Edmonton Real Estate Blog

EDMONTON- A new mandatory warranty program designed to protect people buying new homes across the province comes into affect this weekend.

The government calls the New Home Buyer Protection Act the strongest consumer home warranty protection plan in Canada.

“This legislation will help protect the single largest purchase that most people make…a home,” said Minister of Municipal Affairs Ken Hughes.

Ninety per cent of homes built in Alberta already have new home warranty, but the new legislation will require all builders to provide more comprehensive home warranty coverage for all new homes and condominiums built in the province.

At minimum, all new homes will have the following warranty protection:

• one year labour and materials – this covers the way the home was built or the materials it was built with, such as flooring and trim;
• two years distribution systems – this covers the labour and materials related to heating, plumbing and electrical systems;
• five years building envelope protection – this covers the exterior shell of the home, including the roof and walls, and includes a requirement for the warranty provider to offer the consumer the option to purchase two additional years of building envelope coverage; and,
• ten years coverage for key structural components, including its frame and foundation.

“Reputation is very important,” said Tally Hutchinson, vice president of the Canadian Home Builders’ Association, Edmonton Region. “And we will continue to build homes with best practice and we think that this initiative is very, very important for the consumer and for the industry.”

However, not everyone is convinced. Homeowner Meaghen Allen took possession of her home over four months ago and says she’s still fighting with her builder over several issues.

“The side of our house stairwells, we didn’t have an exit there. The garage, the electrical to the garage, lighting fixtures. Just the quality of work, the stairs, the paint,” she said. “And just too, they were building properties next door to us.”

Allen says going through warranty hasn’t worked, either.

“My experience with New Home Warranty is that they don’t do anything,” she explained. “I have dealt with New Home Warranty (on) three different houses, and three different houses, nothing out of it.”

However, the province maintains it will hold builders and warranty companies accountable. In order to crack down on negligent builders, fines of up to $500,000 can be handed out. The Superintendent of Insurance will also investigate consumer complaints against warranty providers.

“Our new home buyer protection office has compliance officers who will monitor compliance,” said Ivan Moore, assistant deputy minister, Public Safety Division, Municipal Affairs.

The Act will only apply to homes with a building permit applied for after Saturday, Feb. 1.

The New Home Buyer Protection Act was passed in November 2012, and was originally supposed to come into effect last fall. However, that date was pushed back to Feb. 1, 2014 to give warranty providers more time to prepare, the government said.

For more information on the Act, including access to warranty information, visit the Government of Alberta’s website.

Source: GlobalNews.ca

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Canadian home prices ticked back up to a record high in December, thanks entirely to Edmonton, Vancouver and Toronto, according to the Teranet-National Bank house price index.

The 0.1-per-cent rise in home prices in December reversed a 0.1-per-cent decline in November, and returned the index to its all-time high.

But the majority of the 11 cities that the index tracks have seen prices edge down in recent months. Winnipeg, Calgary, Ottawa-Gatineau, Quebec City, Montreal, Hamilton, Halifax and Vancouver each saw prices decrease from November to December.

December was the sixth month in a row that Montreal failed to see a price increase, and the fifth month in a row in Quebec City, National Bank of Canada economist Marc Pinsonneault said in a research note. Ottawa-Gatineau has seen prices fall for four months in a row and Victoria for three, he added.

But Vancouver, the city that saw the steepest market correction in the past two years, saw its prices rebound to a new high. Toronto’s prices rose 0.4 per cent from November, the first time they’ve risen in four months, and are now almost back up to the peak that they reached last August. Edmonton posted its first price increase in five months, up 0.6 per cent.

All told, national home prices were 3.8 per cent higher in December than they had been a year earlier. That’s an acceleration from the 3.4 per cent year-over-year increase in November, and is stronger than the 3.1 per cent increase in prices during 2012.

But Mr. Pinsonneault notes that the improvement from 2012 comes solely from Calgary, Vancouver and Toronto. Excluding those three cities, last year’s price increase would have been 1.2 per cent.

