With Canadian economic growth rebounding from the recession, the unusually severe decline in sales activity in early 2009 is not expected to recur in 2010. Annual activity in 2010 is forecast to be well above the previous year’s level as a result.

CREA forecasts national activity will reach 527,300 units in 2010, up 13.3 per cent from 2009. This would represent a new annual record, standing 1.2 per cent above the previous peak in 2007. Low interest rates are expected to boost housing demand in the first half of the year, resulting in strong annual sales growth in nearly all provinces in 2010, led by British Columbia and Ontario.

National home sales activity is expected to remain strong in the first half of 2010, fuelled by low interest rates and homebuyers motivated to avoid the HST before it comes into effect in Ontario and British Columbia. Over the second half of the year, national activity is expected to trend downward as the last of pent-up demand is exhausted, interest rates begin rising, and the HST comes into effect in Ontario and British Columbia.

Interest rate increases will contribute to weaker national sales activity in 2011. National home sales activity is forecast to decline 7.1 per cent to 490,100 units in 2011, putting it on par with annual levels reported in 2005 and 2006.

“Although interest rates are expected to rise, they will still be low enough to keep affordability within reach for many homebuyers requiring mortgage financing, and support overall housing demand,” said CREA President Dale Ripplinger.

The national average home price is forecast to climb 5.4 per cent in 2010, reaching a record $337,500, with average price gains forecast in all provinces. The national average price increase will continue to reflect upward skewing from the rebound in activity among Canada’s priciest markets, particularly in British Columbia and Ontario.

The national average price is forecast to ease by 1.5 per cent in 2011. Modest average price gains are forecast for all provinces except British Columbia and Ontario, whose share of national activity is expected to ease. The shift in the contribution made by provinces toward national activity will continue skewing the annual comparison in the national average price in 2011.

The price trend is similar but less dramatic for the weighted national average price, which compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. The weighted national average price is forecast to climb 4.8 per cent in 2010, and remain stable in 2011.

“Improved financial market stability and recovering global economic growth mean that home sales activity in 2010 is unlikely to repeat the dive it experienced in late 2008 and early 2009,” said Chief Economist Gregory Klump.

“Fiscal restraint, a strong Canadian dollar and a subdued inflation outlook point to marginal interest rate increases over the next couple of years, especially if the U.S. economic recovery proves to be weak and protracted,” said Klump.

“The Bank of Canada will need time to gauge the effect of interest rate increases on Canadian economic growth,” Klump said. “It recognizes that consumer debt burdens are running high, so it will want to gauge the impact of interest rate hikes on domestic demand and overall economic growth. Changes in interest rates impact the economy with a lag, so the timing and magnitude of interest rate hikes will be tricky, given that the Bank expects the private sector to lead economic growth once temporary government stimulus spending expires,” he added.

“The decline and subsequent rebound in sales activity for homes in the upper price spectrum in some of Canada’s priciest markets skewed average prices upward in the second half of 2009 and into 2010. This segment of housing activity in Ontario and British Columbia is expected to ease beginning in the second half of 2010, causing average prices to moderate in those provinces,” said Klump.

“A downward trend in national sales activity combined with an increase in listings will result in a more balanced market. Although builders are understandably more upbeat than they were during the depth of the recession, speculative building will likely continue to be held in check. As a result, while the real estate market will become more balanced, Canada will continue to avoid the massive realignment in housing supply and demand experienced in the U.S.”

Despite the turbulent economic times we all experienced as 2009 began, the past year has been one of the best ever for Quest Realty. The year has been so good that we are finally able to spread our wings and take flight. This once again reaffirms that the best, and safest, investment is always Real Estate.

As the first decade in the new millennium comes to a close, next year promises to be our biggest and most exciting year yet! In fact, we can barely stand the wait as we prepare to unveil our brand new digs.

That’s right! Quest Realty’s journey will continue down a new path in 2010. We’re moving to a new ‘Home’, and we’re planning to elevate the services we provide to unprecedented levels.

