Plenty of Indicators that Housing prices will remain strong

That is the title of an article by Diane Francis published on March 9, 2010 on the Financial Section of the National Post.

After participating in a Real Estate round table with professionals in Toronto, as she discribes in the article, the consensus was that prices would continue to increase, bot as much as last year. Besides that, she continues, there wee some interesting tidbits:

. Foreign "hot money" from Middle East, Europe, Asia and the United States is propping up the market and increasingly pouring into Toroto and Vancouver.

. Repatriating Canadians, fresh from Manhattan and London, are buying expensive real estate back home...

. Small condo units continue to be snapped up by Boomers and empty nesters as investments for rental purposes, to eventually live in when they downsize or to house their offspring in starter homes.

. Buying interest is due to record-low mortgage rates, but also the massive transfer of wealth being handed down to Boomers from their parents.

. Both Toronto and Vancouver are the principal destinations for roughly 300,000 new entrants annually (both from abroad and other parts of the country).

Garth Turner, former Tory Cabinet Minister, also present at the round table, suggested the prices will drop when mortgage rates rise this summer, and because they're too pricey.

February Sales and Average Price Increase Annually

During last month of February, 7,291 sales were reported by Toronto Realtors through the Multiple Listing Service® (MLS®), representing a 77% increase over February 2009. The average price for these transactions was up 19 per cent year-over-year to $431,509.
Sales and average price increases represent both increased demand for ownership housing and the base year effect, which involves a comparison of economic recovery this year to a period of economic decline last year.
“Increases in existing home sales and average price were noted across the GTA in low-rise and high-rise home types. Similar rates of growth were experienced in the City of Toronto and surrounding 905 regions,” said TREB President Tom Lebour. “This suggests that first time, move-up and down sizing buyers are all active in the existing home marketplace.” New listings also increased in February, climbing 24 per cent compared to the same month last year.
“Annual growth in new listings is expected to continue. New listings growth will start to outstrip sales growth as we move through 2010,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “As the market becomes better supplied, we will see more sustainable single-digit rates of price growth.”