IN THE NEWS:
Home Prices Continue to Climb
The Canadian Real Estate Association stated that home prices were up 8% when comparing to last year. This is now the third straight month in which the average price of a home rose 8%. Some experts are warning this is primarily a result of strong investor demands and surging multimillion-dollar property sales in areas of Vancouver.In Toronto, the first quarter showed that condo rent was up 0.8% from $2.11 per square foot compared to $2.09 a year ago. According to a condominium monitoring report from Urbanation Inc., more than 50% of condominiums purchased in the last year were by buyers who do not intend to occupy their units but rather plan to rent.
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Mortgage Rules Push Home Sales Down 14%, April 2011 vs. April 2010
A rush of buyers eager to get into the housing market before new rules took affect caused a surge sales in March which caused sales to drop in April. "Changes to mortgage regulations that took effect in April 2011 likely sidelined a number of first-time home buyers," CREA's chief economist Gregory Klump said. The combination of lower sales and higher prices means in a nutshell that there are fewer buyers now than there were last year but those who buy are paying more.
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Market Update:
- TSX +49.71 to 13,441.06 (Reuters) led by mining and financial stocks despite indications of a slowing economy in the United States.
- DOW -68.79 to 12,479.58
o Poor economic data reinforced the impression of a slowing economy in the United States after the Commerce Department said construction of new homes fell 10.6 per cent in April from March to a seasonally adjusted annual rate of 523,000 homes. That’s down nearly 25 per cent from one year ago and less than half the 1.2 million homes per year that economists consider a sign of a healthy market. The U.S. Federal Reserve said also that the output of factories, mines and utilities was weaker than expected in April as a parts shortage due the Japanese earthquake led to a drop in auto assemblies
- Dollar +.17c to 102.82c USD
- Oil -$.46 to $96.91USD per barrel
o Crude has been heading lower for two weeks amid investor concern that slowing U.S. economic growth could undermine demand
- Gold -$10.60 to $1480.60 per ounce
- Canadian 5 yr bond yields markets -.03bps to 2.47. The spread (based on the MERIX 5 yr rate published rate of 4.19%) is above the comfort zone at 1.72.
