Prices for homes rose in most of Canada for the second consecutive month in January, according to the Teranet-National Bank Composite House Price Index released Wednesday.

The index showed prices were up 0.4 per cent during the month, compared to a 0.3 per cent increase in December.

Two laggards however, were Ottawa and Calgary, where prices dropped for the fifth straight month.

Ottawa was down 0.6 per cent, and Calgary prices fell by one per cent in January, the fifth decline in six months.

Economists had expected the national index, which measures price changes for repeat sales of single-family homes in six metropolitan areas, to rise 0.1 per cent in January.

The two months of gains follow on three months of prices that were declining.

"Thus the correction of late last year turned out to be short-lived for the country as a whole," said, National Bank senior economist Marc Pinsonneault, who was author of the report.

On a year-over-year basis, the index also showed prices were up 3.9 per cent in January from the same month a year earlier -down from a 4.1 year-over-year increase in December and marking the seventh consecutive month of deceleration.

January Home Price Index

Area Monthly % Change Calgary -1.0 Halifax +0.4 Montreal +0.3 Ottawa -0.6 Vancouver 0.9 National composite 3.9 © The Financial Post
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See the top 10 list of most prosperous cities.

Calgary has moved up the Toronto Board of Trade's annual measure of prosperity among world cities, jumping to third place from fifth last year.

The report said the "robust economy'' in Calgary helped attract workers, had the fastest growing population of all the cities on the list, the highest income growth and the second highest GDP growth behind Hong Kong.

Calgary was also noted for "housing affordability and clean air."

Of the four other Canadian cities that made the list, Toronto, Montreal and Vancouver didn't fair so well.

Toronto fell four spots to No. 8 and Vancouver dropped to 14th from 12th. Montreal declined to 20th from 15th, however, Halifax rose to 17th from 20th.

Assessing economic performance and livability, the ranking report - done with the Conference Board of Canada - said issues such as low productivity and long commute times hurt both Vancouver and Toronto's rankings in this report, meant to compare the standing of Canada's biggest city with other major centres around the world.

"With decent employment growth, and a good high-tech and professional - employment sector, Toronto's problems stem more from under-investment in productivity-enhancing machinery and equipment,'' the report said.

As well, the average 80 minutes of commute time (round trip) for Toronto was ranked the highest of the 24 cities measured.

Vancouver ranked lower in the economic factors included in the rankings. The city ranked 18th overall economically out of the 24 cities being compared. While Vancouver's labour attractiveness finished higher at 8th, its transportation commute times, infrastructure and ridership was abysmal when compared to the 23 other cities, finishing at 21st (ahead of only Sydney and Halifax).

The top spot overall was Paris, which was praised for its highly educated workforce, good air quality and low homicide rate.

© Copyright (c) Postmedia News
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Foreign buyers juice resale housing market STEVE LADURANTAYE — REAL ESTATE REPORTER Globe and Mail Update Published Tuesday, Mar. 15, 2011 6:20PM EDT

Wealthy buyers in Toronto and Vancouver are propping up the Canadian resale market, as their toughly fought multimillion-dollar bidding wars push prices higher even as sales of more ordinary homes slow across the country.

The high-end market has been driven by foreign buyers looking to park their money in Canada. Chinese and European buyers, attracted by the country’s steady market, its trading relationship with their home countries and a welcoming education system, have been filling a gap left by cautious Canadian buyers

CALGARY - Overall residential MLS sales and average prices rose in Calgary in February, according to the Canadian Real Estate Association.In data released Tuesday, CREA said Calgary sales, which included all residential properties, were 1,917 for the month, up by 0.2 per cent from a year ago.

The average MLS sale price was $400,879, an increase of three per cent from February 2010.

Sano Stante, president of the Calgary Real Estate Board, said the local real estate is currently fairly strong - fairly buoyant.

