According to statistics released by The Canadian Real Estate Association (CREA), national resale housing activity edged higher in March 2012.

Highlights:

• Home sales rose 2.5% from February to March.
• Actual (not seasonally adjusted) activity stood 1.6% above levels in March 2011, the smallest year-over-year increase since last April.
• The number of newly listed homes eased 0.3% from February to March.
• While still well balanced, the national housing market tightened due to the rise in activity.
• The national average home price edged down 0.5% on a year-over-year basis in March.

Sales activity over MLS® Systems of Canadian real estate Boards and Associations rose 2.5 per cent from February to March 2012. The increase lifted national activity to its highest monthly level since April 2010.

Activity in March was up from the previous month in two-thirds of all local markets, with Toronto, Calgary, and Edmonton contributing most to the national increase.

Actual (not seasonally adjusted) activity stood 1.6 per cent above levels in March 2011, the smallest year-over-year increase since last April. It reflects moderate gains in a number of major centres, including Toronto, Calgary, Montreal, Ottawa, and Quebec City. Increases in these housing markets offset larger declines in Vancouver and the Fraser Valley, where activity last year ran at unusually strong levels.

A total of 108,373 homes traded hands in the first three months of the year. This is 5.0 per cent above the five-year average for first quarter sales, 3.8 per cent above the 10-year average, and 4.4 per cent above activity in the first quarter of 2011.

New listings were little changed following their uptick in February, having edged lower by 0.3 per cent on a month-over-month basis in March. The number of newly listed homes declined from the previous month in just over half of all local Canadian housing markets, and rose in almost all of the remainder.

“The spring housing market is off to a good start,” said Wayne Moen, CREA’s President. “The number of sales and newly listed properties are up from levels last year, and the vast majority of housing markets remain balanced. That said, all housing is local, so buyers and sellers should talk to their local REALTOR® to understand current and prospective trends where they live.”

The national housing market remains well balanced, although the monthly increase in sales activity caused the balance between supply and demand to tighten slightly.

The national sales-to-new listings ratio, a measure of market balance, stood at 55.1 per cent in March. This remains firmly in balanced market territory, but is up from 53.6 per cent in February. Based on a ratio of between 40 and 60 per cent, more than half of local markets were balanced in March.

The number of months of inventory stood at 5.7 at the end of March on a national basis, down slightly from 5.8 months in February. The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and is another measure of the balance between housing supply and demand.

The actual (not seasonally adjusted) national average price for homes sold in March 2012 was $369,677, representing a decline of one half of a percentage point from the same month last year.

“Average prices are up from year-ago levels in most large urban centres,” said Gregory Klump, CREA’s Chief Economist. “The slight decline in the national average price points to a tug of war between Toronto and Vancouver from the standpoint of their sales mix compared to last year.”

“The national average price was skewed higher last spring by record level high-end home sales in some of Vancouver’s priciest neighbourhoods. It was expected that this would not recur this spring, which the latest sales figures confirm. The decline in average price reflects the change in Vancouver’s sales mix, not housing price deflation.”

“At the same time, overall home sales activity in Toronto is stronger than it was last spring, and higher-end home sales are up from year-ago levels. Being by far the most active housing market in Canada, Toronto represents the single biggest factor supporting national average price compared to last year.”

PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month.

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.

MLS® is a co-operative marketing system used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 100,000 REALTORS® working through more than 100 real estate Boards and Associations.

The pace of Canadian housing starts was brisk in March, with construction of apartments and condos remaining strong — aided by continued low interest rates and unseasonably warm weather.

Canada Mortgage and Housing Corp. estimates in its March report that there were 14,517 actual starts last month, which translates to a seasonally adjusted annual rate of 215,600 units.

The adjusted figure irons out monthly variations and is calculated as if the March starts continued at the same pace for a year.

March's seasonally adjusted rate was up from 205,300 units in February — a five per cent increase.

CIBC World Markets said housing starts were higher than expected.

"Although we expect starts to soften in due course, the latest figures suggests that, for time being, the housing sector still has a considerable amount of energy, aided by low financing costs," CIBC said.

Meanwhile, the CMHC said the increase in March starts was due to a strong increase in multiple-unit starts, particularly in Ontario and the Prairies, partly offset by decreased multiple starts in British Columbia and Quebec.

Single-detached starts decreased marginally across the country. Both components remained well above year-earlier levels, CIBC noted.

Urban starts rose by 4.2 per cent in March to 192,100 units on a seasonally adjusted annual basis.

The Bank of Canada announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.

The profile for global economic growth has improved since the Bank released its January Monetary Policy Report (MPR). Europe is expected to emerge slowly from recession in the second half of 2012, although the risks around this outlook remain high.  The profile for U.S. growth is slightly stronger, reflecting the balance of somewhat improved labour markets, financial conditions and confidence on the one hand, and emerging fiscal consolidation and ongoing household deleveraging on the other.  Economic activity in emerging-market economies is expected to moderate to a still-robust pace over the projection horizon, supported by an easing of macroeconomic policies.  Improved global economic prospects, supply disruptions and geopolitical risks have kept commodity prices elevated.  In particular, the international price of oil has risen further and is now considerably higher than that received by Canadian producers.  If sustained, these oil price developments could dampen the improvement in economic momentum.

