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A national housing strategy?
The Canadian Real Estate Association is calling on the national Conservative Party caucus to include development of a national housing strategy as part of the federal government’s fall agenda. The caucus meets August 1 st to 3 rd in Charlottetown.
In a letter to Monte Solberg, the Minister of Human Resources and Skills Development, CREA CEO Pierre Beauchamp says without a cohesive national housing strategy, home ownership may no longer be a realistic dream of Canadians. Mr. Solberg is also the Minister responsible for Canada Mortgage and Housing.
“While statistics suggest that Canada enjoys a high rate of ownership, there are some concerning trends emerging behind these numbers that show home ownership is an increasingly difficult goal to obtain by certain segments of the population,” writes Mr. Beauchamp. “Younger Canadians are having difficulty in accessing home ownership. Research by the Vanier Institute of the Family shows that the rate of home ownership for households aged 34 and under fell from 44 per cent in 1981 to 41 per cent in 2001. For those aged 35 to 44, the rate of ownership dropped from 72 per cent to 67 per cent over the same period.”
The CREA letter also notes that home ownership rates are dropping among new Canadians. Research by Michael Haan of the University of Alberta shows that ownership rates among immigrants fell from 62.9 per cent in 1981 to 57.9 per cent in 2001.
The letter to the federal Minister notes that some existing programs, including the Home Buyers’ Plan, operate independently of one another, and there is no way to ensure they can reach their effective potential and address new and existing needs of Canadians.
“What is missing in Canada today is a comprehensive and cohesive national housing strategy – one that covers the entire housing continuum,” Pierre Beauchamp added. “While measures to support and encourage home ownership must be a central component of an effective national strategy, it must also address the needs of those who rent, those who require assisted housing, and the homeless.”
July 31, 2007 in Canadian Real Estate Market | Permalink | Comments (0) | TrackBack
NOW on Land Transfer Tax
Mayor Miller is now saying he underestimated the tenacity of the Toronto Real Estate Board and his opponents on council and that he ought to have communicated more forcefully with pols being lobbied by business groups.
It's a breach that council's free marketers leapt into, knowing full well that most residents lack a basic understanding of how cities work.
"We all say we're against [provincial social service] downloading," said Councillor Michael Thompson who voted for deferral during the debate on Monday, July 16. "Yet we're saying it's okay to download [more taxes] on the citizens of Toronto."
Debunking this should have been a slam dunk. Thompson chose not to mention, of course, that property taxes would have to be raised. Such increases, incidentally, put the greatest burden on those least able to pay: tenants pay more proportionately than homeowners for the services they get, a leftover from the days when they weren't allowed to vote.
And they're still disenfranchised compared to lobbyists for the Toronto Real Estate Board.
The argument that council can't implement new taxes because it "wasn't an election issue" is the height of disingenuous populist BS. I thought selecting people to keep city services running on something more than bubble gum and sarcasm was why we, you know, have elections at all.
See full story in NOW Magazine.
July 29, 2007 in Agency Matters | Permalink | Comments (0) | TrackBack
Real Estate agents turning green
Toronto Real Estate Broker wants energy evaluations
A Toronto Realtor who is setting up a national green real estate association says every Canadian home should have a mandatory energy evaluation before it can be put on the market. "Within five years, we hope to have mandatory energy audits right across Canada on every resale home," says Elden Freeman.
Freeman plans to join forces this fall with James Rogers, a real estate agent in British Columbia, to develop a program to help teach Realtors how to promote green homes and encourage homeowners to make energy-efficient upgrades. "Realtors have a huge opportunity to be very effective communicators," said Rodgers. "They're the ones sitting down at kitchen tables chatting about houses."
Rodgers began his green realty company in the Kootenay region 18 months ago. He offers buyers $500 towards an energy audit or site assessment for solar, wind or micro-hydro system. He also uses such tools as a solar pathfinder to tell clients how much sunlight they'll have for their solar panels or gardens.
He and Freeman believe mandatory energy evaluations -- which assess insulation, appliances, furnaces, air conditioners and exhaust fans, and measure how airtight a home is -- are the way of the future. "
Hundreds of Realtors have taken the first course Freeman set up on energy efficiency, which can earn Ontario real estate agents RECO credits. Participants learned what to look for while examining houses, how to help clients collect rebates for upgrading energy efficiency, find an energy auditor, and determine which changes to make. A new course this fall will examine sustainable design.
