3. The roller-coaster real estate market
It's safe to say Canada's housing rebound exceeded expectations this year with soaring sales and prices across the country. While the early months looked dismal - national house sales fell 37 per cent in January compared to a year earlier - spring saw a rebirth of consumer confidence that exploded throughout the summer and fall (the Canadian Real Estate Association said national resale housing activity climbed to the highest level of any third quarter on record).
"MLS sales in Canada in January were just under 317,000 and by August, the number was about 509,000. That's almost a 61 per cent rebound in activity that I don't think anyone predicted," says Bob Dugan, CMHC chief economist.
But even with the real estate pick-up, the slow start put many brokers in a tough position. Nadine
Jackson, a mortgage agent with Mortgage Intelligence in Halifax, says her business is down from last year and she has only very recently seen things start to pick up. For Lisa Manwaring, the housing rebound - which was accompanied by buyer competition and multiple offers - provided another set of challenges.
"We had lenders saying they wouldn't fund a deal for 10 days after receiving all final conditions, so it was tough because you had Realtors negotiating extremely tight turnarounds. They're telling you they need a subject removal in two days and that they're going to complete in two weeks, and then you had lenders who were saying, 'I don't think so,'" she says.
Experts agree the fast pace of home sale activity seen in the latter half of the year isn't sustainable, especially with affordability, the main factor cited for causing the housing frenzy, sliding due to rising prices and mortgage rates. New listings also remain low compared to last year. But it's safe to say the worst of the slump (think back to January) is over.
"There is a clear indication based on the strength in the existing homes market that things are getting back on track from the downturn we experienced in the first half of the year," says CMHC's Dugan.
Next up: The ups and downs of the three mortgage insurers
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