Home sales jump in April

Jeff Evans

I saw this article today on The Globe and Mail website:


It is another article giving a good indication of an upward trend on home sales and prices. Those who have recently purchased or moved up would be looking to be in a much stronger position now. I imagine that news like this will cause buyers to come into the market fairly quickly, and as long as rates stay at historically low levels, that more people will be getting out to buy. I have been hearing of multiple offer situations on properties lately. Below is the article for your viewing.


Globe and Mail Update

OTTAWA — Home sales soared in April for the third month in a row, but the real estate market has not yet made up for all the lost momentum of the past year, the Canadian Real Estate Association says.

Sales of homes in Canada, seasonally adjusted, jumped 11.2 per cent in April compared to March, the largest month-to-month increase in more than five years, CREA said. The gain compounds advances of 10.3 per cent in February and 7.7 per cent in March.

Home sales volumes were a full 32 per cent above January’s levels – the lowest levels in a decade.

“Simply put, this was a very strong housing market report,” said Millan Mulraine, economics strategist at TD Securities. “It is suggesting that the worst of the correction in the Canadian housing market may be behind us, and that the housing sector may be on the mend.”

Prices are still lower now than a year ago, with the average sale price in April at $306,366 – about 3.2 per cent lower than April, 2008, when prices hit their pre-recession peak.

Indeed, economist Derek Holt at Scotia Capital Inc. doubts the month-over-month momentum can be sustained, mainly because the surge this spring is a result of unfulfilled demand from last winter and borrowed demand from the future.

Activity is strong now partly because no one was buying late last year when housing markets in Canada stagnated, he said.

Going forward, Canada is likely in for more deep job losses, which will hurt housing. And while extra-low mortgage rates and 35-year mortgages are spurring buying right now, those rates are poised to spike much higher in the coming years.

For now, though, the gains were widespread.

The volume of homes trading hands rose in 70 per cent of local markets in April, compared to March, CREA added. In particular, Toronto saw a 10 per cent increase, Vancouver’s sales rose 30 per cent, Montreal was up 15 per cent and Calgary was up 31 per cent.

Still, compared to a year ago, home sales in Toronto were 10.5 per cent lower, Vancouver was off 17.4 per cent, Montreal was down 4.3 per cent and Calgary was 21 per cent lower.

The only cities showing a year-over-year increase in sales were Kitchener-Waterloo in southern Ontario, and Ottawa.

The key to the substantial increase in sales in the past few months is a growing realization by sellers that pricing has to be realistic, said Dale Ripplinger, a real estate broker based in Regina and also the president of CREA.

“Price adjustments in some markets have helped affordability. Second, lenders do have money for people and properties that qualify, although some are being more stringent.”

A recovery of consumer confidence has also helped boost sales in the housing market, he said.

Lower mortgage rates are also a big factor, added Mr. Mulraine.

“It appears that home-buyers are taking full advantage, despite the bad economy. And this is certainly encouraging,” he said in a note to clients.

Also encouraging a more stable housing market is a continuing decline in the supply of homes coming on to the market, CREA noted. New listings in April (seasonally adjusted) were 1.8 per cent lower than in March, and 16.4 per cent lower than the peak of May, 2008.

The spring housing market has been more active than CREA had anticipated, prompting a small upward revision to its forecast for sales for the rest of 2009.

For 2009, CREA now expects sales to fall 14.7 per cent to 307,500 homes – slightly less than in its last forecast issued in February. Stronger-than-expected rebounds in British Columbia and Ontario were the drivers behind the revision, CREA said.

2010 should bring a 7.2 per cent increase in sales – a slightly weaker rebound than in previous forecasts because of downgraded expectations for economic growth next year. The rebound is expected to be strongest in British Columbia and Alberta.

CREA economist Gregory Klump said he expects national average prices will rebound slowly from the low reached in January, and begin to post modest year-over-year increases during the fourth quarter of 2009.

Author: Jeff Evans

I am a mortgage broker, hair salon owner, squash player, student, and husband, aspiring to do good for people.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Related Articles

Vancouver mortgage broker with “lower” fees
Jeff Evans
No Comments

I have had a in interesting case with a returning client who came to me recently for help with his mortgage.  As a mortgage broker in Vancouver, it is necessary to be creative in making solutions work for my clients, which currently can often involve secondary or private lending solutions.  This was a case where such creativity would be necessary.Read More

home buyer mortgage broker
First Time Home Buyers Mortgage Broker Tips And Tricks
Jeff Evans
No Comments

Among the services I provide to my clients, I consider myself to be a "first-time home buyer mortgage broker".  As a first time home buyer mortgage broker, I know how difficult it is to get into the real estate market, particularly in Vancouver, and it brings me a particular amount of job to help someone get past the challenges if being a first time home buyer.

I have recently completed an e-book and will be launching it soon.  I believe it will be very helpful for not just first-time home buyers, but for anyone who is not as knowledgeable in residential mortgage lending, about how to make your home buyer mortgage broker application appealing to a mortgage lender.

As a sneak preview, here are three tips on improving your mortgage application as a first-time home buyer.

3 Home Buyer Mortgage Broker Tips

  1. Take advantage of the home-buyers plan to fund your down-payment.  This program is not technically ONLY for first-time home buyers, but all first-time home buyers are eligible.  Under the plan, you can borrow up to $25,000 from your RRSP for the purchase of an owner-occupied residence.  If you and your spouse are both applying, then you can withdraw $25,000 each. It is a loan, so it has to be paid back over 15 years (or 1/15th of the loan will be added to income for that year).  However, there is no withholding when you withdraw it, it does not have to all be declared as income on any given year, and you don't even have to use all of it for down-payment!  You can use it for any purpose that you need it for. A good mortgage broker, like myself, can help you with some of the finer details and complex situations that often arise from these situations.
  2. Make sure you pay your bills on time. If you have a high balance on your loan, or you have a lot of debt, those also have a significant negative impact on your credit score, but you can get the bills down and there is no record of your high debt levels.  However, when you miss a bill payment, it stays on your credit bureau for 6-7 YEARS.  This not just negatively impacts your credit score, but lenders look at this when assessing risk, and they have been particularly uncompromising and (unreasonable, paranoid, strict...and other words that I cannot put in print) in the last few years.  While you likely do not have to wait 6-7 years to become bankable if you have had gone through a period of bad credit, the less negative credit on the bureau, the better. At least make the minimum required payments and you will go a long way to making yourself appealing to them.
  3. Having no credit is just as bad as having bad credit. Many people feel that not requiring credit should prove your ability to pay your bills and should be good evidence of credit-worthiness.  This is not how mortgage lenders think.  If you currently do not have any credit, then you do not have any documentation that you are an acceptable credit risk, and no matter how strong your income is, you will have difficulty obtaining a prime mortgage approval.  Make sure you have at least 3 different credit facilities in your name.  (Secondary credit cards in a spouses name are not considered acceptable for establishing your credit).

I am excited to launch my home buyer mortgage broker e-book soon, in which I go into much greater detail and give many different ideas to help home buyers prepare for home ownership, but as a mortgage broker in Vancouver, you are welcome to contact me in the meantime to discuss your circumstances and see if there are any options for you.

mortgage broker Vancouver BC
Good news regarding OSFI rule changes
Jeff Evans
No Comments

This is just a quick note to let viewers know that IF you are one of the people with 20% or more down-payment and are in a position that the new OSFI rule changes affect your pre-qualification, that I can extend the current guidelines into the new year by up to 120 days provided that I have an application and am able to get a pre-approval in place with a lender for you before January 1.Read More