Freeman plans to add courses in 2008 on healthy homes and green financing. Real estate agents and brokers are good at "staging" a home to boost its curb appeal, but rarely mention energy-efficient windows, insulation, low-flow showerheads or high-efficiency furnaces, Freeman says.
July 28, 2007 in Canadian Market Forecast | Permalink | Comments (3) | TrackBack
U.S. new home sales plunge
Sales of new homes fell in June by the largest amount in five months as the housing industry continued to struggle with its worst downturn in 16 years. The Commerce Department reported that sales of new single-family homes dropped by 6.6 per cent last month to a seasonally adjusted annual rate of 834,000 units. The decline was more than triple what had been expected and was the largest percentage drop since sales fell by 12.7 per cent in January. Sales are now 22.3% below the level of a year ago.
The median price of a new home sold last month dropped to $237,900 (U.S.), down by 2.2 per cent from a year ago. It was the biggest year-over-year price drop since a 6.5 per cent fall in April. The median price is the point where half the homes sold for more and half for less.
The big drop in new home sales followed a report Wednesday showing that existing home sales dropped by 3.8 per cent in June to a five-year low. The weakness reflects spreading troubles in the mortgage market as more borrowers are defaulting on their loans, dumping those homes back on an already glutted market. In addition, banks and other lenders are tightening standards, making it harder for prospective buyers to qualify for loans.
Economists believe the weakness in housing could linger through the rest of this year until a huge overhang of unsold homes is worked down. For June, the inventory of unsold new homes was unchanged at 537,000 units.
July 27, 2007 in World View [of real estate] | Permalink | Comments (0) | TrackBack
Condo madness in Toronto
Beyond the Sea is beyond the pale
In an effort compared to lining up for a Bruce Springsteen concert, about 150 real estate agents, some with lawn chairs, bottled water, sleeping bags and snacks, camped out overnight for a shot at a new Lake Shore Boulevard condominium that won’t even be built until 2010. The first phase of Beyond the Sea, located just west of Park Lawn Road, sold out in just two days last June; it’s likely phase two’s 279 suites will be snapped up quickly. Both towers won’t be ready for another three years.
In the spirit of Toronto’s seemingly insatiable appetite for real estate, a line-up for Beyond the Sea was already growing at 9:30 a.m. yesterday. It ended shortly after noon today, when the developer started handing out numbers for a first-come, first-served process. Aside from a few words from people guarding against budders, the night went by smoothly.
Each agent, representing clients, was allowed to purchase a maximum of two units. “The only thing that’s missing are wristbands,” said Surinder Chandi, an agent who compared the line-up to getting tickets for the hottest show in town. Margaret Attwood, a Royal LePage agent, enlisted the help of her niece and her boyfriend, 20 and 23 years old. “I paid them $100 each,” she said yesterday, and warned them to expect to stay the night. That expense secured her spot number 73.
This isn’t the first time prospective buyers have camped out for their chance at pre-construction units, but agents say it’s happening with more frequency. “If the location is good, you will see more of this,” predicted Re/Max rep Jolly Deol. “People think Toronto is still undervalued compared to other cities,” he said, like New York, Chicago and Vancouver.
Condos account for about 40% of all housing sales in Toronto. According to a recent report by TD Bank Financial, the city is forecast to see a 4.2% annual appreciation in resale condos. The average condo is expected to cost $249,888 by the end of this year, compared to $239,816 in 2006. Some agents dismissed the Beyond the Sea enthusiasm as “hype,” saying lineups generate lineups.
Sundeep Bahl estimated that about 60% of the buyers will be investors. He was in line today representing two of them. “The actual buyer [who wants to occupy] will never be able to hold off for three years,” he said. “And those are an uncertain three years.”
Beyond the Sea touts itself as “affordable waterfront living.” The showroom, located in an Etobicoke warehouse, has been painted sky blue and has a massive starfish attached to the front. Its floor plans — named Shoreline, Starfish and Coastal — range in size from 481 square feet to nearly 1,200; bachelor suites start at $169,900 and the most expensive penthouse begins at $619,900.