Overall, economic momentum in Canada is slightly firmer than the Bank had expected in January. The external headwinds facing Canada have abated somewhat, with the U.S. recovery more resilient and financial conditions more supportive than previously anticipated.  As a result, business and household confidence are improving faster than forecast in January. The Bank projects that private domestic demand will account for almost all of Canada’s economic growth over the projection horizon.  Household spending is expected to remain high relative to GDP as households add to their debt burden, which remains the biggest domestic risk.  Business investment is projected to remain robust, reflecting solid balance sheets, very favourable credit conditions, continuing strong terms of trade and heightened competitive pressures.  The contribution of government spending to growth is expected to be quite modest over the projection horizon, in line with recent federal and provincial budgets. The recovery in net exports is likely to remain weak in light of modest external demand and ongoing competitiveness challenges, including the persistent strength of the Canadian dollar.

The Bank projects that the economy will grow by 2.4 per cent in both 2012 and 2013 before moderating to 2.2 per cent in 2014. The degree of economic slack has been somewhat smaller than the Bank had anticipated in January, and the economy is now expected to return to full capacity in the first half of 2013.

As a result of this reduced slack and higher gasoline prices, the profile for inflation is expected to be somewhat firmer than anticipated in January.  After moderating this quarter, total CPI inflation is expected, along with core inflation, to be around 2 per cent over the balance of the projection horizon as the economy reaches its production potential, the growth of labour compensation remains moderate, and inflation expectations stay well-anchored.

Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. In light of the reduced slack in the economy and firmer underlying inflation, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate, consistent with achieving the 2 per cent inflation target over the medium term. The timing and degree of any such withdrawal will be weighed carefully against domestic and global economic developments.

With the Bank of Canada hinting that it might raise interest rates earlier than expected, the time is ripe for scary news stories about the impact on borrowers. It's safe to take most of them with a grain of salt.

First, any increases won't be starting tomorrow, or even next month. The guessing is that they'll begin around the end of this year. And they'll be gradual.

Most important of all, rising rates are actually good news, since they're based on the expectation of stronger growth in output, incomes and employment.

"If rates are rising by the end of this year, it will only be because we've had some good news on the economy,'' notes Avery Shenfeld, chief economist at CIBC World Markets.

That's not always true, of course. Sometimes in the past, rising rates meant that inflation was getting out of hand, requiring the Bank of Canada to crush this trend by squelching our spending harshly. But today, that's far from the case.

No, what we're seeing now is a much happier story than the one you'll see in most articles about rising interest rates. It's the story of an economy that's leaving behind the problems of recession and financial crisis and beginning to grapple with the much more pleasant problems of prosperity, including the need to ease off on exceptional monetary stimulus.

This country has done exceptionally well compared with most of our counterparts, but we did have to grapple with unemployment that shot up to 8.7 per cent at one point and a global economy whose collapse devastated our exports.

Today, though, unemployment is down to 7.2 per cent, thanks largely to a healthy Canadian banking system and the willingness of Canadians to ramp up big-ticket purchases like homes and cars thanks to bargain interest rates.

Even our exports are now recovering nicely, thanks to a long-delayed recovery in the U.S.

For this reason, economic forecasters, including those at the Bank of Canada, have been ratcheting up their growth expectations for Canada. The central bank expects growth to hit 2.4 per cent this year, up from its January forecast of just two per cent.

The International Monetary Fund chimed in with a similar upgrade for its Canadian forecast, to 2.1 per cent from a prediction of 1.7 per cent three months ago.

Some of the improvement stems from diminished fears that the European economy will implode and higher hopes for the improved growth outlook in the U.S.

But Canadian behaviour plays a part, too. Forecasters see business investment and consumer spending both boosting this country's growth significantly.

Since a good deal of that upbeat consumer outlook comes from a healthy housing market, however, it also raises questions about the record-high debt level of Canadian households.

Some think that this means we have a housing bubble that's just waiting to burst, perhaps triggered by rising mortgage interest rates.

Cooler heads point out that this is nonsense. First, it would take a big jump in interest rates to stress households so much that they'd start defaulting on mortgage payments.

"It's clear that the Bank of Canada is not going to rush headlong into a sizable tightening of monetary policy,'' says Shenfeld. He and other analysts expect rates to rise, if they do, by no more than 3/4 to one per cent over a period of several months before the bank pauses to see how this is being digested.

Second, Canada's mortgage market is nothing like the rickety, fraud-infested mess that came crashing down in the U.S. several years ago. Mortgages here are backed by fairly tough lending standards and often by government mortgage insurance.

At the moment, credit markets remain robustly healthy, despite the high debt burden. Bankruptcy rates are very low and mortgage defaults "extremely low,'' says Shenfeld.

And don't forget the upside of rising interest rates. There are many older Canadians who depend on their savings to provide retirement income and who don't want to venture too far into the uncertainties of the stock market.

The ultralow rates of recent years have been cruel to such savers, but there's now hope that GIC and savings-account rates will begin to improve over the next couple of years.

Once spring has sprung, take some time to give your home a checkup along with its annual spring-cleaning. Adding these home maintenance tips to your routine can help your house operate more efficiently.

Outside The House

Check The A/C
Have a qualified HVAC contractor come out to give your air-conditioning system a tune-up. To help lower your energy bills, do this every year to ensure the system is running at its manufacturer-rated efficiency. Also make sure to inspect your system’s condensate drain hose, especially if you live in a humid climate. This hose could become clogged with algae and sediment, and your contractor may charge you more to clean it out. Avoid this extra cost by checking the hose periodically yourself. Use a wet-vac to suction any blockage out from it.

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