Friday, July 06, 2007

Housing prices in western Canada keep trending skywards


Two pieces on the cover of Yahoo.ca this morning.

Yahoo!: Resale house prices forecast to top $300,000
Canada's resale housing market gained "astounding" momentum in the second quarter with the national average house price expected to increase by 9.5 per cent this year, the Royal LePage Real Estate Service said on Thursday.
Royal LePage estimates the average house price will exceed the $300,000 mark for the first time to hit $303,300. An estimated 522,306 home sales transactions - an increase of eight per cent - are projected by the end of the year.
"As we move into the second half of the year, we continue to expect areas of aggressive price appreciation in the west, and modest, mid-single digit price increases in Central and Atlantic Canada," said Phil Soper, president and chief executive officer of Royal LePage Real Estate Services.
Analysts say the market could cool if the Bank of Canada decides to raise interest rates again. The bank is slated to meet next week.

Yahoo!: Fleeing Calgary for Saskatchewan helps push housing figures to record levels

An exodus of people escaping the traffic, construction gridlock and dizzying home prices of boomtown Calgary helped push home prices in Saskatchewan to record levels - a trend expected to continue through the end of 2007.
"The same reason they flee Toronto for London or Kitchener, they're fleeing Calgary for Saskatoon," Phil Soper, CEO of Royal LePage Real Estate Services (TSX:RSF.UN) said Thursday after releasing a report forecasting the national average house price to rise 9.5 per cent to $303,300, passing $300,000 for the first time.
"Things like traffic and pollution are driving them nuts."
Saskatoon recorded Canada's largest property jumps in the second quarter: with bungalows costing an average $281,250 - more than $100,000 over the same period in 2006. Two-storey homes were even more expensive, going from $196,500 to $305,000. Regina bungalows sold for $204,000 over $143,250 a year earlier.
Still, the runaway prices that have characterized Edmonton and Calgary for the last 18 months have begun to ease. That's not to say real estate is cheap - the average price of a single family home in Calgary is approaching a half-millon dollars: $496,000 in June and $465,678 in the second quarter of 2007. In Edmonton, the average house was $397,857 over the last three months.


It's ludicrous, and for those of us who are safely ensconced in our homes, ultimately meaningless. Great, my home can now sell for double what I paid for it 3 years ago. So, where would I move to? Downsize to a 2-bedroom condo? I don't think so. Refinance to the new assessed value and spend the money on bling and pointless consumer goods? That's an even dumber idea.


Here's a better idea, hunker down, live my life, and be grateful if and when a big shock comes to the energy sector that I'm not one of those jokers sitting on a half-million dollar (or more!) mortgage when the gravy train rolls to a stop. I feel bad-in-advance for the neauveax-riches twenty somthings, flush with cash who haven't been around long enough to really understand that the energy sector is very, very cyclical.

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