We have been hearing about a housing market that is heating up, to the extent that Federal Finance Minister Jim Flaherty is considering stiffening up-front mortgage qualifications to help fend off a resurgence of a real estate bubble. The issue for the minister, is a fear that rising debt among Canadians could lead to thousands of homeowners becoming overextended on mortgage payments when they can’t really afford to own a home.
A Vanier Institute of the Family study found the average Canadian family’s household debt rose to $96,000 last year, along with a dramatic rise in late debt payments – a 50 per cent increase in mortgages running 90 days or more in arrears in 2009 compared to the previous year. And the number of credit card holders at three or more months behind in their payments was up 40 per cent during the same period.
There is no doubt this is a troubling trend and there is no question action must be taken so we don’t see the same type of economic meltdown we recently witnessed south of the border. But the fact remains if you are financially stable, real estate remains one of the strongest and best forms of investment you can make. If you are selling your current home to purchase your dream home, having a knowledgeable broker is perhaps more important than timing. Prices can swing one way or the other fairly quickly, but choosing a broker who is skilled at marketing your property and can expertly negotiate the best deal on your behalf are far more critical than trying to time your deal.
We continue to see solid market conditions in Oakville and Burlington. For an overview of Oakville’s real estate market conditions, Jeff Mahannah, President of the Oakville, Milton and District Real Estate Board (OMDREB), recently offered this insight. “There is some debate about whether the property market in Canada is heating for a housing bubble, but I believe that is very unlikely. The Canadian Real Estate Association is forecasting sales will jump by seven per cent this year, much of that because the first few months of 2009 were relatively weak. Prices are expected to rise 4.7 per cent and momentum in the housing market is expected to carry through the first quarter of 2010 before home sales begin to moderate as a result of eroding affordability and less pent-up demand.”
Here is a snapshot of the Oakville market today compared to a year ago. According to the OMDREB, the number of residential sales in Oakville jumped by 133 per cent in January compared to the same month a year ago. And the average price rose by 25 per cent, from $474,772 in 2009 to $594,986 this past January. To put this into context, we can look back at 2007, before the recession began and prices were at their peak. Oakville house prices are still three per cent lower than what they were in 2007. That may not last long, however. Mahannah explains that the current strength of the Oakville market will continue to hold its own and live up to the Census Canada findings of being the “fastest” growing community in Canada.
In Burlington, the real estate market saw a 58 per cent increase in resales in January compared to the same month last year. The average price of freehold residential properties sold in the month of January was $302,474, an increase of 10 per cent over the same month last year, and 1.25 per cent over last month. In the condominium market the average price of condominiums in January was $230,583, an increase of 10 per cent from January 2009, but a decrease of 4.5 per cent from last month. “While the January market performed at levels that are more normal, we are looking forward with caution, as there is still a great deal of economic uncertainty surrounding us.” says Joe Ferrante, Realtors Association of Hamilton-Burlington President.
Dan Cooper is an award winning Broker with Royal LePage Real Estate Services Ltd., Brokerage – the Number 1 Royal LePage Team for Canada in 2009. He can be reached at 905.338.3737, direct line at 905.849.3303 or through his innovative and interactive website at DanCooper.com. Be sure to catch the Dan Cooper Real Estate Series on DailyWebTV.com. For his free booklet How To Sell Your House For Top Dollar – Fast! or his Guide to Oakville Real Estate, please call the Dan Cooper Team.