*New home prices rose more than expected in September as Canada’s real estate market showed further signs of recovery.
*Statistics Canada said last Thursday its price index rose 0.5% during the month – the biggest monthly increase since January 2008 – following a 0.1% gain in August. Economists had forecast an increase of 0.2% in September.
*Prices rose the most in Vancouver, up 1.4% from August, followed by Ottawa-Gatineau, up 1%. Calgary was 0.6% higher, and Toronto, Oshawa, ON and Saskatoon were all up 0.5%.
*The biggest declines were in Windsor, ON, down 0.7%, Sudbury, ON and Thunder Bay, ON, both down 0.5%, Victoria, off 0.2%, and Edmonton, where prices were 0.1% lower.
*Yesterday CAAMP released its fall consumer report, the Annual State of the Residential Mortgage Market in Canada.
*The report, compiled by Will Dunning, CAAMP’s Chief Economist, reveals that overall Canadians are optimistic yet cautious about the housing market rebound.
*Canadians are decidedly more optimistic this year about whether now is a good time to purchase a home: 61% feel that it is, nearly double the response from this time last year when only 38% felt that way.
*The report found two thirds of all mortgages are fixed for terms of four or more years, with five-year terms remaining the most popular at 56%. Many people who took out a mortgage in the past year, however, chose a shorter term, with 20% at one year or less.
*68% of mortgage holders have fixed-rate mortgages, while 27% have variable- and adjustable-rate mortgages. Fixed-rate mortgages are the most popular among people between the ages of 18 and 34, while those in the 55+ age group are more likely to prefer variable-rate mortgages.
*Canadians take out equity for two primary reasons according to the report: debt consolidation and renovations. One third of Canadians said the home renovation tax credit influenced their decision to renovate and 30% of equity taken out in the past year was for renovations ($12 billion of the total $41 billion in equity takeout), with an average take-out of $41,000).