Commercial Real Estate News Blog

With record money supply, budget deficit and national debt levels, many economists believe that the US will experience higher inflation pressures in the future. Commercial real estate has long been recognized as a strong hedge against inflation, and many professional investors encourage real estate...

In line with expectations of economists, housing prices rose more than 4% in May 2010 over the previous year. Industry analysts warned that the rise in prices could be due to the residual effect of the federal first time homebuyer tax credit and strong seasonal trends, and that the outlook for the housing...

Every major economist in the country expects the Bank of Canada to hike its key lending rate by 1/4% tomorrow (19 out of 19 economists to be exact, according to...

Economic worries have led major economists to slash their long-term interest rate predictions. The big banks’ average forecasts for Canada’s overnight rate and 5-year bond have plunged 60 and 57...

Economists React: June Jobs Report ‘Bereft of Good News’

Major economists expect Canada’s overnight rate to rise to 1.25% by year end—according to a Bloomberg survey. That’s down from a May projection of 1.50%. (The overnight rate is currently...

The bond market continues to defy economists’ expectations (no news there). What is news, is that the 5-year yield has fallen to 2.30%, well below technical support at 2.40%. Disappointing...

25 of 27 economists surveyed by Bloomberg expect the Bank of Canada to lift short-term rates by 1/4 point tomorrow. Overnight index swap (OIS) traders are betting on higher rates...

Residential sales slipped 2.6 percent from March.

Canadian home resales slowed in April from the previous month while new listings climbed, suggesting the country's real estate market could soon start to cool after a year of surging prices. Even so, sales of existing homes still showed a big jump from the same month last year, according data on Monday from the Canadian Real Estate Association, with prices rising at a double-digit pace year over year.

Residential housing has become an important driver of the Canadian economy, even during the recession, spurred partly by low interest rates. It also gave rise to a fiery debate on whether the housing sector was forming a bubble, a charge that policymakers swiftly downplay.

All told, 42,078 homes changed hands in April, up 20.1 percent from the same month last year. But sales slipped 2.6 percent from March, the third decline in four months, and have fallen 6.8 percent from the peak reached in December.

The cooler pace of activity is in line with a long-held view by many economists, who see the market slowing after the spring as more homes are put up for sale and interest rates begin to rise.

Some homeowners may also move sooner in order to avoid extra costs associated with new, harmonized sales tax (HST) regimes, set to begin July 1 in Ontario and British Columbia, and this could add to a front-loaded year of sales and pricing activity.

"Prices may see one last uptick in the next few months, but are expected to simmer down notably in the second half," said Doug Porter, deputy chief economist at BMO Capital Markets.

"Indeed, outright price declines are certainly a very real possibility in Ontario and B.C. amid much more moderate activity after the HST kicks in."

CREA said a slowing market in British Columbia was responsible for more than half the decline for the year. Ontario and Quebec, two of the country's larger markets, remained close to record levels in April.

The number of new listings rose to 99,901, surpassing the previous April record, set in 2008, by 0.6 percent. The average national price rose 12.2 percent to C$344,968 ($331,700). The rising supply of homes for sale could dampen prices in the months ahead. Sales may also cool as higher mortgage rates and rising prices chip away at demand, and overall housing investment falls into line with the broader economic recovery.

"The pace of moderation is expected to be measured and orderly," said Millan Mulraine, a senior strategist at TD Securities.

Source: Canadian Real Estate Association

No one foresaw this degree of job creation. April’s 109,000 new jobs set a record for a single month and crushed economists’ median estimate of 25,000. In percentage terms, it...