Given that higher mortgage rates are eroding housing affordability, Mr. Pinsonneault is predicting that house price increases will barely cover CPI inflation during 2014, about 1.5 per cent.

Calgary has seen its prices rise 6.5 per cent in the past year according to this index, Toronto 4.9 per cent, Vancouver 5.5 per cent and Winnipeg 3.4 per cent. The only city that has seen a price decrease over the past year is Victoria, where prices have dropped by four per cent. But a number of cities, namely Quebec, Ottawa, Montreal and Halifax, saw prices tick up just a bit.

Many economists say they are surprised by how well Canadian home prices have held up in the wake of the market downturn that impacted much of the country from the summer of 2012 until this past spring. Prices tend to lag sales, and economists expected the slump to translate into more downwards pressure on prices.

“Prices have been much stronger than we anticipated them to be,” Toronto-Dominion Bank real estate economist Diana Petramala said earlier this month.

The Canadian Real Estate Association, which represents the bulk of real estate agents in Canada, will release December’s average prices as well as its latest home price index numbers Wednesday (averages tend to be skewed by changes in the size or types or locations of homes that are selling).

But the Calgary Real Estate Board recently said that the benchmark price of a single family home in the Calgary area has risen to $472,200, up 8.6 per cent from December of 2012.

The benchmark in Vancouver is $603,400, up 2.1 per cent from a year earlier.

The average price of homes that sold over the Multiple Listing Service in the Toronto area during December was $520,398, up by 8.9 per cent from the average selling price in December, 2012. And the average selling price in Toronto for all of 2013 was $523,036, up 5.2 per cent from the average in 2012.

Source: www.TheGlobeAndMail.com

The REALTORS® Association of Edmonton released market housing statistics for the month of October based on sales through the Multiple Listing Service® in the Edmonton CMA. The all-residential average price in the Edmonton CMA is $337,599 as compared to $332,232 in October 2012, a +2.5% change. The median price for a home in Edmonton is up at $327,250 compared to $315,600 last October.

All-residential sales totalled 1,454 (adjusted for late reported sales, 1,346 reported) in October, a positive change of 15.6% from the same month last year when there were 1,258 residential sales. There were 888 (822) adjusted SFD sales, 449 (416) adjusted condo sales and 90 (83) adjusted duplex/rowhouse sales (reported sales in brackets).

“Total annual sales are the highest they have been for five years and we had the best October in five years as well,” said RAE President Darrell Cook. “There is a 74% sales-to-listing ratio which means that sellers have a better than usual expectation of selling their property. At the current level of sales there is adequate inventory (4,807) for 2.7 months which is lower than normal in this market. The youthful nature of our city (average age 36) and good job prospects means that the demand for housing remains high.”

The unemployment rate declined from 5.2% in August 2013 to 5.1% in September 2013. City of Edmonton economist John Rose states that; “These numbers demonstrate that Edmonton has become one of Canada’s most attractive locations for individuals seeking work.”

The average price for a single-family dwelling in October was $397,613 (up 2.5% Y/Y) and an average condo sold for $235,680 (up 2.1% Y/Y). The average price for a duplex/row house was $326,195 (up 5.2% Y/Y). Median prices for SFDs was $375,000, for condos $222,750 and for duplex/rowhouses, $318,900.

“The first time buyer or young person moving into this market will often choose a condo because of the lower price point,” said Cook. “About 60% of all condo sales are under $250,000 and that represents 17.6% of all residential sales. Condos priced over the average price of a SFD represent only 1.5% of total residential sales.” There were 584 SFDs sold for under $250,000 which is less than 4% of all residential sales.

The average days-on-market was 54, down from 60 days last year. For real estate advice or further explanation of the market conditions, consult a REALTOR®.

Source: Realtors Association of Edmonton

Rising mortgage rates are fuelling home sales. They also appear to be curbing price growth as buyers drive tougher bargains.

The number of existing homes that changed hands across the country last month rose 18.2 per cent from a year earlier, the Canadian Real Estate Association said Tuesday. September’s sales were slightly above the long-term average for that month, an indication that the market has fully recovered from the steep slump after Finance Minister Jim Flaherty tightened the mortgage insurance rules in the summer of 2012.