“We are overwhelmed with the response,” said Karen Kessell, vice-president of sales and marketing for Empire Communities, the Beyond the Sea developer. “In the last six months, we have seen other condominium projects in the city experience the same type of enthusiasm by the real estate industry. I guess it just speaks volumes about how the real estate market is doing in the city of Toronto.”
But Empire Communities has also worked for this kind of turnout — two years of planning led up to a three month advertising campaign that featured the catchy Bobby Darin song Beyond the Sea. “It’s meant to create awareness of the project and hopefully get the buzz in the market for people talking about it, phoning, wanting to come in.”
July 27, 2007 in New in New Homes | Permalink | Comments (0) | TrackBack
Home sells for $605,000 over asking
A house on the market for $1.295-million has sold for $605,000 over asking, sparking debate on the role of the bidding war in Toronto. Sitting on a 50-foot wide lot on Munro Park Avenue, a leafy street that peeks out on the lake and is arguably the most desirable in the Beach, the four-bedroom home sold for 47% over asking, almost unheard of in even this city's booming real estate market.
"It was an American Idol feel out there. There were 10 agents on the stairs," says Royal LePage's Mark Butkovich, who along with Al Sinclair represented the buyers, a young childless couple who wish to remain anonymous. "I knew it was going to be highly desirable. I just didn't quite anticipate the end result."
"I figured we might get $1.5 on it, but certainly I didn't see $1.9 coming," said Re/Max's Teresa Elliott, who represented the seller, a middle-aged woman whose family lived in the home for 45 years. Built around the 1930s, the 2,000-square-foot house is in good condition but in need of renovations.
It started showing on July 6, getting about seven visits a day. Five home inspections were soon booked. "It was at that point I knew that it was going to go way over," Ms. Elliott said.
She and her client held off offers for six days, which is common in the city's hot areas. The bidding war ensued on July 12 with 10 offers. The most heated "one-upmanship" was between two parties who bid the same amount, including the young couple who eventually offered nearly $2-million for the home.
In a failed attempt to sway the seller, one agent reportedly even brought in family photos.
"It was very nerve-racking the way it went down," Ms. Elliott said. "There was a lot of pacing because the two offers were competing against one another."
The Munro Park sale illustrates the pressure-cooker tactics being employed in Toronto's hot real estate market. "We've got an insatiable demand for really upper-end homes in the Beach right now. There's very limited supply coming on to the market," said Re/Max's Grant Hilborn, who has sold houses in the area for two decades. "I think it's endemic of a real surge in the market, especially in the last four months. It's been surprising how busy it's been down here. It's busier now than it's ever been."
Everyone agrees supply is not meeting demand in downtown Toronto, a condition that has long sparked bidding wars. Mr. Hilborn had another theory on why would-be homeowners are bidding as much as 30% or 40% over asking: growing gridlock. "I think there's a lot of buyers now that perhaps 15 years ago would have moved out to 905 but just because of the traffic now, I think they're staying closer to the city core for ease of transportation."
But there are other factors at play. The children of Boomers have been taught by urban parents to invest in property early, so they're vehemently anti-rent, Wilfred Veinot said. The Sutton Group salesman sells in Riverdale and neighbouring areas in the east end and actually looked at the Munro Park Avenue property for himself. Mr. Veinot said nine out of 11 of his most recent buyers were expectant parents between the ages of 30 and 35 to whom good school districts and proximity to transit were a must.
Many of them, he said, are getting fed up with competing in bidding wars.
"A lot of buyers out there are very pissed off ... In this market, if your budget is $600,000, you need to be looking at the $500,000 asking houses because with six, there's always someone who can go seven."
Re/Max West Realty's Ted Colomvakos agrees. He has seen fewer bidding wars in his area, Little Italy and the Annex, west of Bathurst, where young clients abound. "People are getting sick of competing. They're sick and tired, especially if somebody's lost three or four houses to competition. They're kind of discouraged, and they get annoyed."
Consequently, some real estate agents cannot satisfy would-be buyers reluctant to rent but unequipped financially to buy downtown. Mr. Veinot has had numerous clients come to him this month resisting the renter's life while refusing to settle for a condo because they have small children. "They have no options but to rent and unless the market dramatically changes, they can't get anything. I think you're going to see more and more of that."
