Yes Virginia, There is a Housing Bubble
Total madness. People lining up to buy a small box in the sky on a busy street next to a polluted waterway. Awesome!! Sign me up!
For the first time in three months, prices were down slightly from the month before in one of the six metropolitan markets surveyed, Montreal (−0.2%). This decline was not due to a deterioration of market conditions. According the Greater Montreal Real Estate Board, home sales were up from a year earlier in every month from May to October while new listings have declined. Toronto prices were up 1.5% from the month before, the smallest increase since the April bottom but still substantial. If October shows the same rise, Toronto prices will be back to their peak of August 2008. As for the other four markets, the September monthly rises were 2.1% in Vancouver, 1.1% in Calgary, 0.9% in Ottawa and 0.6% in Halifax.
The continuing 12-month deflation of the composite index (−1.8%) is attributable to three of the six markets: Calgary (−5.4%), Vancouver (−5.1%) and Toronto (−1.0%). In the other three markets, prices were up from a year earlier: Ottawa (3.4%), Montreal (2.9%) and Halifax (1.7%).
Teranet – National Bank House Price Index™
The historical data of the Teranet – National Bank House Price Index™ is available at www.housepriceindex.ca.
The Teranet–National Bank House Price Index™ is estimated by tracking observed or registered home prices over time using data collected from public land registries. All dwellings that have been sold at least twice are considered in the calculation of the index. This is known as the repeat sales method; a complete description of the method is given at www.housepriceindex.ca
Teranet - National Bank House Price Index™ thanks the author for their special collaboration on this report.
1 Value of Dwelling for the Owner-occupied Non-farm, Non-reserve Private Dwellings of Canada.
Over the last 12 months, the MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver increased 6.8 per cent to $553,702 from $518,668 in October 2008.
"While home prices have been rising in 2009, they have not eclipsed the peaks reached in early 2008," Scott Russell, Real Estate Board of Greater Vancouver (REBGV) president said. "We're coming off several months of unseasonably high sales levels, which has allowed for a gradual increase in home values this year,"
The REBGV reports that residential property sales in Greater Vancouver totalled 3,704 in October 2009, an increase of 4.1 per cent from the 3,559 sales recorded in September 2009, and an increase of 171.6 per cent compared to October 2008 when 1,364 sales were recorded. Looking back two years, last month's sales increased 22.3 per cent compared to October 2007 when 3,028 sales were recorded.
"High confidence and low mortgage rates are continuing to drive the activity we're seeing in the housing market today," Russell said.
New listings for detached, attached and apartment properties in Greater Vancouver totalled 4,977 in October 2009. This represents a 2.3 per cent increase compared to October 2008 when 4,867 new units were listed, and a 13.4 per cent decline compared to September 2009 when 5,764 properties were listed on the Multiple Listing Service® (MLS®) in Greater Vancouver.
At 12,084, the total number of property listings on the MLS® decreased 4.1 per cent in October compared to last month and declined 37 per cent from this time last year.
Sales of detached properties increased 201.6 per cent to 1,487 from the 493 detached sales recorded during the same period in 2008. The benchmark price, as calculated by the MLSLink Housing Price Index®, for detached properties increased 7.7 per cent from October 2008 to $749,808.
Sales of apartment properties in October 2009 increased 148.4 per cent to 1,607, compared to 647sales in October 2008. The benchmark price of an apartment property increased 6.3 per cent from October 2008 to $380,975.
Attached property sales in October 2009 are up 172.3 per cent to 610, compared with the 224 sales in October 2008. The benchmark price of an attached unit increased 4.6 per cent between Octobers 2008 and 2009 to $468,798.