Global real estate prices slowed in the second quarter of 2010, but Canada had the most “dramatic” cooling off of all countries, says a report by the Bank of Nova Scotia.

Australia and Canada led the pack in housing price appreciation at the beginning of the year, followed by Sweden and the U.K. The U.S., Japan and Spain all saw declines.

But Canada has had the most severe decline in pricing in the second quarter, says the bank in a report released Tuesday.

“Demand and prices have softened alongside moderating global growth, heightened financial volatility and sluggish job creation,” said economist Adrienne Warren. “The slowdown has been the most dramatic in Canada.”

Average home prices in Canada in the first quarter were up 16.6 per cent year over year in the first quarter, but just 6.6 per cent in the second quarter, says Warren. Australian home prices on the other hand fell moderately to 15.3 per cent year over year in the second quarter compared with 16.8 per cent in the first.

And Canadian prices are not expected to have much support going forward.

“We expect demand to be at a lower ebb into next year and prices on average to be roughly flat,” said Warren.

While existing home prices took a breather in the second quarter, new home prices paradoxically continued to go up across Canada.

The new housing price index rose 0.1 per cent in June following a 0.3 per cent increase in May according to figures released by Statistics Canada Tuesday.

read more from http://www.thestar.com/article/845932–housing-market-continues-to-cool-down

After leading its peers in the global real estate rebound of 2009, Canada’s housing market is now cooling faster than any other country’s, and a new batch of data shows no end in sight, experts say.

An ultra-low interest rate environment combined with favourable jobs and lending conditions saw price tags in Canada and Australia rise nearly 17% year-over-year in the first quarter of 2010, a new report by Scotia Economics shows.

Sweden, the U.K. and Switzerland all saw moves to the plus side. The U.S. and France only reported marginal declines.

But since then, demand and prices have fizzled out as the pace of global economic growth becomes more moderate.

“The slowdown has been most dramatic in Canada,” wrote Scotia’s Adrienne Warren in the bank’s Global Real Estate Trends report, published Tuesday.

Average home prices in the second quarter were up just 6.8% year-over-year. That’s because pent-up demand from the recession seems to have run its course in this country and new listings are tilting overall market conditions back in favour of buyers, the report said.

“We expect demand to remain at a lower ebb into next year, and prices on average to be roughly flat.”

view more from http://www.torontosun.com/money/2010/08/10/14976946.html

Housing sales in the GTA fell by 34% in July compared to the same month last year, the Toronto Real Estate Board (TREB) reported today.

There were 6,564 sales last month, down from a record 9,967 sales in July 2009. New listings also took a hit, dropping to 10,825 — the lowest level for July since 2002.

Despite the lag, total sales for 2010 are still up 12 per cent from last year. A combination of factors played into the sudden dip, according to Jason Mercer, senior manager of market analysis for TREB.

“There’s been a lot of talk about the HST, but I think on balance, in the real estate market you’re seeing more of an impact from interest rates,” Mr. Mercer said. He explained many Ontarions were concerned about the additional cost of the harmonized sales tax on their real estate transactions, but two other monetary policies fueled the buying frenzy in the first half of the year.

For much of the year, the federal government was warning Canadians that interest rates would start rising in the late spring or early summer, which, Mr. Mercer explained, spurred a lot of people into signing fixed-rate mortgages. The government’s new mortgage lending policies, which require all mortgage recipients to qualify for a five-year fixed rate loan even if they opt for a variable rate, also pushed many buyers into the market in the first quart of 2010.

This one could be spectacular. The combination of Graywood Developments (Ritz Carlton, 8 Mercer), and Mod Developments (new company formed by the former head of Great Gulf – Michael Switzer) means this project has some serious pedigree behind it and the location is a can’t miss proposition.

Property Name: Five  Condos
Location: 5 St. Joseph
Occupancy: Nov 2014
Builder: Graywood & MOD Developments
Total number of units: N/A
Number of floors: 45

If anything kept him awake at night, says David Gerofsky, it was an overwhelming sense of responsibility.

“This is a larger-than-life project, and there were a lot of expectations,” said Gerofsky, president of the Great Gulf Group of Companies.

“So we had to do it right the first time.”

Gerofsky is talking about One Bloor. The mixed-use project at the intersection with Yonge St. has been the site of controversy since the original developer, Bazis International, became a poster child for the global economic meltdown last year.