July 26, 2007 in Toronto Real Estate Update | Permalink | Comments (1) | TrackBack
Toronto Board President stepping down
Toronto Real Estate Board President Donald Bentley has announced that he will be stepping down as President of TREB, Effective October 1, 2007 in order to accept a position as Director, Territorial Business Development for RE/MAX Europe.
Donald’s new Position requires him to move to Vienna, which means that President-Elect Maureen O’Neill will serve the remainder of his term as President and also means she will then serve her term as President for the 2008/2009 membership year.
In his new position, Donald Bentley will be working with Territorial Owners throughout Europe to help improve professionalism and productivity among all European RE/MAX agents. RE/MAX Europe operates in 35 Countries which are divided into 55 territories from Iceland to Israel.
July 25, 2007 in Toronto Real Estate Update | Permalink | Comments (2) | TrackBack
Ruling may impact on Tarion warranty
An appeal decision by the Ontario Divisional Court released in April could result in a significant change in the way homeowner claims are treated under the Ontario New Home Warranties Plan Act. Joao Luis DaSilva Cecilio purchased a new home from a builder back in June 2000. After closing, he was unhappy with the quality of the house and made numerous deficiency claims to the Tarion warranty program.
Tarion responded to the complaints in July and October 2005. Cecilio was dissatisfied with their position and appealed to the Licence Appeal Tribunal (LAT) in November that year.
One main complaint was that he heard too much noise from his neighbor's house through the shared wall between their homes. The Tribunal had to decide whether the wall complied with the Ontario Building Code requirements for limiting sound transference.
In January 2006, the Tribunal ordered Tarion to conduct testing to check for any Code infractions and to repair the party wall, if necessary.
Tarion's position was that it had no obligation or authority to do testing after the house was completed and it appealed the LAT decision to a three-judge panel of the Ontario Divisional Court.
At the appeal hearing, Cecilio's lawyer, David J. McGhee, argued that Tarion's position was contrary to the underlying purpose of the legislation, which is intended to protect the homeowner against breaches of the warranty.
Tarion's interpretation, he told the court, "gutted" the protections meant to be in the Act and freed Tarion from its duties under the Act to inspect and test and, if necessary, do work to mitigate the breaches of warranty.
The three-judge panel, in a decision written by Justice Dennis Lane, ruled Cecilio's "submissions make sense out of the Act, whereas the Tarion interpretation does not." Justice Lane wrote, "(Tarion's) warranties only begin when the construction has been completed. It makes no sense that the power of inspection would exist only during construction ... I conclude that (the legislation) authorizes inspections and tests for all purposes of the Act and is not confined to the construction period."
The purpose of the Tarion legislation, the court wrote, "is clearly remedial consumer protection legislation and should be liberally construed...Tarion has taken the side of the builder in opposing the homeowner."
The court ordered the case to be sent back to the Tribunal to consider whether the builder or the homeowner ought to have the test performed by an independent tester and the report distributed to the parties.
Janice Mandel, Tarion's vice-president of corporate affairs, says Tarion won't appeal the Divisional Court decision.
As I see it, the Cecilio case is a watershed decision, which should affect the way many Tarion claims are dealt with in the future. It could also open the floodgates of claims for similar noise complaints.
The decision clearly implies that future Tarion decisions, which do not "make sense" in light of the consumer protection mandate of the program, will be reversed by the courts.
The case also establishes that Tarion's inspection obligations extend beyond the completion of the house, and that post-completion inspection and testing could result in a finding of responsibility by the program. I also read the Cecilio decision as a criticism by the appeal court of Tarion's interpretation of the legislation.
The case could well point the way to a sea change in the way consumers are treated under the ONHWPA legislation - if not by Tarion, then definitely by the courts.
Bob Aaron is a Toronto real estate lawyer whose Title Page column appears in the Toronto Star on Saturdays. He can be reached at bob@aaron.ca. Visit his website at www.aaron.ca.
July 24, 2007 in New in New Homes | Permalink | Comments (0) | TrackBack
New home market up 33% in June
New home sales in the Greater Toronto Area rose by a remarkable 33 per cent in June with high-rise condos capturing a near-record share of total sales, Bob Finnigan, president of the Building Industry and Land Development Association (BILD), revealed this week.
