Canada Housing: Correction vs. Bust – Let the Finger Pointing Begin

One doesn’t have to be an expert in the real estate
market to grasp that there’s something different in the market today.
Call it what you will, a sense, intuition or just plain old gut feel but
there’s little doubt that things are changing.  The only question that
remains is the degree of change?

Here are the facts as we know it:

  • Home sales have dropped month over
    month by 5.8%, which is the biggest monthly drop in two years
  • Number of newly listed homes is down
    1.7% month over month
  • Greater Vancouver Real Estate Board
    states that re-sales were down 30.7% as compared to August 2011.
  • Toronto Real Estate Board states
    re-sales were down 12.5% as compared to August 2011
  • According to the August 2012 CMHC
    quarterly report, second quarter insured mortgages unit volumes were down 25%

 

Indeed, things are different today.  The data speaks for itself, and the debate
today has been reduced to correction versus bust.

Click Here to read the full story.

Realtors cry foul over MLS criticism.

Misinformation and stereotypes are painting an inaccurate picture of real estate agents’ use of the Multiple Listing Service, according to Realtors.

“First of all there is no monopoly on access to the MLS,” said Ed Novack, real estate broker with Caldwell Banker in Toronto. “You don’t need to be a member of CREA to access the system, anyone can view it.”

Novack also took exception to comments that Realtors rely on exclusive use of the MLS to be able to collect from their clients, fees as much as 5 per cent.

“I would like to meet these Realtors who are regularly charging 5 per cent, because the typical fees are somewhere around 3 percent to 3.5 per cent and everything is negotiable,” he told MortgageBrokerNews.ca.

The Realtor community yesterday expressed strong reactions concerning the MLS after MBN posted a story about brokers supporting the opening up of the MLS.

Novak said the public is “being fed misinformation and stereotypical portrayal” of Realtors mostly by business that stand to profit from the loosening of industry control over the MLS.

He pointed out that non-realtors are able to access the MLS and view information on listed properties on the site and their current selling prices.

“The only data that is not open to the public is the seller’s name and address and previous sales history of the property,” said Novack. “Because of privacy regulations and safety precautions we can’t make personal information public. As for other information such as area market prices, people can get this free from a lot other Web sites.”

“I believe data in the MLS should be considered proprietary information,” said David Larock, broker at The Mortgage Group – Integrated Mortgage Planner in Toronto. “The Realtors built the system and gathered the data, so they are within their rights to exercise control over it.”

Larock also disagrees with the assessment of other brokers that Realtors’ fees are heavily dependent on restricting access to the MLS.

“Top-notched Realtors are worth their weight in gold,” he said. “I don’t share the view that opening up the MLS will automatically result in a drop of Realtors’ commissions.”

He said Realtors assist clients with many aspects of a home buying or selling transaction that goes far beyond having a property listed in the MLS.

Ottawa real estate market falls sharply in August

OTTAWA — Real estate sales in Ottawa fell dramatically in August as the threat of layoffs from the federal government continued to affect consumer confidence.According to the Ottawa Real Estate Board, 1,141 properties were sold through its Multiple Listing Service, a drop of 14.1 per cent over the same month a year ago when 1,398 resale homes were sold.

In July, more than 1,366 re-sale homes were sold.

Canadian rates could rise ‘well before the end of 2013′: report

There are signs Canadians are listening to the urging of government and regulators to get household debt under control, and the Bank of Canada could respond by raising interest rates “well before the end of 2013,” according to a report released Friday by Moody’s Analytics.

“Should a stronger and more sustained improvement in economic growth commence, it will not likely be met with continued monetary accommodation. We expect the bank to start raising rates well before the end of 2013,” said the report written by Bodhi Ganguli, an economist on the international team at Moody’s Analytics.

The Bank of Canada held its benchmark rate at 1% in September, but, unlike the U.S. Federal Reserve, it has not hinted at further economic stimulus or pledged to hold rates at their current record lows through the end of 2014.

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“With GDP growing broadly in line with the projections, the [Canadian central] bank remains relatively bullish on Canadian domestic demand,” noted the report by  Moody’s Analytics, which is a sister company of the global ratings agency.

While it is still early days for the latest moves by Ottawa to cool demand in the country’s hot housing market and persuade Canadians to reduce household debt levels that far outstrip disposable income, there are signs restraint may be taking hold, according to Moody’s Analytics.

Following two months of strong growth, the number and value of Canadian building permits fell in July. On a seasonally adjusted basis, permits dropped 4.9%.

“While a single month’s data do not prove a trend, July’s numbers could signal slower growth in Canadian housing as builders respond to diminishing demand,” said the report, which notes that its commentary produced by Moody’s Analytics is independent and does not reflect the opinions of credit ratings agency Moody’s Investors Service Inc.