"We're just starting to see some job growth in Calgary and a lot more consumer optimism," he said. "So we have seen an increase in sales over last year year-to-date but mostly in the lower-priced properties which indicates that first-time buyers are moving into the market which provides us with a base of sustainable growth this year.

"When first-time buyers come into the market it provides the fuel for sustainable growth for a market comeback and that's what we're starting to see. We're building the foundation of this comeback in the market."

Stante said there has also been an increase in the number of listings which is moderating the average sale price.

"We still have an abundance of listings. Sales are healthy but the average price is not going to increase because the increased number of listings is keeping the price in check," he said.

Nationally, CREA said sales dropped by 5.9 per cent to 34,093 transactions but the average sale price rose 8.8 per cent year-over-year to $365,192.

"The average price has been skewed higher nationally and in British Columbia recently by a record number of multi-million dollar sales in a couple of areas in Greater Vancouver," said Gregory Klump, CREA's Chief Economist.

"When you take Vancouver out of the equation, the year-over-year increase in the national average price drops to 3.4 per cent. While that's still stronger than in the past six months or so, national average price gains may recede after tighter mortgage regulations take effect in March."

Doug Porter, deputy chief economist with BMO Capital Markets, said Canada's housing market looks to be moderating again, although prices are holding up well.

"Tighter mortgage rules and reduced affordability will weigh, with rising global uncertainty also potentially dampening consumer confidence in the near term," he said in a research note.

Also in a research note, Pascal Gauthier, senior economist with TD Economics, said outside Calgary and Vancouver, forthcoming mortgage changes did not result in a rush to buy prior to those changes taking effect.

"Canada's housing market is re-establishing its comfort zone after having experienced strong bouts of volatility over the last three years," said Gauthier. "Although sales are expected to ease in most parts of the country as interest rates rise - the Prairies could be the exception - activity should be strong enough to provide a floor under home prices. By the same token, better availability of new and existing units will provide more balanced markets than seen in pre-recession years. This will make hard for home values to outpace general inflation over the next couple of years."


Read more: http://www.calgaryherald.com/business/Calgary+residential+sales+prices+rise+February/4441525/story.html#ixzz1Gn5XafGn

CALGARY HOME SALES RISE YEAR-OVER-YEAR
Single family homes in the inner-city drive recovery
 
Calgary, February 1, 2011 – Single family home sales in the City of Calgary edged upwards month-over-month and showed the first year-over-year increase since April 2010, according to figures released today by CREB® (Calgary Real Estate Board). 
 
The number of single family home sales in the month of January 2011 were 787, compared with December 2010, when sales were 734 — an increase of about 7 per cent. The number of condominium sales for the month of January 2011 was 297. This was down from the 320 condominium transactions recorded in December 2010.
 
Year-over-year, the number of single family homes sold in January 2011 in the city of Calgary increased by just over 3 per cent.  In January 2010, single family home sales totaled 762. Condominium sales saw a decrease of 21 per cent from the same time a year ago.  In January 2010, condominium sales were 376.
 
“More affordable housing will continue to attract homebuyers to the inner-city, particularly as employment in the city of Calgary continues to improve,” says Sano Stante, president of CREB®.  “Single family homes in the city are currently driving this gradual recovery, and we are seeing an uptick in the sale of homes below the $350,000 price point.  This may suggest more first time homebuyers are entering the market, providing the fuel needed for a sustained housing recovery.”
 
The average price of a single family home in the city of Calgary in January 2011 was $454,287, showing a 3 per cent increase from December 2010, when the average price was $441,341, and a 3 per cent increase from January 2010, when the average price was $441,217. The average price of a condominium in the city of Calgary in January 2011 was $287,954, showing a 2 per cent increase from December 2010, when the average price was $282,768 and a 2 per cent increase over last year, when the average price was $282,639.
 