According to RealNet Canada Inc., BILD's official source of new home market information, there were 5,013 new homes and condos sold in June with high-rise unit sales taking a 58 per cent share of the market.
Finnigan noted that low-rise (single-detached, semi-detached and town-home) sales were up 40 per cent with gains in every region, while high-rise (condo suites and lofts) sales were up 28 per cent with declines in the 905 regions offset by a healthy increase in condo sales in the City of Toronto.
"Monthly new home sales have not exceeded the 5,000 unit threshold since 2002 so these results come as a very pleasant surprise," said Finnigan, who added that year to date new home sales are up a healthy 5.4 per cent compared to the first six months of 2006.
Finnigan attributed the market strength to a combination of factors including buyers locking-in in advance of interest rate increases, a spate of high-profile new project launches, particularly by Toronto condo builders, and superb overall value aided by the healthy competitive market which persists among homebuilders in the GTA.
July 22, 2007 in Buying Toronto Real Estate | Permalink | Comments (0) | TrackBack
The Australian way: Auction the house
When Toronto Real Estate Board president-elect Maureen O'Neill pronounced the city's multiple bidding process as transparent as possible, she likely didn't have Australia's approach in mind. In Sydney and Melbourne, an auctioneer stands in front of a home for sale and takes competing bids until the slam of a gavel declares it sold. Imagine that happening in Toronto.
"The bidding war goes on right there on the spot," said Graham Joyce, president of the Australia Real Estate Institute, which represents 85 per cent of the country's real estate agents. "It's certainly very public and you know how much you have to bid to get the property," he said, adding that the vendor sets a reserve price.
Told of Toronto's multiple bidding process – closed offers presented at a set time – Joyce said: "It's certainly not very transparent, is it." He wasn't surprised to hear that Michael Manley, defeated by O'Neill in recent elections for Toronto board president, complained of "phantom offers" – fake bids designed to fuel a bidding war.
Australia guards against "dummy bids" – what Joyce described as the auctioneer "taking a bid off the tree across the road" – by having potential buyers register prior to the auction. They're identified by the paddles they wave to make bids.
He's also convinced public auctions generate the highest sales prices. In Toronto-style bidding wars, "People may not feel comfortable going to their limit because they don't know what others are prepared to pay," he said.
About half of the homes sold in eastern Australia are auctioned publicly. The rest are sold through one-on-one negotiations: A buyer registers an offer, the seller may counter it, and they go back and forth until a deal is struck.
People who purchase homes this way get a "cooling off period" of several days that allows them to change their minds between the initial agreement of purchase and the exchange of title, Joyce said.
A further difference with Toronto is that 95 per cent of buyers don't use real estate agents. And agents by law must compete on the commissions they make. Commissions run between 1 and 3 per cent of sale price, compared with Toronto's unshakable 5 per cent.
"If there's any collusion amongst agents in relation to fee structures they're right on to us," Joyce said, referring to regulatory bodies.
Toronto residents don't need to look as far as Australia to find a different approach to selling homes. While Toronto-style bidding wars are common in Calgary and Vancouver, Montreal residents indicate yet again that they're part of a distinct society.
The average price of a home in Montreal has increased 60 per cent since 2000 – more than in Toronto. Yet real estate agents can't get Toronto-style bidding wars going. Montrealers are extremely reluctant to pay more than a home's asking price, let alone get involved in a blind bidding war.
"It's a cultural thing," said Andre Campeau, co-owner of a RE/MAX branch in Westmount, Montreal's wealthiest community. Montrealers approach real estate like an Arab souk; the asking price is an upper limit that has to be bargained down.
"When we see houses sell above asking, there are so few of them compared to Toronto that we say, `Oh, look at this.' They stand out," Campeau said.
One-on-one negotiations is the widespread method in Montreal. Vendors can negotiate more than one offer at a time, and should consider themselves lucky if they get a chance to do so.
"In Montreal, often, when a buyer hears there's already an offer on a house he will stay away. He'll say, `I don't want to be caught in a bidding war,'" Campeau said.
