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Real Estate Market Watch: Can we keep this going? Is the GTA’s Real Estate market sustainable?

September 11, 2009

Once again, more signs or questions of the certainty that we are out of the worst of this recession are surfacing. Now, the Real Estate industry across Canada is having a hard time swallowing that there’s been a complete turnaround in the Real Estate housing market.

When 1,153 agents and brokers were surveyed across the country about whether they thought the housing market’s recent performance was sustainable, only 707, or 61% said yes. Another 28% said no and 11% didn’t know.

The truth when it comes to our local Real Estate markets in Oakville, Mississauga, Toronto and the rest of the GTA is that this kind of widespread, small sample surveys of brokers and salespeople across Canada sheds only a glimmer of light on what is truly happening here at home.

I’ve been preaching now for a while that national statisctis and information on the Real Estate market should be taken for what they are – averages of different market conditions in a wide range of cities and communities across Canada.

Yes, Canadian housing sales have climbed 18.2% in July and again in August from a year ago and are now on pace to beat 2007 sales, a record year. This dramatic recovery and ‘strong home sales numbers’ comes after sales were all but frozen over the winter, with January 2009’s activity at a decade low.

The trouble is in many areas across Canada, housing prices are still declining. In Ontario and in particular Oakville, Toronto, Mississauga and the GTA as a whole, housing prices are not declining right now.

Our median and average prices are rising and year-to-date up, granted less than 0.5% from last year, but still UP. So while for many affordability is improving, here in Oakville and Mississauga, many people are feeling locked into their homes. If they were to sell their home or condo, they would find themselves having to pay more in many cases.

In the survey sample. of the real estate agents who don’t believe the market is sustainable, 36% said the recovery will end when interest rates climb which they say is inevitable. Another 20% of those who don’t believe in the housing recovery said there has not been enough job growth to sustain the real estate sector.

This is important. There are a number of reports of improved economic factors like employment rates or rather the slowing of unemployment, but there are still many, many companies that are under wage freezes and budget tightening. How can housing prices continue to rise away from incomes??

Do you think the Real Estate market has recovered in Oakville and Mississauga?

What are your thoughts about the current cost of housing in Oakville and Mississauga?

Read Garry Marr’s entire article “Even Canada’s Real Estate industry questions housing turnaround” in the Financial Post – Septemeber 10, 2009

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