While sales were up just 0.8 per cent from August, the rise topped some economists’ expectations and marked the seventh consecutive month-to-month gain.

But many experts claim that the increase in mortgage rates that has occurred since the spring, and the prospect of higher rates down the road, is providing a sales boost that will prove to be temporary.

Mortgage rates are up about three-quarters of a percentage point since May, with five-year fixed rates having risen to 3.39 per cent from 2.64 per cent, according to Alyssa Richard, chief executive of RateHub.ca.

With buyers facing higher rates, the market could lose steam in the months ahead.

“We expect home resales to stabilize near the current levels, although some modest pullback may occur later this year or early next as payback for sales that may have been advanced during the rush to lock-in lower rates,” Royal Bank economist Robert Hogue said in a research note.

Greg Twinney, a senior executive at the e-book company Kobo, says mortgage rates played a large factor in his role to move his family from downtown Toronto to Caledon, north of Mississauga, this fall. He had been planning to move there some time in the next five years, but the combination of finding a property he liked and a lack of clarity over how much rates will rise spurred him to buy a house there last month.

“Given where interest rates are, you’re able to get in to a home now and lock in interest rates and know what you’re paying for the next five years and it’s affordable,” he said.

The banking regulator, the Office of the Superintendent of Financial Institutions, has long been considering tightening the country’s mortgage underwriting rules, and could still take action.

Canadian Imperial Bank of Commerce economist Benjamin Tal has said recently that he suspects the housing market is currently too strong for the government’s liking. But if the current momentum in sales does prove temporary, that could ease any fears that Mr. Flaherty might have.

Jim Murphy, the head of the Canadian Association of Accredited Mortgage Professionals, met with Mr. Flaherty last month, partly in an effort to present the association’s case that the market is in balance and no further tightening is required. “I think he’s comfortable with where the market’s at,” Mr. Murphy said Tuesday.

Much of the concern that policy makers have had about the housing market in recent years has stemmed from rising consumer debt levels and home prices.

While the average price of homes that changed hands over the Multiple Listing Service last month was up 8.8 per cent from a year earlier, to $385,906, that’s in large part because pricey cities, such as Toronto and Vancouver, were in the midst of steep sales declines a year ago.

The Teranet-National Bank home price index for September, released Tuesday, hadn’t budged from August. The index normally picks up 0.2 per cent from August to September as buyers return from summer vacations.

“Price behaviour seems to be at odds with the recent pickup in resale activity,” National Bank economist Marc Pinsonneault wrote in a research note. “It looks that households are willing to buy, but they are now bargaining harder on prices to compensate for higher mortgage rates.”

Toronto-Dominion Bank economist Diana Petramala pointed out that a rising stock of unsold condos is also weighing on price growth. “Prices were down in Montreal and Ottawa where a growing overhang of condos on the market is keeping prices low.”

Meanwhile, consumers who are wondering where mortgage rates will go next should look to Washington, says TD chief economist Craig Alexander.

Five-year fixed mortgage rates tend to follow the yields on five-year government of Canada bonds, because those influence banks’ funding costs. Canadian bond yields tend to mirror those in the U.S. because the market views the securities as alternatives to one another. Mortgage rates rose over the summer as bond yields rose, largely because of expectations that the U.S. Federal Reserve would soon begin tapering its quantitative easing program.

That hasn’t happened, and bond yields have edged down a bit recently as a result. But banks tend to change their mortgage rates only when they think yield changes will be relatively long-lasting, Mr. Alexander said.

“Over the entire course of next year, I expect the five-year yield to go from 2.05 to 2.55 per cent, so I think the balance of risks are that, in 2014, fixed mortgage rates will creep up a little bit,” he said.

Source: http://www.theglobeandmail.com

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Statistics Canada says its new housing price index rose 0.1 per cent in August, following a 0.2 per cent increase in July.

The agency says Calgary was the top contributor to the national increase in August, with prices rising 0.6 per cent because of market conditions, increased material and labour costs and a shortage of developed land.