For now though, just like you, we’re going to take some time and savour all that the Yuletide season has to offer.

Some 135,182 homes were sold across Canada in the third quarter, up 18 per cent from a year earlier and the most ever for the period, the Canadian Real Estate Association said Thursday.

It's the biggest year-over-year increase since early 2002, the group says.

People walk past new homes for sale in Oakville, Ont., in April. Nationally, housing sales increased by 18 per cent during the third quarter, the CREA says. (Nathan Denette/Canadian Press)
Building on two previous quarterly increases, seasonally adjusted home sales on the agency's Multiple Listing Service now stands 48 per cent above the low reached in the fourth quarter last year.

Quarterly activity increases in Vancouver (34 per cent), Toronto (11 per cent), and Calgary (19 per cent) were the largest contributors to the national increase.

Climbing to $327,736, the average price of a house in Canada rose 11 per cent from the same quarter last year.

The national average price continues to be skewed upward by a sustained increase in sales activity, including a sharp rebound in activity at the higher end of the price spectrum, in some of Canada’s priciest markets, the CREA said

The national average price surpassed all previous monthly levels in September 2009, rising 13.6 per cent year-over-year to $331,602. July and August also posted new average price records for their respective months.

A number of provinces set new average price records for September. Ontario posted the highest average price on record in the province.

An increase in sales activity and fewer new listings are drawing down inventories compared to year-ago levels.

Nationally, the number of months of inventory was 4.9 months in September, down slightly compared to August, and well down from the recessionary peak of 12.8 months in January.

House hunters still waiting for prices to drop further before buying may have sat on the sidelines too long, according to a new report showing home values have recovered across Canada to where they were before the recent market drop.

Economists agree and say the power has shifted to a seller’s market in recent months, after the buyer’s were in control for more than a year.

"(The) bounce back that began in early spring has made this recession one of the shortest on record for real estate," released Thursday.

The survey says values are ahead of record highs set in 2008 in seven of the 11 markets surveyed for the brokerage network.

The national average price was $312,585, up 0.5 per cent from a year ago.

low interest rates, pent-up demand, and improved affordability as a result of record low interest rates are behind the recovery.

"Purchasers are clearly taking advantage of affordable prices and rock bottom interest rates,".

"Those who missed the boat in years past have found that sitting on the sidelines can be a costly move."

Polzler said home prices are rising and the number of properties for sale is tightening.

The survey shows home values were up the most in Newfoundland and Labrador, by 18.1 per cent from January to August to an average of $203,584, followed by a 6.4 per cent rise in Regina to $244,088 and a 3.5 per cent rise in Halifax-Dartmouth and Winnipeg, to $239,633 and $207,006 respectively.

Values in Ottawa were up 3.3 per cent to $301,684, and up 0.3 per cent in Toronto to $385,978.

Sales are also soaring, up 14 per cent in Vancouver so far this year, followed by a 7.4 per cent rise in Victoria, 6.2 per cent rise in Edmonton and five per cent jump in Regina.

Sales were up a more modest 2.4 per cent in Ottawa in the period, followed by a 1.8 per cent lift in Toronto.

"There is no question that the housing recession was fast and furious, but so too has been the recovery," BMO Capital Markets economist Douglas Porter said.

Porter said existing home sales had plunged by about 40 per cent year-over-year last November through January, and prices fell by about 10 per cent on average across the country.

Since then, thanks in part to government incentive programs, particularly for new home buyers, the market has bounced back.

Earlier this year, Ottawa increased the amount first-time home buyers can withdraw from their RRSPs from $20,000 to $25,000, and implemented a tax credit for first-timers of up to $750 to help cover closing costs. It also introduced new tax credits of up to $1,350 for home buyers who do renovations.

To encourage the banks to lend money for home buyers when credit markets were tight, Ottawa also started an emergency mortgage purchase program where it swapped billions in mortgages for cash. Reports say that program will be extended.