“There is only one Yonge and Bloor. It’s not just the most important corner in the city, it’s probably the most important corner in the country,” Gerofsky said in an exclusive interview with the Star.

In advance of a Thursday news conference, Gerofsky talked about his company’s plans for the hotly anticipated project, and how he says it will transform the city.

The Star had a sneak peek at new renderings of the 65-storey, mixed-use building. They show how it will relate to the intersection upon completion – now estimated at the end of 2014.

The bold, futuristic building will feature a series of undulating curves designed by Hariri Pontarini Architects. The design is striking: More fluid and prettier than the original tower plans, but perhaps destined to create its own controversy over whether it fits into the landscape.

Interiors are by Toronto firm Cecconi Simone Inc., known for its cutting-edge style. Janet Rosenberg, one of Canada’s foremost landscape architects, is responsible for outdoor landscaping.

“We knew we had to get the design right – this had to be an iconic and special place,” said Gerofsky.

“This will be the most luxurious building in the city. We are sparing no expense.”

read more http://www.yourhome.ca/homes/realestate/article/784291–one-bloor-will-be-a-bold-futuristic-building

Sales of new homes in the Toronto area are expected to rise 30 per cent compared with 2009, while existing home sales should be up 2.5 per cent, according to a report released Tuesday by the Canada Mortgage and Housing Corp.

“We have entered this year with significant amounts of momentum as a number of temporary factors have boosted sales and prices in recent months,” CMHC economist Ted Tsiakopoulos said.

“But moving forward, the rate of appreciation will slow down as you have higher mortgage carrying costs, less pent-up demand and increasing supply pressures.”

The market this year will be the flip side of last year, which saw the market flounder in the first half before rocketing upward in the second half, CMHC analyst Shaun Hildebrand said.

“This year will be a very good first half, followed by a slower second half. Right now, we are having exaggerated rates of price appreciation as supply is tight and interest rates are low,” Hildebrand said.

The Bank of Canada left its key overnight rate unchanged at 0.25 per cent Tuesday, but adopted a more hawkish tone, suggesting that interest rates would go up sooner than later.

Meanwhile, housing starts and residential construction have trailed the existing home market, but low interest rates mean that single detached starts should do well in the first half of the year, CMHC said. As affordability becomes more of an issue, demand is expected to shift in the second half to condominium and row housing.

See more at Toronto Star

The loss of the subprime market has been held as one of the leading causes of the real estate market crash. Sub-prime mortgages were approved at an amazing rate by all mortgage lenders. Such loans involved using lending practices that put the lenders in a higher risk category, such as lending more money to borrowers to buy real estate than they really could afford, offering deals on the amounts of down payment required and offering loans at lower than standard interest rates. As a result, many of the major lending institutions found themselves in a credit crunch with many of the borrowers unable to meet their payment obligations. Companies were forced to declare bankruptcy putting millions of people out of work and forcing the lenders to foreclose on the mortgaged real estate.

The crash of the sub-prime mortgage industry has been the focus of news reports for the past year in Toronto and elsewhere. While millions of Toronto homeowners have been affected, no one is quite certain as to the initial cause of this real estate downturn.

read more at http://www.nicerealestate.com/toronto/2010/02/what-caused-toronto-real-estate-crash.html

I asked Jason Mercer, TREB’s senior manager of market analysis, if he expects to see similar annual sales increases throughout 2010.

Mr. Mercer feels that “sales in 2010 will be in line with 2009 levels, but this increase will be driven by activity in the first half of the year. With a strong hand-off from 2009, sales in the first half of 2010 will be brisk, including a record number of resale transactions in the first quarter. In the second half of 2010, however, we will see a bit of moderation, with lower sales compared with the record third and fourth quarter sales experienced last year. The cost of home ownership will start to rise, with mortgage rates increasing, the average home price continuing to trend upward and the average household income growing at a below-average clip.

read more at http://www.vancouversun.com/business/Resale+strength+hold+2010/2556511/story.html

“The GTA housing market has rebounded well from the lows in sales experienced at the beginning of 2009. Sales climbed back to healthy levels across the GTA because the cost of home ownership remained affordable in the Toronto area,” said TREB President Tom Lebour. “Increasingly confident consumers moved to take advantage of affordable home ownership.”

Read more http://www.marketwire.com/press-release/GTA-REALTORS-Report-January-Resale-Housing-Market-Figures-1111595.htm

Source: marketwire.com