The median price of a single family home in the city of Calgary for January 2011 was $390,000, showing a slight increase from December 2010 when the median price was $389,000. This was a 2 per cent decrease from January 2010, when the median price was $398,000. The median price of a condominium in January 2011 was $255,000, showing a 1 per cent decrease from December 2010, when the median price was $258,500, and a 4 per cent decrease from January 2010, when it was $265,000.
 
“The recovery in 2011 will be incremental and gradual.  Nonetheless, at the moment Calgary is offering buyers a great deal of affordability, low interest rates and a large selection of inventory,” says Stante.   “Overall the first quarter of 2011 will show modest improvements in sales which will lay the foundation for the return to a more balanced market,” he adds.
 
Single family listings in the city of Calgary added for the month of January 2011 totaled 1958, an increase of 169 per cent from December 2010 when 728 new listings were added, and showing an increase of 7 per cent from January 2010, when 1822 new listings came to the market.
 
Condominium new listings in the city of Calgary added for January 2011 were 861, an increase of 141 per cent from December 2010, when 361 condo listings were added to the market. This is a decrease of 9 per cent from January 2010, when new condominium listings added were 951.
 
“Alberta will begin to see growth in net-migration as the oil and gas sector regains traction. This will help boost consumer confidence and ultimately bring improvements to employment and family income—key drivers of our housing market,” says Stante.
 
Click here for the statistics package. Please note, you will need your Clareity Security token to access the site.
 

News Releases  TORONTO, Jan. 24 /CNW/ - Is a flexible mortgage important to you? According to the TD Canada Trust 2011 Homebuyers' Report, a vast majority of Canadians say yes. Eighty-nine percent said being able to make additional lump sum payments or weekly or bi-weekly payments was important to them. TD Canada Trust customers have long had these options for paying down their mortgage faster, and more than half of them already take advantage of them.

The survey also revealed that 3 out of 4 Canadians would like the ability to defer or reduce their monthly mortgage payment in the case of an unexpected event or shortfall. As well, 60% would be more likely to make a lump sum payment to pay off their mortgage faster if that gave them the flexibility to pay less at a later date if something unexpected came up.

Today TD Canada Trust is introducing additional flexible payment features that will give customers more choice and control over their lives when they really need it.  

• Pay down your mortgage ahead of schedule and have the flexibility to  reduce your payments later, for up to four months
  
  New and renewing customers who pay down their mortgage ahead of schedule may qualify to later take advantage of a temporary reduction in their regular mortgage payment amount, an option that may be helpful in the event of short-term income reduction.
  
  
• Pay down your mortgage ahead of schedule and have the flexibility for a payment break later, for up to four months
  
  By paying ahead, not only do you get the benefit of paying off your mortgage faster, you also have more flexibility and control and may qualify to take a temporary break later when you really need it. This added flexibility can make things easier in many situations such as a maternity leave, caring for a loved one or temporary job loss.
  
  
• Pay down your mortgage on schedule and have the flexibility to defer or reduce a payment later
  
  A major event can throw anyone off track.  If you've been paying your mortgage on schedule and are unexpectedly facing a major expense or an unanticipated reduction of income, at TD Canada Trust you may be able to defer or reduce one monthly mortgage payment a year up to four times during the life of their mortgage. 

Interest continues to accrue during each of these events and is added to the outstanding balance at the time of each regular payment date.

Being financially prepared

"Many customers want to pay down their mortgage ahead of schedule and be debt-free sooner, but they worry about not having the funds available if they need them in the future," said Farhaneh Haque, Regional Sales Manager, TD Canada Trust. "Our new flexible mortgage payment features were designed with that in mind and can help customers manage their debt responsibly and provide further flexibility if financial difficulties or unforeseen life events come up in the future."

"Customers who qualify have more flexibility when paying their mortgage ahead of schedule," said Haque. "It's really the best of both worlds and makes it more comfortable to pay off your mortgage faster knowing that if circumstances change in the future you may have the flexibility to modify your payments for up to four months. If you've paid ahead and you find yourself challenged by a major change down the road, knowing you may not have to worry about paying your mortgage for a while can bring real comfort when you need it most."

