Richmond Hill (Greater Toronto Area) Real Estate Still Hot, but What is Housing Market Outlook?

Submitted by Jasmina on Fri, 2007-08-24 01:08.

Resale home transactions in Greater Toronto Area reached unprecedented heights in the first half of August, up 17% from the same period in 2006. Richmond Hill was among the GTA areas with record MLS home sales activity:

  • This month, Detached and Condominium Apartment sales in South Richmond Hill (MLS district N03) fueled an overall increased of 41% as compared to the same timeframe a year ago.
  • Last month, transactions in Central Richmond Hill (MLS district N04) increased 77% over July 2006, due to a 100% increase in Attached / Row-House sales and strong performances in most other house types.

“The market has shown tremendous strength in recent months” said Toronto Real Estate Board President Donald Bentley. “Given that August sales have been brisk thus far and that the past four consecutive months have all set records, we are looking forward to a robust fall market.”

What Does Market Volatility Mean for Canadian Real Estate?

The meltdown of the US sub-prime mortgage market has some of my clients wondering if crisis will spread to Canada. I don’t think so. Our mortgage industry is healthy and real estate market will remain strong!

But don't take my word for it – read what economists had to say:

  • Benjamin Tal, an economist with CIBC World Markets
    Our view is that the price appreciation in the U.S. housing market over the last two years was, in many ways, artificial – boosted by aggressive lending and irresponsible borrowing.

  • Adrienne Warren, senior economist with Bank of Nova Scotia
    The buoyancy of Canada’s housing market is particularly impressive in light of the marked slowdown underway south of the border. Speculative investing in real estate in Canada has been less active, overbuilding less prevalent and high-risk lending less widespread. A consistently strong domestic job market and historically low mortgage rates are sufficient to maintain at least some forward momentum.

  • Jim Murphy, president of the Canadian Association of Accredited Mortgage Professionals (CAAMP)
    The market here is much healthier, the lenders are more prudent in terms of their approval process and Canadians are just more conservative in terms of their products.
    1. Sub-prime market makes up five per cent or less of all outstanding mortgages in Canada, while in the U.S., the market is closer to 20 per cent.
    2. The overall arrears rate on mortgages in Canada is at or near record lows of less than 0.5 per cent.
    3. Canada's market, with the exception of pockets, primarily in Alberta, has not experienced the rapid home-price appreciation or speculative investing that has been endemic in the U.S.

  • Doug Porter, a senior economist with BMO Capital Markets
    If anything, the turmoil might actually, possibly, lead to lower interest rates than would have otherwise been the case.

  • Gregory Klump, The Canadian Real Estate Association (CREA) Chief Economist
    Resale housing activity was a juggernaut in the second quarter of 2007; Record breaking sales activity in the first and second quarters forced The Canadian Real Estate Association to revise its forecast upward.

Summary of CREA's MLS Residential Sales Forecast

National home sales are forecast to rise by 8.1 per cent to 523,100 units in 2007, and will set new annual records in most provinces. Activity is forecast to edge slightly lower in 2008, but will reach the second highest annual level on record in almost all provinces.

Prices are forecast to set new records in every province this year and in 2008, but price increases will be smaller next year. In Ontario, MLS residential average price increased in 2006 by 5.9%, will raise by 8.6% in 2007 and by 4.8% in 2008!

For more questions or advice on your Real Estate needs, feel free to contact Jasmina – your Real Estate Agent for York Region & Toronto Area.