Value-minded buyers fuelling strong spring housing market

By Sheila Dabu Nonato, Postmedia NewsApril  12, 2012

Led by a growing number of young, single female buyers, “value-conscious”  Canadians are helping to create a robust housing market, according to the Bank  of Montreal’s spring housing report.

First-time buyers being drawn into the market by low interest rates and  affordable housing, are attracted to convenient, urban living, said analysts on  a conference call Thursday to discuss the report.

Among the major trends, experts highlighted single family homes, the condo  boom and an urban lifestyle, where restaurants, subways, schools and work are  within walking distance.

Conrad Zurini, broker of record at RE/MAX Escarpment Realty Inc., said a  common thread across the country was the “value-conscious” first-time buyer.

Single women aged 18 to 34 now account for 20 per cent of all buyers, says  Zurini, with a majority having a preference for “turn-key,” or ready-to-move-in,  properties.

Among Canada’s largest cities, Calgary and Ottawa saw the biggest gains in  housing sales in March, according to BMO data — up 12 per cent from March 2011 — while Toronto sales gained 7.8 per cent year-over-year. Prices fell in Edmonton  and Victoria, as well as in previously booming Vancouver, where they were down  30 per cent from a year ago, said Katie Archdekin, BMO’s head of mortgage  products. Prices rose “moderately” in most major cities, ranging from one to  five per cent above 2011 values, she said.

“With Vancouver now well back from peak activity, Toronto is definitely the  market to watch,” she said.

Houses spend the least time on the market — 29 days — in Regina, where new  jobs have been fuelling market confidence, Zurini says.

BMO data suggests that New Brunswick housing prices increased 3.6 per cent  since last February, with sales up 5.5 per cent during the same period.

Toronto’s surging condo market has been dominating provincial and national  housing sales and starts data — a 50.4 per cent increase in multiple-unit starts  in Ontario in March was due entirely to Toronto condo figures, and the national  five per cent increase in housing starts was largely attributable to the same  source, according to Canada Mortgage and Housing Corp. data released  Wednesday.

Paul Maranger, senior vice-president of Sotheby’s International Realty  Canada, said the boom in the luxury single-family home and condo markets  continues to be strong, especially in Toronto where it is fuelled by the  “significant void” in supply for single family homes.

Most buyers in Toronto are looking for convenience, not value, he added, with  many who work in the financial district, law and medicine and are  “time-strapped, working incredible hours in the office.”

“They’re willing to pay a substantial premium to not have to do any work (to  find a home),” he said.

They are also looking at downsizing, choosing smaller homes in urban centres  that offer a convenient lifestyle.

“Luxury does not necessarily equate to space,” he said.

Calgary is also seen as a “developing market” in the high-end housing market,  Maranger said, and Vancouver continues to experience strong luxury demand in the  western side of the city.

Another factor fuelling the strong Canadian buying market is foreign buyers  from China and the Middle East, with most seeking to “park” capital, instead of  renting out their property, Maranger said.

Zurini adds that part of the housing boom is also being influenced by the  large wave of immigrants to Toronto, who are coming “with money, well-educated  and looking at home ownership.”

The booming luxury housing market, Maranger suggested, may continue in  Toronto in the mid- to long-term because of its “strong base” of high-income  households who work in finance, law and health care.

There has been a “significant uptick” in sales of more than $2 million in  Toronto’s central core compared to last year, said Maranger, adding that sales  offers for housing at less than $2 million are also “unbelievably active” this  year. A home in Toronto’s pricey Summerhill area sold for $370,000 more than its  asking price, he said.

Meanwhile, in Quebec, Sotheby’s sold a $23-million property to buyer from  Singapore, he noted.

Source: The Vancouver Sun