It says the largest monthly price advance in August came in Windsor, Ont., where prices rose 1.0 per cent due to increases in material, labour and land development costs.

New housing prices rose 0.3 per cent in both Montreal and Saskatoon.

Negotiated selling prices contributed to lower prices in Vancouver, Halifax, Ottawa–Gatineau and Victoria.

Prices were unchanged in nine of the 21 metropolitan areas surveyed.

Source: Money.ca.MSN.com

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The REALTORS® Association of Edmonton released market housing statistics for the year to date (YTD) including the month of September. The all-residential average price for the first three quarters of the year in the Edmonton CMA is $350,741 as compared to $340,090 in 2012. In September, the all-residential average was $352,057, up 5.4% from a year ago and inching up from $351,455 in the previous month.

Year-over-year sales were also up 19.4% with 1,466 (adjusted, 1,357 actual) all-residential sales in September. There were 13,691 residential sales in the Edmonton CMA in the first three quarters of 2013 as compared to just 12,876 sales at the same time last year.

“Our members report that the market is very active with many properties attracting multiple offers,” said President Darrell Cook. “The increases in the Alberta population are driving the market and because of the steady sales there are inventory shortages at the lower price ranges.”

There were 926 (adjusted, actual 857) single-family detached sales in September at an average price of $408,642 (up 3.9% Y/Y) as compared to 773 sales a year ago at an average price of $393,374. Condos sold on average in September for $243,655 (438 adjusted sales, 406 actual), up from $224,330 last September (up 8.6%). Duplex/row house sales were up with 79 (adjusted ,73 actual) sales, valued on average at $338,250 ($316,973 last year).

“Average sales prices are the highest they have been in five years,” said Cook. “Combined with the highest sales numbers since 2012, we have year-to-date residential sales values totaling $4.8 million. Strong market fundamentals, increasing population and the persistence of low mortgage rates have convinced many buyers that an investment in real estate is secure.”

The September sales-to-listing ratio of 65% was the result of 2,089 residential listings and 1,357 residential sales. The inventory of available homes on the Edmonton MLS® System was down from 5,557 units in August to 5,111 units in September. It took 54 days on average (up one) to sell a home in the Edmonton area. A REALTOR® has access to all the latest market data and effective marketing tools and is the best source of real estate advice for both buyers and sellers.

Source: Realtors Association of Edmonton

To View & Search All MLS Listed Houses for Sale Visit Us At:

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Canadians continued to snap up housing in August, with home sales up 2.8 per cent from July and up 11.1 per cent from the previous year.

The Canadian Real Estate Association says the recent rise in mortgage rates caused people who already had mortgage approvals from their lenders to move their decisions forward.

Mortgage rates rose 0.2 percentage points the week of August 22, but many prospective buyers locked in rates with their banks, and the impact of higher rates is not expected to be felt until later in the fall.

The August numbers also seem high by comparison with a year ago because sales activity had dropped sharply last summer after Ottawa tightened mortgage rules.

That tightening dampened enthusiasm to buy homes last fall, but by the spring, Canadians were again shopping for housing.

Sales rose sharply in most major cities and especially Vancouver Island, Victoria, Greater Vancouver, the Fraser Valley, Calgary, Edmonton and Greater Toronto.

Prices down in Fraser Valley, Ottawa, Kitchener-Waterloo

The average price of a home was up 8.1 per cent at $378,369, with price rises in Toronto and Vancouver driving most of the increase. The average price of a Vancouver house was $775,811 and in Toronto, it was $523,228.

Average prices dropped in the Fraser Valley, Ottawa-Gatineau and Kitchener-Waterloo, Ont.

CREA doesn’t expect the strong numbers will last this fall.

“That pool of homebuyers [who had locked in mortgage rates] has largely evaporated, so demand may soften over the fourth quarter,” said CREA chief economist Gregory Klump.

The big year-over-year gains will persist because sales were so weak in fall of 2012, he said.

Around 325,180 homes traded hands across the country so far this year. That is 2.9 per cent below levels recorded last year and overall sales are expected to stay below 2012 levels.

Source: CBC.ca/news