How the flexible mortgage payment features work

Sandy renews the mortgage on her home, in the amount of $212,000, with a 4-year term at 4.94% interest. Her monthly principal plus interest payment is now $1,225. Sandy is up to date on her mortgage payments and decides to use her annual work bonus to make an additional lump sum payment of $4,000 in June 2011, in order to take advantage of the flexible mortgage payment features for her maternity leave. In July 2012, she takes a four-month maternity leave and qualifies to reduce the monthly principal and interest portion of her payment to as low as $225 for that period.

Li purchases a condo and obtains a mortgage for $175,000, with a 5-year term at 5.19% interest. His bi-weekly principal plus interest payment is $518. In June, July and August 2011, he decides to use extra money he's received on sales commissions to double up on his mortgage payments, resulting in a prepaid amount of $3,408, in order to take advantage of flexible mortgage payment features in the future. In 2012, he travels abroad for the summer to work in international development and qualifies to take a three-month payment vacation on his mortgage.

Karl obtains a mortgage on his townhouse, in the amount of $212,000 with a 5-year term at 5.19% interest. His monthly principal plus interest payment is $1,258. Karl makes his payments on time but does not take advantage of any of his options to pay down his mortgage ahead of schedule. In July 2012, his partner is injured and is hospitalized for two weeks. Due to resulting expenses and a brief loss of income, Karl requests the ability to skip a mortgage payment. The skipped mortgage payment ($1,258) does result in the mortgage amortization period extending beyond the original period.  However, when he renews, the amortization period is adjusted back to the original period so that Karl's payment schedule is back on track.

In all cases, interest continues to accrue and is capitalized at the time of each regular mortgage payment date.

Qualifying for flexible mortgage payment features

Customers must meet the following conditions and obtain TD approval:

• Customers' mortgage and other credit must be in good standing at all times, for all features
• Mortgage balance must not exceed the lesser of 90% loan-to-value (LTV), or the original principal amount borrowed, for all features at the time of request
• Customers must have made additional payments by either lump sum or increased frequency to be eligible for a prepaid reduction or vacation features.
• Must be new mortgage customers or current customers who renew their mortgage on or after January 24th

Note that customers are required to continue to pay their realty taxes and creditor insurance payments, if applicable.

Highlights of Canadians attitudes towards flexible mortgage payment features

• 55% of Canadians surveyed indicated that they paid their mortgage weekly, every two weeks or twice a month - and 79% of them said they did so in order to pay their mortgage off as soon as possible
• 83% would like the ability to reduce the amount of their monthly payments during an unexpected life or work event
• 75% would like the ability to skip a payment during an unexpected financial shortfall
• 65% would like the ability to postpone making payments during a planned care leave or extended holiday

For more information on the features, please visit: www.tdcanadatrust.com/flexible

About the TD Canada Trust 2011 Homebuyers' Report

The TD Canada Trust 2011 Homebuyers' Report was conducted by Environics Research from December 22 to 29, 2010, through a custom, online survey. 1,001 Canadians were polled.

About TD Canada Trust

TD Canada Trust offers personal and business banking to more than 11.5 million customers. We provide a wide range of products and services from chequing and savings accounts, to credit cards, mortgages and business banking, to credit protection and travel medical insurance, as well as advice on managing everyday finances. TD Canada Trust makes banking comfortable with award-winning service and convenience through 24/7 mobile, internet, telephone and ATM banking, as well as in over 1,100 branches - most open 8 'til late and many now open Sunday. For more information, please visit: http://www.tdcanadatrust.com/. TD Canada Trust is the Canadian retail bank of TD Bank Group, the sixth largest bank in North America.

