Tighter inventory levels helped to make the last decade one of the healthiest periods on record for Canadian real estate, insulating markets in major centres from the peaks and valleys characteristic of past decades, according to a report released by RE/MAX.

The RE/MAX Housing Barometer Report measured monthly sales-to-new listings ratios in 18 major centres across the country from January 2000 to December 2010. The report found strong seller’s/balanced conditions prevailed for much of the timeframe, prompting significant gains in housing values. The lone exception was when the market dipped into buyer’s territory during the latter half of 2008 and early 2009. But fewer listings served to offset diminished demand and provided greater stability. 

Average price increases from 2000 to 2010 ranged from an annually compounded rate of return of 4.82% in London-St Thomas to a high of 9.56% in Regina. The national average was 6.82%. By far the tightest market in the nation was Winnipeg, where sellers ruled the roost for 85% of the decade, followed by Hamilton-Burlington (67%), Regina (63.6%), Kitchener-Waterloo (59.8%) and Edmonton (57.5%). 

Housing markets have been remarkably hearty over the past decade and the stage is set for a better than expected 2011. Inventory has proven to be an effective form of market self-regulation, providing both an ideal climate for price escalation and a shelter in periods of softer home-buying activity. As a number of city centres are already reporting stronger than usual activity out of the gate, it’s clear supply will continue to be the wild card in 2011.

 Click here for more details from RE/MAX.

The Canadian Real Estate Association has raised its sales forecast for the rest of the year, calling for a smaller decline than it originally expected as low interest rates keep buyers in the market. 

The association now expects sales to fall by 1.6% in 2011, compared to its November call for a drop of almost 9%. Prices are also expected to do better than forecast, with a gain of 1.3% instead of a slight decline. 

 “The hand-off going into 2011, together with the highs and lows for sales activity posted in 2010, provided guidance for CREA’s revised forecast,” said Chief Economist Gregory Klump. “The announcement of the new changes to mortgage rules will likely bring forward some sales into the first quarter that would otherwise have occurred later in the year.” 

 For 2012, CREA expects sales to slightly outpace 2011 and prices to advance by another 1.3%. The forecast is at odds with a recent report by Capital Economics, which said prices could fall by 25% in the next three years as interest rates rise. Several Canadian banks raised their mortgage rates by 25 basis points this week. 

Click here to read the full Globe and Mail article.

As consumer debt levels soar and baby boomers approach retirement, the federal government is looking at adopting a long list of measures designed to prod Canadians into making smarter financial decisions.

The measures recommended by a federal task force cover a wide range of initiatives. Employers who offer pensions would be required to automatically enrol employees and escalate their contributions, so that employees would have to opt out rather than opt in. Financial institutions would be forced to simplify and improve information available about everything from mortgages to mutual funds. Tax breaks would be offered for workplace financial literacy programs, and students would be taught more about debt if they take out a student loan.

Click here for the full Globe and Mail article.

You think you know that, right? With Monday’s announcements that TD Canada Trust and CIBC are raising some of their fixed-term mortgage rates by as much as one-quarter of a percentage point, let’s see if you do.

Rising rates will make affording a first home much harder – so much so that you’ll pay more even if housing prices decline. Higher mortgage costs will also shrink the cash flow of families that stretched to buy a home but were getting by in a low-rate world – potentially by thousands of dollars a year. 

People looking for a home face astronomically high prices in some cities, but they benefit hugely from very low mortgage rates. What a dilemma these people face – buy now to lock in manageable borrowing costs for a while, or risk higher mortgage rates while hoping for housing prices to fall. 

Click here to read more in the Globe and Mail