-to-Owning !
Rob Eisenstein
HomeRun Homes Blog: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com

TAGS: #CanadaRealEstate #HousingBubble #Vancouver #Ontario #Toronto #Alberta #Calgary #Edmonton