For further information:

Barbara Timmins
TD Bank Group
416-307-6498
barbaramailto:barbara.timmins@td.com

Carolyn Abbass
Paradigm Public Relations
416-203-2223 x. 221

CALGARY - When I bought my condo several years ago, my big fear was that I would overextend myself by purchasing more than I could comfortably afford. That fear would have been realized had I listened to the bank, which qualified me for a mortgage almost a third higher than what my financial adviser gave as my upper limit.

What neither I nor the bank considered was the full extent of the pain caused by monthly condo fees.

It's insane that only 50 per cent is calculated in the mortgage qualifying formula, since there's no such thing in the real world as paying anything less than the full amount.

As a member of my condo board, I can tell you alarm bells go off whenever there's a problem with a monthly payment. The financial health of the building, and thus all individual unit owners' personal investments is at stake.

Indeed, the condo corporation is within its right to foreclose on an owner who fails to contribute his or her share to the building's maintenance and upkeep.

Federal Finance Minister Jim Flaherty made a serious mistake in rejecting a proposal that would have changed the qualifying formula for condo buyers, to include 100 per cent of the monthly fees. Using the lesser amount simply sets owners up for failure, and lulls them into a false sense of security in terms of housing affordability.

Overall, Flaherty did tighten up the mortgage rules. Among the changes, he lowered the maximum amortization period for government-insured mortgages from 35 years to 30 years.

It's a good move, but it still doesn't go far enough. Don't forget, it was only a few short years ago when that maximum period was 25 years. And while Canada never had a major subprime mortgage sector here, requirements did loosen during the bubble years. Ottawa allowed the amortization period to go from 25 years to 40 years, almost overnight.

The purpose of tightening mortgage rules is to maintain healthy consumer debt levels, and to tackle concerns over high household debt.

To those analysts, mortgage specialists and real estate agents who say the stricter rules will price people out of the market, I say: if someone can't afford to be in the market, he probably should be priced out of it.

The reality with condos is owners have a legal responsibility to pay their share of upkeep for the common space. Condo fees are determined based on the size of the unit, so those with bigger apartments pay a bigger share.

The fee is also used to contribute to a reserve fund, which should be reviewed by a professional every five years. The reserve fund study ensures there is sufficient money to adequately maintain the building. It lays out a timeline for repairs and calculates how much the corporation should be saving each year, to cover those estimated expenses.

If the condo corporation fails to get it right, and there's not sufficient funds to pay for an anticipated or unanticipated expense, owners can be hit with a one-time fee called a special assessment. It can be in the thousands of dollars.

But if buyers have already extended themselves financially to get into their condos, they'll have little or no ability to borrow.

Those who can't pay could ultimately face foreclosure, says Lubos Pesta, a Calgary real estate lawyer who recently wrote about special assessments becoming more commonplace in the city.

"Let's say the people maxed out on their mortgage already because they were first-time homebuyers. They could not borrow more money if the value of the property hasn't gone up," Pesta told me Wednesday. "They would have to go to family or friends, or someone else to borrow the money, or they would lose the property."

Those are pretty high stakes for those who entered the market during the good times, when there was a rush to convert old, deteriorating apartment buildings into condos. The units were spruced up, but often times, according to Pesta, developers failed to inject sufficient funds into the reserve accounts.

Now, those 25- and 30-year-old buildings are showing their cracks of age, requiring major repairs such as exterior stucco work, roof repairs, new elevators or boilers, and other significant expenses that have resulted in owners being charged one-time special assessments of "five figures" or more, per unit.

That's a financial nightmare that anyone can find themselves in. I like to think I'm smart, just not so good with numbers, which is why I trusted the experts to tell me what I could and couldn't afford.

In hindsight, getting a second opinion was the best decision I could have made. I recommend all potential condo owners do the same, until the mortgage qualifying rules are updated to better reflect the reality of condo fees.

Calculating unrealistic costs of condo ownership might as well be the same as blowing air into the real estate bubble.

