The alternate view held by some observers: the market has hit its peak, consumer confidence is waning, and sales may be headed for a slowdown.

Comment: Sure, the market is always hitting its peak… then it goes up again. And again. This “alternate”

Susan Pigg – Toronto Star

Lower interest rates could keep Canada’s two biggest housing markets — Toronto and Vancouver — buoyant for some time, even as slumping oil prices take their toll in Calgary and Edmonton where sales are dropping and prices are expected to follow.

That’s the prediction of long-time housing bear and Capital Economics economist David Madani as monthly house and condo sales figures for January started rolling out across the country this week.

Comment: Sure, but he has been wrong for close to 4 years now. In June 2011 he said Toronto real estate prices would fall 25%. Yet, they have risen MORE than that since he made his incorrect prediction. Why do we keep talking to someone who is wrong in everything they say? Every prediction he has ever made has been wrong. Just because there is one person who makes claims against all evidence does not make them the voice of the other side. It means that there is one crazy person who makes outlandish claims that are never right. It means we all need to stop talking to him, or about him, and leave him to be wrong in obscurity.

Consumer confidence is now taking a beating in Edmonton and Calgary, where home sales fell 26 and 39% respectively in January. That could translate into a 15% downturn in prices for Calgary, he added in a note released Wednesday.

Comment: Sure, maybe in one or two cities. But I think we can all see that economic problems in Alberta will lead to problems.

But both Toronto and Vancouver could see an even further uptick in sales, especially if the Bank of Canada overnight rate drops another quarter of a percent in March, just in time for the peak spring market.

A 50 basis point drop in the five-year mortgage rate could drive a 5.5% quarter-on-quarter increase in home sales, added Madani. But across Canada, he’s predicting a drop in sales and a 2% decline in average house prices this year.

Comment: Let’s all mark that down, because he will be wrong again. He is wrong every year.

January may have been bitterly cold, but the lack of snow brought buyers out in droves, with the Toronto Real Estate Board reporting “a strong start to 2015” in sales figures released Wednesday.

The composite benchmark price of a home in the GTA rose 7.5% in January, year over year, bringing the average sale price to $552,575. Sales were up 4.9% over January 2014, says TREB.

“I’d say, if anything, buyers are a bit more excited than they were two months ago because of lower interest rates,” says Toronto realtor David Fleming. “A lot of what’s happening in the Canadian economy around oil prices and job losses is not having a direct impact on the Toronto market.

Comment: Maybe it is lower interest rates, maybe it is just the market continuing to be strong. Supply is still not enough to satisfy demand, with listings down again in the 416.

“The same old problem is still listings: I have 16 active buyers who would all buy the right property if it were available.”

Comment: Same here, my friend.

TREB is even predicting that demand for condos will be “robust” throughout 2015, enough to drive price growth above inflation.

Comment: Of course it will be robust. Many who cannot get a house to buy will buy a condo instead. Those who can’t afford houses will go to condos. The strength of the rental market will send more investors to the condo market. Lastly, with all the new condos built over the past 10 years, there are simply more and more of them out there.

New listings were up 9.5% in January, although active listings — the combination of new and previous listings still unsold — were still down 2.5% year over year, which means the market remains tight.

Comment: And that includes houses and condos, 416 and 905.

Mortgage broker Joe Sammut of Mortgage Architects says he’s seen a dramatic pickup in applications for pre-approvals, just since the recent drop in the overnight Bank of Canada Rate to 0.75%.

The weak dollar has also had an impact, with more Americans looking to buy second homes or future retirement properties north of the border.

“I’ve had two American buyers in the last week say, ‘Okay, my affordability has just gone up $300,000 because of the exchange.’ One is a couple from San Francisco who have been sitting on the fence for eight months and are now ready to pull the trigger because they’re looking at 21 cents on the dollar.”

Some realtors are even expecting an early spring market.

“Buyer sentiment remains very favourable in terms of the overall economy in the GTA,” says high-end realtor Paul Maranger of Sotheby’s International Realty Canada. “I think Ontarians are looking at oil prices in terms of how much they are saving on gas and heating their homes.”

Comment: Not that many people use oil heat, those of us with gas heat are not saving a cent.

Detached-home sales across the GTA were up 7.1% in January and prices up 4.2%, to an average of $716,127.

Semi-detached sales were up 0.7%. The average sale price of a semi across the GTA was up 7.8% in January, year over year, to an average of $520,510.

Townhouse sales were up 0.6% and prices were up 8% across the GTA, although sales spiked by 14.5% in the City of Toronto, bringing the average price to $440,058 across the GTA and $502,267 in the 416 region.

Condos recorded the highest sales growth of all housing types as more people find themselves priced out of the low-rise house market: Sales of those were up 11.2% across the GTA and prices climbed an average of 3.6%.

That brought the average condo price to $382,458 in the City of Toronto, up 4.5%, while prices averaged $310,045 in the 905 regions, up 3.6%.

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Contact Laurin Jeffrey for more information – 416-388-1960

Laurin Jeffrey is a Toronto real estate agent with Century 21 Regal Realty.
He did not write these articles, he just reproduces them here for people who
are interested in Toronto real estate. He does not work for any builders.
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