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Slight increase in Home Prices?

Posted On: 2009-12-02

According to the Statistics from the Central Okanagan Mainline Board, average residential home sale prices in the Kelowna area were up 8% in October 2009 from the same month last year.  We have a smaller inventory this year and the sales were up by 136% from October 2008.  Both Townhouses and Condos also saw an increase in the average sale prices for October 2009 compared to October of 2008. Check out the article below for more information about other real estate markets in Canada.


Decline in home resale prices continues to slow
Financial Post November 25, 2009
OTTAWA — The days of bargain home ownership may soon be over in Canada.
Mortgage rates are edging higher, there are fewer homes to choose from, and prices are rebounding from their recession lows.
At the same time, the cost of maintaining a home once you've purchased it is also creeping up.
Resale home prices rose 1.3 per cent in September, the fifth month in a row that prices increased from the previous month, according to the Teranet-National Bank house price index released Wednesday.
The September rise "was the smallest in four months but still vigorous," said Marc Pinsonneault, senior economist at the National Bank Financial Group. "The vigour is consistent with an improvement in market conditions over 2009 to date — more homes have been selling and fewer have been coming on the market."
Prices were up from August's figures in all but one of the six metropolitan markets surveyed. Montreal's prices fell by 0.2 per cent, even though home sales in that city are on the rise.
Pinsonneault said Toronto, where prices slid one year cent year-over-year, is on the verge of a full recovery from the economic downturn. If prices there rise as much in October as they did in September — 1.5 per cent —they will be back to their peak of August 2008.
"On balance, there was broad-based strength in this report, which is consistent with other measures of the Canadian housing market," said TD economics strategist Ian Pollick.
Meanwhile, the proportion of pre-tax household income needed to maintain a home rose in the third quarter of this year for the first time since the spring of 2008, and across all housing types, according to a report by RBC Economics Research.
The costs of owning a typical detached bungalow increased one per cent to 40.2 per cent from the previous quarter, the report said. A standard townhouse rose 0.7 per cent to 32.3 per cent, while a regular condo edged up 0.5 per cent to 27.6 per cent and a standard two-storey home increased 1.2 per cent to 45.8 per cent.
"Home affordability deteriorated in all provinces and major markets in Canada due to a slight rise in key mortgage rates and appreciation in property values," Robert Hogue, RBC's senior economist, said Wednesday. "Despite this increase in home ownership costs, affordability measures have still shown improvement from a year ago."
RBC said an average detached bungalow — the benchmark measurement — works out to 66.8 per cent of pre-tax household income in Vancouver, 48.6 per cent in Toronto, 39.2 per cent in Ottawa, 37.5 per cent in Montreal and 36.7 per cent in Calgary.
"With such strong momentum in the housing market and the cyclical low in mortgage rates behind us, it seems unlikely that affordability will improve in the near future," Hogue said.
"The housing market still faces obstacles, as mortgages have become more difficult to handle for many Canadians amid challenging labour conditions," he said. "This is likely to persist until the economic recovery is well established and job creation is sustained next year."
Home ownership costs include mortgage payments, utilities and property taxes.
• Housing resale prices in September (% change from August / year ago):
Calgary +1.1 / -5.4
Halifax +0.6 / +1.7
Montreal -0.2 / +2.9
Ottawa +0.9 / +3.4
Toronto +1.5 / -1.0
Vancouver +2.1 / -5.1
National +1.3 / -1.8
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