Notable News of the Week: August 16, 2013
Canadian home prices hit all-time high in July – Financial Post
Canadian home prices rose over the last month and reached an all-time high in July. Although home prices reached a new level, those prices only rose 0.7 per cent from June, which is considered a low monthly gain for a summer month. Overall, the home price index is up 1.9 per cent from a year ago. These figures indicate that the Canadian housing market has rebounded well since the government induced a housing slow down last July. Mazen Issa, Canada Macro Strategist at TD Securities, believes that further upside in prices is limited. He thinks that the recent rise in mortgage rates will reduce housing affordability, which should slow sales and limit price increases into 2014. Year-on-year prices only dropped in two Canadian cities: Vancouver and Victoria. The largest year-on-year price increases occurred in Hamilton and Calgary.
B.C. home sales hot in July, highest number in eight years – Vancouver Sun
British Columbia home sales rose significantly in July, and by month end it was the strongest July in eight years. According to the Multiple Listing Service (MLS) there was a total of 7,650 residential sales in July, 18 per cent higher than July the year before. In addition, the average MLS price in the province this July was $534,360, 12.5 per cent higher than July 2012. Economist Cameron Muir explained that, “After six consecutive months of rising consumer demand, it’s now clear that B.C. housing markets are recovering from tighter lending regulations introduced last year”. Vancouver led the way with MLS sales of 2,946 in July, an increase of 11.5 per cent from the month before. Compared to July 2012, the Vancouver MLS sales figures were up an incredible 40.4 per cent.
Canadian housing boom in ‘9th inning’ – CBC News
The Canadian housing market continues to send out mixed signals, causing confusion amongst analysts who are struggling to interpret some of the results. Home prices and starts are pointing to the soft landing that homeowners are hoping for, but other statistics such as land purchases and building permits suggest otherwise. Statistics Canada reported last week that residential building permits fell 12.9 per cent in June. Residential land investments for future home building plunged in Toronto, Vancouver and Calgary by 51, 52 and 30 per cent respectively. Some analysts and consumers feel comfortable with the current market, as prices have remained fairly steady. David Madani of Capital Economics, however, feels less assured about the situation. “It’s astonishing to me that people are not picking up on this. If you see volumes crash and prices still rising, you shouldn’t be thinking everything is fine, you should see that as a warning sign.”
A look at current mortgage interest rates and 5-year mortgage rate history.
The average discounted mortgage rates in Canada in 2013:
A history of weekly 5-year fixed mortgage rates and 5-year variable mortgage rates.
