The Canadian Press

The operator of Royal LePage says the market for Canadian houses is poised for an upward swing this year but the condo market will remain soft awhile longer.

The chief executive of Brookfield Real Estate Services says the market is in the late stages of a downward trend that resulted in fewer houses trading hands.

Comment: Amazing prediction after watching sales reverse the lower trend and start to rise. I predicted it a year ago!

Sales volumes for houses will begin to trend upward in late 2013 and house prices will strengthen, with increases returning to long-term averages but the condominium sector may continue to see “softness” in the short term, Brookfield’s Phil Soper said in an earnings announcement Wednesday.

Comment: Sales volume began to trend upward in June, far ahead of late 2013. And by softness, you mean slow price appreciation, or flatness. Let’s be straight here, prices are not going down (haven’t for pretty much 17 years now) and sales are back on the upward trend. Softness just means slower growth, not negative growth.

“While we have seen modest price appreciation recently, homebuyers have been taking a slightly cautious stance as evidenced by lower sales volumes in many regions across the country for the quarter,” Soper said as Brookfield Real Estate Services announced a lower second-quarter profit.

Comment: They have not been cautious as much as they have been forced to wait by the new mortgage rules introduced last year.

The low interest rates that Canada has been experiencing are appealing for would-be buyers but consumer confidence hasn’t completely rebounded, Soper said.

“Nevertheless, indicators point to a steadily improving economy that will help the market return to historical sales volume and house price appreciation averages.

Brookfield profit up

The comments come as Brookfield Real Estate Services Inc. reported $3.4 million of net income in the second quarter, or 36 cents per share. That was down from $7.9 million or 83 cents per share a year earlier.

Brookfield Real Estate Services is a publicly traded subsidiary of Toronto-based Brookfield Asset Management, which is primarily focused on real estate, electricity generation and the forestry sector through its holdings.

Brookfield says royalties received from its brands, which include Royal LePage, Johnston & Daniel and Via Capitale, dropped to $9.7 million in the second quarter from $10 million a year earlier.

“It is the view of management that we will see sales volumes start to trend upward on a year-over-year basis in late 2013, and as we work our way through 2014 we also expect to see house price appreciation return to long-term historical averages,” Soper said.

“The condominium sector may see some softness for the near term as the market absorbs new supply,” said Soper. “In the longer-term, however, we believe that changes to demography, city planning and customer preferences all presage positive growth for this category.”

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

Laurin Jeffrey is a Toronto Realtor 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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