Canadian Residential Property Sales Declined in May

Canadian residential property sales declined last month, and were
down by 3.1% compared to April, according to data from the Canadian
Real Estate Association. This is the first monthly decline since the
beginning of the year, but activity levels were still slightly above
the five and 10 year averages for May, showing the housing market is
still in reasonable shape.

The average price for a house sold last month was $375,605. This
is a 0.3% decline compared to May 2011, and although the national
average has remained pretty flat since last spring, sales prices have
increased in seven out of ten local Canadian markets.

Toronto is still Canada's most active housing market, and property
is selling quickly, but sales and average prices are also up in
Calgary compared to May last year. In comparison the rest of the
market in Canada has seen only modest growth, and market conditions
remain balanced. The number of newly listed homes has changed little
during the past three months, and listings were up just 0.3% compared
to April.

The number of new listings for the month was static in 49 markets,
and eased in 52 markets. The new listing to national sales ratio,
which is a measure of market balance, was 53.4% in May, slightly down
from April when the reading was 55.3%. National inventory levels were
at 5.9 months at the end of May, which is a slight increase on
April's 5.7 months. Experts consider housing supply and demand in
Canada to the balanced.

New Canadian mortgage rules may affect market

Foreign mortgage insurance companies have only been allowed to operate in Canada since May 2006, and with these new regulations came a more liberal view of borrowing practices. Prior to this date it was impossible to get a mortgage without making a minimum 25% deposit, but now it became possible to get mortgages without deposits, and also to repay these mortgages over a 40 year term.

This had the effect of heating up the property market, so in the summer of 2008 the government took steps to cool it by reducing the maximum mortgage term to 35 years alongside a requirement of a 5% deposit. These actions had the effect of protecting Canada from the worst of the US sub-prime mortgage market as the government also purchased the billions of dollars’ worth of insured mortgages in order to give the banks breathing room.

The housing boom in Canada was able to continue due to low interest rates, prompting the government to introduce minimum deposits of 10% for homeowners while investors must make a deposit of 20% or more. New laws introduced last week will take effect in March and will lower the mortgage terms to 30 years which some feel may dampen down the housing market.

While this may be true there are certain areas that may always buck the trend, especially in ever popular Vancouver. The average price of a home here it over $1 million, and a dilapidated property recently went on the market for just over $1 million, but created such interest that the eventual selling price was over one and a half million dollars. Part of the reason for high prices here is the popularity of the city with investors from the Far East who have money to spare from their own booming economy.

Canada Signs Free Trade Deal With Panama

Canada has signed a free trade deal with Panama, which will immediately slash tariffs on exports between the two countries by up to 90%.

The deal will be mutually beneficial, because, though Canada exports far more than it imports from Panama and vice-versa, both will be able to import goods cheaper, because prices will not have to factor in the tariffs.

Panama's imports from Canada, and many other places around the world are vital to its economic emergence.

Panama's economy grew by over 9% last year, and is expected to grow by over 3% this year according to the International Monetary Fund. Therefore this is a savvy move by Canada, as Panama's imports are likely to drop by a lesser margin than that of recession-hit countries.

The US proposed a similar deal with Panama last year, but it has been stalled and now looks likely to be shelved in favour of new policies by the Obama administration.

In 2008 Canada's top goods exports to Panama were:

• Vehicles, including diesel
• Electrical and electronic equipment
• Aerospace (primarily flight simulators)
• Pharmaceuticals
• Pulses (primarily lentils)
• Frozen potato products

The top exports to Canada from Panama were:

• Mineral fuels and oils
• Fruits and nuts
• Fish and seafood products
• Spices
• Coffee
• Mineral ores (primarily silver ores and concentrates)

In 2008, Canada exported six times the amount of goods that it imported from Panama.

Panama's incredible economic present and future continue to make it increasingly popular with overseas property buyers and investors. View Panama property for sale