Paula Arab is a columnist and member of the Herald editorial board.

parab@calgaryherald.com

© Copyright (c) The Calgary Herald
Read more: http://www.calgaryherald.com/Arab+Condo+fees+should+fully+factored+into+mortgage/4134824/story.html#ixzz1BcTCkbxA

Federal Finance Minister Jim Flaherty announced tighter mortgage rules on Monday to address concerns over high Canadian household debt.

"In 2008 and again in 2010, our government acted to protect and strengthen the Canadian housing market," Flaherty told a news conference in Ottawa. "We continue to do so today."

Flaherty unveiled three main changes:

• The maximum amortization period for a government-insured mortgage was lowered from 35 to 30 years.
• The upper limit that Canadians can borrow against their home equity was lowered from 90 per cent to 85 per cent.
• Government insurance backing on home equity lines of credit, or HELOCs, has been removed.

The first change is likely to have the largest impact. Buyers who purchase a home with a down payment less than 20 per cent of the value of the home are required to purchase government-backed mortgage insurance through Canada Mortgage and Housing Corporation.

P.O.V.: If you’re a homeowner, how much of your mortgage do you still have to pay off? Take our survey.

Under the new rules, mortgages amortized over longer than 30 years will no longer qualify for that insurance, making it effectively impossible to get a highly leveraged mortgage of more than 30 years in Canada.

After companies began insuring mortgages of 40 years or more, Ottawa set the limit at 35 years in 2008 before Monday's move lowered it to 30.

Read more: http://www.cbc.ca/money/story/2011/01/17/flaherty-mortgage-changes.html#ixzz1BLN9QoG4

CALGARY - Multi-family starts in the Calgary census metropolitan area soared in October to a level more than 90 per cent higher than a year ago.

According to data released today by Canada Mortgage and Housing Corp., there were 438 multi-family units that began construction last month, up from 230 units in October 2009.

However, the CMHC also said single-detached units dropped by 31.1 per cent in the month to 346 starts compared with 502 a year ago.

Total starts were up 7.1 per cent in the region to 784 units.

"Single-detached construction continued to moderate as a result of heightened competition from the resale market and slowing sales," said Richard Cho, senior market analyst in Calgary for the CMHC. "This represents the third consecutive month where starts have declined on a year-over-year basis."

He said new home construction in the single-detached sector will remain modest for the rest of the year and into the early part of next year until active listings in the resale market diminish.

David Hooge, president of the Canadian Home Builders' Association-Calgary Region, said the October single-detached market decrease is a continuation of a trend for the last few months.

"Our MLS numbers (resale) have come down a little bit particularly in the last three weeks. We've seen a little better traffic in the sales centres for sure. A little stronger traffic over the last three weeks which is a positive sign," added Hooge. "But it's not really translating into a lot of sales at this point. We're still hopeful that's going to be the case."

Across Alberta, housing starts in the seven largest cities declined 17 per cent in October from 2,179 in 2009 to 1,801 this year.

While many economic indicators in Alberta are pointing towards a gradual economic recovery, one of the key indicators, housing starts, has been on a slow decline since early spring, said Todd Hirsch, senior economist with ATB Financial in Calgary.

Although the province's housing starts have "clawed their way back" from the lows hit in 2009, the trend has been decidedly slower since March, he said.

"Most of this is due to the fact that much of the market for real estate was brought forward into the first half of the year when people anticipated higher rates to come after the summer," said Hirsch. "Even though higher rates have yet to materialize, the pool of potential buyers has been thinned out, leaving a softer market."

He said housing starts may struggle for the rest of the year and perhaps into 2011 but with the provincial population still growing and the employment situation improving, the demand for new homes is bound to return later next year.

At the national level, Canadian homebuilding showed signs of weakness in October as starts fell 9.2 per cent to 167,900 annualized units - the third straight monthly decline and fifth in the past six months.

mtoneguzzi@calgaryherald.com

© Copyright (c) The Calgary Herald

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