If you have been following our previous blogs you know that we try to stay on top of what is happening in the Real Estate market not only here in Victoria but all of Canada and sometime even other parts of the world. As you know our predictions a year ago was that the Canadian Real Estate market will remain strong with record breaking prices and volume sales.
Our predictions for the end of 2008 is an average selling price of $650,000 in the Greater Victoria Real Estate boundary for a single family dwelling. We predicted that the end of 2007 would come in around $600,000 and last november was around $597,000.
We have further written in our blogs that the US Sub Prime issue will not effect the Canadian economy, and we still think this is the case. A recent article in the Times Colonist by Eric Beauchesne of CanWest News Service looks into the troubled real estate market south of the border and confirms our predictions. It reads:
Gap between U.S., Canada widens
Sales south of border fall nine per cent in November to lowest level in 12 years
OTTAWA — The widening divide between the Canadian and U.S. housing sectors continues, according to reports from both sides of the border yesterday showing the U.S. housing market sinking deeper into recession, while the Canadian housing market continues to shatter records.
Here, the Canadian Real Estate Association reported that sales of existing homes in Canada in the first eleven months of 2007 had already surpassed all previous annual totals to reach nearly half a million.
Some 496,890 homes traded hands by the end of November, up 2.7 per cent from the previous annual record set last year, with new annual records reached in every province except British Columbia and Alberta, it said.
Sales in November were 6.1 per cent higher than a year earlier, and once adjusted for seasonal ups and down, also rose by 1.6 per cent from October, reflecting increases in Alberta, British Columbia, Saskatchewan, Ontario, and Newfoundland and Labrador.
The average price of a home was also up 11.7 per cent from a year earlier to $313,645, the seventh straight month of a double-digit increase from a year earlier, with new record highs for the month being set in British Columbia, Saskatchewan and Quebec, and just below record levels nationally and in Ontario.
Overall sales are expected to ease in 2008, and the increases in prices, while still hitting new highs, is expected to moderate, said association president Ann Bosley.
“Resale housing activity next year will recede from this year’s breakneck pace as further price increases dent affordability,” said association chief economist Gregory Klump. “Interest rates may edge slightly lower and household incomes will continue rising, so … home sales activity in 2008 is forecast to be the second highest on record.”
In the U.S., in contrast, already deeply depressed sales of new homes continue to sag, falling nine per cent in November from downwardly revised levels for the previous three months and to their lowest levels in more than 12 years.
“And yet, there still seems to be no bottom in sight,” noted BMO Capital Markets economist Michael Gregory.
“Housing demand is unlikely to stabilize until homes prices stop dropping, but home prices are unlikely to stabilize until housing demand significantly reduces the inventory overhang,” Gregory said. “This is a vicious circle that has pushed homebuilders’ confidence to record … lows in the fourth quarter and points to a deepening housing downturn to start 2008.”
The growing fears of recession in the U.S. combined with evidence of domestic economic strength in Canada, meanwhile, helped fuel a further rise in the value of the loonie, which hit a high of $1.025 US before easing to close at $1.0198 US, up a fifth of a cent from Thursday’s close of $1.077 US.
But even before the housing report, the loonie was gaining ground on the depreciated greenback, bolstered by higher prices for key commodities that Canada exports, including both oil and gold, prices of which have been pushed higher by political tensions following this week’s assassination of Pakistani opposition leader Benazir Bhutto.
The higher commodity prices, plus the widening housing gap were reflected in the day’s performance of the benchmark U.S. and Canadian stock market indexes, with Bay Street’s TSX posting a triple-digit gain, while Wall Street’s Dow Jones Industrial Index ending the day relatively flat. End of Article.
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Happy Holidays, Anders
Anders Treiberg, Associate Broker, REALTOR®
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