Despite rising unemployment in Canada, now at 8.7 per cent as of August, Porter said home buyers are taking advantage of all the incentives and looking "beyond the valley of the recession" when making the purchase.

A look at factors that affect your insurance rate

Several factors are taken into account to calculate your property insurance rate. Some apply only to homeowners, but others are a factor whether you own a home or condo, or rent a place.
• Insurance companies consider these factors to estimate the likelihood that you – or others in similar circumstances – will make a claim, and what that claim will cost.
These are some of the main things that will affect the cost of your property insurance.

Location, location
• Whether you own or rent, where you live makes a difference.
• Insurance companies track claims by geographic location and use the information to adjust premiums accordingly.
• Based on past experience in your neighbourhood, they can determine how likely it is you will need to make a claim.
• If you live in an area with a high incidence of break-ins or vandalism, for example, your rate will be higher than what you would pay in an area where those things are rare.
Fire hydrant/fire station proximity
• Because fire is a major concern, it's an advantage to live near a fire hydrant or fire station.
• The closer you are, the better the chances of saving your property in the event of fire.
• In urban areas, proximity usually isn't a problem. But in more remote or rural areas, the distance may be greater, influencing the cost of your insurance.
Amount and types of coverage
• The higher the amount of coverage you purchase, the higher your premium will be.
• The type of package you choose – Comprehensive, Standard or Broad – will also affect the cost of your insurance.
• Insurance coverage for a condo owner will cost more than coverage for a tenant.
With a condo, your policy may have to cover your liability exposure for shared or common areas of the structure, which adds to the cost of insuring it.
• Optional coverage for specific items like a bicycle, or jewellery, will also mean a higher premium.
Amount of your deductible
• A standard deductible might be $500.
• If you choose a higher deductible ($1,000, for example) your insurance company may reduce your premium.
Security features
• An alarm system, smoke detectors, carbon monoxide detectors or other security features will generally get you a discount and help reduce your insurance premium.
Other factors for homeowners If you own a home, these are some of the other variables that may affect what it will cost to insure your property.
Replacement cost
• One of the biggest factors is the size of your house. The bigger your house and the more you have in it, the more it will cost to replace everything.
• Apart from the square footage, the quality of construction may also be a factor.
Heating
• With oil heating, you may have to pay more than you would with a forced-air gas furnace or electric heat
• The risk of leaks with oil tanks increases the potential for damage to your property as well as the potential for environmental hazards.
• Depending on the age and condition of your oil tank, you may be encouraged to replace it.
Electricity
A variety of factors associated with your electrical system can affect the risk of fire and, with it, the cost of insuring your property.
• Breakers pose less of a risk than fuses.
• If the flow of electricity into your home is less than 100-amps, it increases the risk of overloading and fire.
• Older types of wiring can also raise the level of risk, particularly if the wiringhas deteriorated.
Pipes
• Lead or galvanized pipes are usually found in older plumbing, which increases the risk of cracking, leaking or other damage.
• Copper or plastic pipes are considered less of a risk.
Wood stove
• Wood stoves can pose an increased risk of fire.
• Older model wood stoves, especially if they have not been correctly installed or maintained, are a common source of house fires and carbon-monoxide poisoning.
Roofs
• Roofs that are older than 20 years increase the potential for leaks and other damage.
• Some insurers will pay only depreciated values for roofs that are near the end of their service life.
Other considerations
How you use your home, as well as some structural features, can also affect your insurance cost. Here are a few examples:
• If you build or plan to build a rental unit into your home
• If you decide to operate a business from home
• If you make any other major changes to the structure or how it is used.
• If you have other structures on your property (a swimming pool, pool house, guest house or storage shed) that are worth more than 10% of the total insured value of your home.
Finally, here are a couple of things that normally do not affect the cost of your property insurance:
• The type of appliances (gas or electric) typically does not affect the cost of your home insurance
The exterior (brick or aluminum siding) is usually not a factor in calculating premiums, however, it is a factor when calculating the building replacement cost (i.e., the cost to rebuild with materials of like kind and quality, if the building were destroyed).