It's August and we're heading right into the traditional dog days of summer. It's a great time to relax with family, take that much-needed vacation or just chill at home. It's been quite an eventful year so far in the financial world, not only in Canada but globally as well.
Notwithstanding the economic meltdown in 2008, world economies, with the exception of Canada and Australia, have so far struggled to return to "normal". The US economy is still sluggish and its housing and job markets continue to fluctuate. European countries can't seem to get their economies working efficiently and are struggling with deficits and low productivity.
Here, in Canada, changes to the mortgage rules caught many of us by surprise. The real estate market has slowed in some areas, which could be a seasonal adjustment, and reports from mortgage brokers across the country confirm this, meaning in some areas of the country the real estate market continues to thrive.
The various provincial real estate associations have now reported that the second half of the year will be better than the first half -- that's good news. There was a slight slowdown for mortgage business right after the new mortgage rules were announced by Minister of Finance Jim Flaherty, most likely because consumers were taking a wait-and-see attitude. However, people are now taking advantage of the low interest rate environment and still purchasing homes.
If you like numbers, here are a few from the Canadian Real Estate Association (CREA). This number of newly listed homes climbed 1.4% from May to June. While sales over Multiple Listing Service® (MLS®) Systems in Canada eased 1.3 per cent on a month-over-month basis in June 2012, the housing market is still riding high, according to Wayne Moen, CREA president. "Sales activity and average prices in many local markets bucked the national easing trend." Some 42 local markets, out of 100 markets across the country, registered a monthly increase in new listings of at least one per cent.
Boosted by strong activity in March and April, a total of 257,193 homes traded hands in the first half of 2012. This is up 4.7 per cent from levels reported over the same period in 2011, and marks the strongest sales for the first half of any year since 2007.
Two-storey single family homes continued to post the strongest year-over-year growth in June (6.6%). Gains for one-storey single family homes were at 6%, while townhouses and apartments saw more modest gains (3.1% and 2.7% respectively).
Despite the recent rule changes, low fixed rates continue, thanks to the bond market as yields remain low, which makes it easier for lenders to offer these rates.
If you are considering buying, and wondering if it's a good time, consider this: There is no good or bad time to purchase. Mortgage rates and house prices will fluctuate, but over the long term, homeownership is a sound investment that compares well with other investments. It is both a commitment and an achievement that reflects your aspirations and lifestyle, and offers a great deal of personal satisfaction, as well as financial stability.
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