By: Sam Reiss
The Toronto Real Estate Board reports sales of existing homes in the GTA fell more than 12% in August year over year, and the number of new listings fell 5.5%.
The average home price rose to $479,095, a leap of almost 6.5%, driven largely by detached homes. Sales of detached homes in the 416 fell 19% but prices rose 15%, to a whopping average of $746,300.
The Globe reports that between 35 and 40% of buyers make downpayments of less than 20%, which requires them to take out CMHC mortgage insurance, and it could well be changes announced by Finance Minister Jim Flaherty in July precipitating these drops. A decline in new listings is likely to mean further price increases, which continues to be particularly bad news for first-timers, especially those with designs on living downtown. It looks like downtown living will continue its trend toward becoming the purview of the wealthy.
On the condo front, sales of existing units in the downtown area fell 22% in August, pushing prices down 4% to $349,489. Sales in the highrise-heavy downtown core were down 34%. It’s not great news for condo investors or builders, but it may at least offer cash-strapped buyers a viable alternative. With a great selection of units available, prices looking to be flat if not down, and a big crash looking more and more unlikely, it’s a very good time to buy.
Global Property Guide (GPG), a website that offers insight into global property markets for residential investors, this month released a report on world housing market trends.
According to the report, there’s good news for the U.S. market, in which GPG says house prices were up a little over 1% year over year for the second quarter of 2012, compared to a decline of almost 9% during the same period last year.
It’s not as good for Europe, with big price drops year over year in Ireland, Spain, Greece, Portugal and the Netherlands, each of which is down more than 10% after inflation. The report says Poland and Cyprus also seem to be “slipping into the abyss.” Home prices fell in 15 of 22 European countries for which house price data was available.
Ireland was the biggest loser, with a nearly 17% year-over-year plunge in prices. The next eight weakest housing markets in the world were also in Europe.
Of a total of 39 countries world-wide for which quarterly house prices were available, prices fell in 25 and rose in 13. The US was the only country to post mixed signals.
Canada’s housing market was a strong performer year-over-year in the second quarter of 2012, with prices in our 11 major cities rising by more than 4%, compared to a rise during the same period last year of less than one half of one per cent. Canada posted a 62% increase in house prices from the first quarter of 2000 to the same period in 2008, and saw another 18% increase from the second quarter of 2009 to the second quarter of this year.
Asian markets are also feeling the global pinch. In Thailand, housing prices for single-detached homes including land fell 3.59% year over year; in Shanghai, China, 3.4%. House prices in Tokyo were down more than 2%. While Hong Kong saw a price hike of 3% in the second quarter over last year, it’s a far cry from the nearly 21% hike it saw for the same period last year over the year prior. Mild improvements were seen in Australia and New Zealand.
The survey’s best performer was Sao Paulo, Brazil, where prices surged 15.56% during the second quarter. With the World Cup due in 2014, and the Summer Olympics in 2016, it may yet be a good time to cash in on a hot Brazilian real estate market.Google+