While only 30 per cent of 19 major Canadian markets reported sales in excess of 2010 levels for January and February, almost 70 per cent of markets experienced an upswing in average home prices, according to The RE/MAX First-Time Buyers Report released Tuesday.
Leading the country in terms of percentage increases were Saskatoon, up nearly 15 per cent, and Greater Vancouver, up about 12 per cent over the same period last year. Winnipeg -- up over 11 per cent – also led the pack, according to the RE/MAX report, which relies on Canadian Real Estate Association data and interviews with real estate brokers from across the country.
Even as volumes declined in other key markets, average prices rose. Coming in behind Vancouver, Hamilton-Burlington realized an eight-per cent increase, while Quebec City saw prices grow five per cent in the first two months of 2011. Greater Montreal and Toronto each experienced a five-per cent climb in prices.
The report is singling out first-time homebuyers as a key factor in the steady growth as they took advantage of low interest rates and a relatively stable job market.
"Consumer confidence is climbing in conjunction with economic performance, and concerns over a secondary recession fade with each passing day,” said Elton Ash, regional executive vice president for RE/MAX of Western Canada. “The mood is cautiously optimistic as first-time buyers enter the market. With the Canadian economy on firmer footing overall, residential real estate is well-positioned moving into the traditionally busy spring market,"
The report is downplaying the impact of mortgage rule changes ushered in by the federal government in March. They were expected to drive market growth in the weeks before the March 18 deadline.
“Changes to recent financing criteria have not created the anticipated run up in activity in most markets,” according to RE/MAX. “From a financial standpoint, most rookie home buyers remain quite prudent.”
That cautiousness has actually worked to the advantage of mortgage brokers in several markets, as first-time buyers explore financing options outside of the Big Five.
“I do think that a lot of first-time buyers did get into the market to get in ahead of the rule changes,” Roy Deeks, president of The Mortgage Centre Unity Financial Services, told MortgageBrokerNews.ca. “But what we continue to see is that they’re doing more research and they’re more savvy. That means they’re now talking to mortgage brokers.”
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