Kitchener Waterloo Real Estate in the News

By Benjamin Bach, the Wealth Team on May 12, 2010 in Featured Articles

Here are some articles about the KW real estate market, as well as the larger Canadian market that we’re reading today.

Daily Commercial News: April Housing Starts Jump in Kitchener

Canada Mortgage and Housing Corporation (CMHC) released April preliminary housing starts data for the Kitchener Census Metropolitan Area (CMA) today. Construction began on 390 homes, up from the 126 units started in the same month last year.

To view the graph associated with this release, click the following link: http://media3.marketwire.com/docs/cmhc0510kitchener.pdf.

Builders poured foundations for 142 single-detached homes in April, up from the 88 units started in April 2009. While townhouse starts declined slightly, the surge in rental apartment starts pushed total starts to the highest level for an April in more than 20 years. All the municipalities in the Kitchener CMA, except the city of Cambridge recorded higher starts in April. For the first four months of 2010, construction began on 964 homes, more than double the 467 units started in the same period of 2009.

“Homebuyers have brought home purchases forward to avoid expected mortgage rate increases and the HST in July, resulting in the stronger housing starts early this year,” said Erica McLerie, Senior Market Analyst for the Kitchener CMA. “With tight resale market conditions, many homebuyers had to look to the new home market to find something that suited their needs,” added McLerie.

BenjaminBach.com: April’s Real Estate Sales in Kitchener Waterloo set Record

Another very busy month for real estate in Kitchener Waterloo – 724 homes were sold in April 2010, up 12.6% from April 2009’s volume. The previous record for sales in April was set in 2007 with 711.

The average price of a single detahced home sold in Kitchener Waterloo in April rose to $327,196, an incrase of 12.3% over the average price reported in APril 2009.

The average value of a semi-detached home incrased 17.4% from $196,429 (average, April 2009) to $230,582 (average, April 2010), and the average sale price of condos increased 7.2% to $176,117.

And how about a few articles about the overall Canadian housing market… It seems markets outside of Kitchener Waterloo don’t all have such rosy outlooks.

The Globe and Mail: Housing offers glimpses of cooling

Canadian housing activity continues at a bustling pace, but there are glimmers the market is set to cool.

Housing starts rose at an annualized pace of 201,700 units last month, Canada Mortgage and Housing Corp. said Monday, though gains in multi-unit construction masked the first sizable slide in single-unit activity in a year.

A separate survey showed fewer Canadians have firm plans to buy a house. And resale activity is already slowing.

Most economists – including Bank of Canada officials – expect the housing market to slow from its torrid pace. Rising interest rates, tighter mortgage rules and a new sales tax in Ontario and British Columbia will likely dampen activity in the second half of this year. And though monthly numbers – especially in the building sector – can be volatile, economists said the drop in single-family homes suggests the sector is already softening.

Ottawa Citizen: Homeowners feel rate pressure

A new report from the country’s mortgage brokers suggests up to 375,000 Canadians with home loans are “challenged” by current rates and that figure would more than double if interest rates climbed to 5.25 per cent.

“I think overall the message is that we are being prudent and doing well. “There are a lot of stats to support that,” said Jim Murphy, chief executive of the Canadian Association of Accredited Mortgage Professionals, whose study — done in April — found a further 475,000 mortgage holders would have trouble making payments if rates rose to 5.25 per cent.

According to the group, there are 9.3 million homeowners in Canada and about 5.55 million have mortgages. Of particular concern is the number of consumers with variable rate mortgages, now as low as 1.75 per cent, who could be affected if the rates rise.