SOURCE: Michael Polzler, Re/Max Ontario-Atlantic Canada Inc.

There’s been a lot of talk about real estate in the news in recent months. We’ve heard about declining housing starts, falling existing home sales, double-digit price depreciation, subprime fallout and foreclosures – in the United States. Fortunately, we live in Canada. And Canadian real estate markets are far-better positioned than their American counterparts for a good number of reasons.

1. Subprime mortgages represent less than five per cent of our market nationally.
2. Foreclosures occur in about one quarter of one per cent of mortgage transactions in this country.
3. Canadians have more equity in their homes.
4. We have less debt than our neighbours south of the border.
5. Speculation has played little or no role in existing home sales in Ontario.
6. The fundamentals of our economy are relatively solid. Of the G8 countries, only Canada is expected to show growth in 2008 and 2009.
7. The Canadian banking system is one of the best in the world, relying more on old-fashioned lending than innovative financial products geared toward profit.
8. The Canadian job market is stronger than the US, adding more than 200,000 jobs so far this year.
9. Interest rates remain favourable.
10. Housing values in Ontario major centres did not experience serious, double-digit price appreciation year-after-year for an extended period. Our markets were characterized by stable, healthy growth.
11. Immigration continues to play a key role in housing markets. Between 2001 and 2006, more than 1.1 million immigrants came to this country, with about half settling in the province of Ontario. Immigrants tend to purchase a home within the first five years of living in Canada.

Real estate is cyclical. There will be peaks and valleys. The more restrained the peak, the more modest the valley.

There is no question that market conditions have moderated from 2007’s record pace. More listings, softer housing values, longer days on market – but most centres are relatively solid. While some buyers and sellers will adopt a wait-and-see attitude, there are those that will continue to venture forward.

They’ll need the services of a knowledgeable, experienced real estate professional to navigate the storm. They will look to you for information in today’s complex real estate environment. Understanding market conditions will be of paramount importance to today’s buyers and sellers, especially as conditions change in markets across the country.

That said, sellers will need to be realistic in setting a selling price. Listing a property at fair-market value will ensure that it will sell in a reasonable amount of time. This is not the time to test the market. Those that are truly interested in selling their properties know that over-priced homes risk stagnation. Buyers in today’s market will need to be careful not to overextend themselves. They should know exactly what they can afford. Pre-approval for a mortgage loan is ideal because it lets buyers know exactly how much they can spend on their new home.

Once educated, your clients will come to rely on your expertise. Make sure your follow-up skills are honed and your customer service is par excellence.

Looking forward, we anticipate a continuation of stable market activity, minus the urgency present in past. Gone are the multiple offers that left both buyers and sellers dissatisfied. The increase in the number of homes listed for sale are a definite advantage for purchasers who now have the luxury of time in making one of the most important decisions of a lifetime. For sellers, the time to trade-up has never been better.

Canadians are great believers in homeownership – a fact underscored by the close to 70 per cent who own homes in this country. History has proven time and time again that real estate is a solid, long-term investment that appreciates at a rate of about five per cent annually. You can’t live in your mutual fund, and after the last month in the financial markets, quite frankly, we’re not sure you’d want to.

KITCHENER – Sales of residential properties in Kitchener-Waterloo and area declined 5.7 percent during the first six months of the year, while the total value of those sales increased 0.5 percent to $930 million.

June 2008 sales

The 9.2 percent decline in the sale of single family detached homes was tempered by a 1.3 percent drop in sales of attached homes.

While sales to the end of June stand in contrast to the record pace of 2007, results to date in 2008 remain favourable relative to projections by the Canadian Real Estate Association that sales on a national basis are expected to decline by 11.5 percent this year.

The decline in home sales was limited to properties selling for less than $225,000. By contrast, there were 2,179 sales of residential properties for more than $225,000 to the end of June, compared to 1,958 for the same period in 2007.

Also bucking the slower sales trend was the demand for condominium units, the sales of which increased 7.9 percent to the end of June for a total of 644 sales.

In a similar vein, homes selling for more than $500,000 experienced triple digit increases relative to sales one year ago.

The average sale price of all homes sold between January and June 2008 jumped 7.5 percent to $264,888 during the first six months of the year. Similarly, the median price of home sales to the end of June increased 6.5 percent to $242,000.

The average sale price of single family detached homes to the end of June was $302,905, a 7.9 percent increase. The median sale price of these same properties increased 7.0 percent to $272,000.

“Residential sales remain healthy despite falling short of the records set last year,” says Karen Shartun, President of the Kitchener-Waterloo Real Estate Board. “I expect demand for higher priced homes to be the key driver of sales as we work through this period of economic uncertainty.”

Shartun continues to believe that residential property sales in Kitchener-Waterloo and area will outperform national sales results, demonstrating the consumer confidence in local real estate and an economy that is better positioned to weather the recessionary threats.

Other residential real estate sales-related highlights from the first half of 2008 include:

• a modest 1.5 percent decline in the 5,591 new listings processed;

• an 8.3 percent decline in the average number of days for listing on the market; and,

• strong consumer interest in cooperatives and link homes.

“Expanding this Land Transfer Tax refund is an important part of our government’s commitment to helping Ontarians buying their first home,” Duncan said.

Effective midnight tonight, first-time buyers of resale homes, as well as newly constructed homes, would be eligible for a refund from the provincial government of up to $2,000 of the Land Transfer Tax paid.

The expanded Land Transfer Tax Refund Program for First-time Homebuyers is part of a package of new tax initiatives announced in the 2007 Fall Economic Outlook and Fiscal Review that would provide $1.4 billion in provincial tax relief for business and people over three years.  The government is making strategic investments in people, communities and infrastructure to strengthen Ontario’s economic advantage and help manufacturers and other sectors challenged by current economic conditions.