Short Sales

Short Sales, Foreclosures, and the Recession don’t just effect the US housing market, they have also had an impact on the Real Estate market of the Great White North.

The Canadian condo market has been hit hard by the worldwide financial plight, far more harshly than other sectors of real estate in the country. Rural sectors have experienced an rise in house starts, and there has been long-term progress in starts of single family buildings, but the scale of building of apartment buildings and condos in Canadian cities, like  downtown Toronto condos, has declined.

There was general decrease of 1.5 percent, during March, in the amount of real estate starts, mainly due to the decline in multiple family building development. This was the first time that there had been a drop in housing starts in 2010. January and February had strong growth ratios of 7.5% and 6%, respectively. There were 189,000 starts in January and 200,400 in February, but just 197,300 in March.

The decrease in housing starts has been the largest in the urban parts of the country. Some rural sectors have continued to see an increase in construction, even as the national average has fallen over into a decline. House starts in urban areas declined by 4.2% in March, as starts in rural areas increased from 17,600 in February to 22,100. This demonstrates the changes in starts of multiple family properties, which are usually constructed within a city or in its suburbs. Rural homes tend to be single family homes.

Starts of single family properties increased for March by 6.9%, while there was a drop of 15.2% in starts of multiple unit buildings. Single family unit starts reached their tallest point in four years during March, after eleven months of continuous growth since their lowest point during April 2009.

There has been a significant reduction in multiple residency building construction in the Toronto area over a few consecutive months, with a marked decline in popularity in building high rise apartment buildings and Toronto condominiums. This decrease was evened out by a rise in starts of single occupancy residences in rows and low rises in the Toronto area, but, reflecting the overall picture nationwide.

Shaun Hildebrand, the Canada Mortgage and Housing Corporation expert in market examination for the Toronto area expressed an opinion that things would be different soon. The rising demand for less costly kinds of housing in the immediate area is likely to translate in the building of more condos, he said.

Starts of multiple family buildings do tend to vary more uncontrollably than those of single family houses, with variations occurring much more quickly. Bob Dugan, head market analysis economist for the CMHC (Canada Mortgage and Housing Corporation) believes the market for condos in Canada to be a volatile one.

The notable reduction in starts of multiple unit real estate in March followed a fall of 0.5% in building permits in February, which was largely the result of a decrease in applications for permission to build new apartments and condominiums.

Many experts say that the condo market dictates the real estate market. As in the condo market will be the first to recover, followed by single family homes. It’s important to watch the trends of Condo Sales.