The Quebec Association of Brokers and Real Estate Agents, which administers the province's real estate act, restricts competition for homes. If a second offer comes in, the vendor can inform the first bidder and give him a chance to increase his bid. If bidder number one does so, the vendor can't tell bidder number two of the increased bid, Campeau said.
The Quebec association insists "you have one kick at the can ... no back and forth, don't fuel a bidding frenzy," Campeau said.
Don't fuel a bidding frenzy? Now there's a radical idea.
July 21, 2007 in Buying Toronto Real Estate | Permalink | Comments (0) | TrackBack
Martha, you just can't buy us
Martha Stewart's neighbour writes song to protest her attempt to trademark Katonah's name
Like many wars before it, the one between Martha Stewart and some of her Westchester County neighbours has inspired a protest song. Written by Katonah resident Marc Black, the song takes aim at Stewart's attempt to trademark the village's name for use on a line of furniture.
That idea has outraged many residents, who say that no one should own the name "Katonah," and some American Indians, who say the name is taken from a beloved 17th-century tribal chief.
"The bottom line is, I'm just hoping, I think we all are, that Martha will hear the song," Black said in a video posted on The Journal News Web site.
"We love you Martha," sings Black in the video, strumming an acoustic guitar as he lounges in a hammock on his porch. "And that's why, I wrote this song. We like you here, you can belong. But you just can't buy us, and simply own."
Diane Paterson, a spokeswoman for the domestic doyenne's company, Martha Stewart Living Omnimedia Inc., said Stewart was requesting trademark protection to "prevent competitors from selling knockoffs."
"In fact, place-names are commonly used by well-known brands, from Philadelphia Cream Cheese to Nantucket Nectars, without any harm to the residents of those towns," Paterson said.
The Village Improvement Society has launched a campaign called "Nobody Owns Katonah" to fight the trademarking of the name.
Katonah is about 40 miles north of midtown Manhattan. The Coldwell Banker Real Estate Corp. said the average house price there was $912,000 in 2006.
July 20, 2007 in Real Estate Personalities | Permalink | Comments (0) | TrackBack
Unexpected first-year costs
One in four first-time buyers caught off guard by early costs.
More than 600,000 Canadians will have a moving day by the end of August this year, and one in four first-time homeowners will be unprepared for the costs and surprises that come with their purchase, according to a recent survey conducted by Ipsos-Reid for First Canadian Title. “Despite the joys associated with owning a home, people are often dismayed at some of the surprise costs they encounter, particularly during their first year of homeownership,” said Susan Leslie, a Vice President with First Canadian Title. “These can range from something as simple as changing the locks to unanticipated closing costs or having to deal with something more serious like a property encroachment issue.”
Unexpected first-year costs can range from small items such as a new garden hose or a lawn mower, to more expensive items and repairs such as window coverings or a leaky foundation.
Despite the number of Canadians on the move, the survey found that as many as 26 per cent of home owners say they were totally or somewhat unprepared for the costs and expenses that come with the first year in their new homes. A much higher number – 43 per cent – rated themselves as very or somewhat unknowledgeable of closing costs such as mortgage loan insurance, legal fees and land registration fees.
The survey found that among Canadians, Quebeckers claim to be the most knowledgeable, with 66 per cent stating they were well aware of up-front closing costs before they made an offer on their first home.
The Ipsos-Reid survey also asked Canadian homeowners about the level of stress they experienced around moving day. The findings revealed that 1 in 5 – or 21 per cent – described the experience of moving as very or quite stressful, and about 65 per cent who described their move as very stressful were either totally or somewhat unprepared for the costs and expenses that come with the first year in their new homes (66%), or were very or somewhat knowledgeable about up-front closing costs before they made an offer on their first home.
Saskatchewanians and Manitobans experienced being very or somewhat stressed around the time of their moves at 29 per cent.
“There are a lot of emotional issues we encounter when moving, from fear of not being prepared to stress about the financial responsibilities that lie ahead. After all, our home is the most valuable purchase most of us will ever make,” said Leslie. “The best solution for stress is doing your homework – from budgeting and planning to ensuring that your property and title are properly protected.”
The Ipsos-Reid Moving Day online survey was conducted for First Canadian from June 18th to 22nd 2007. More than 1,000 adult homeowners were surveyed, and the results are considered accurate to within plus or minus 3.0 percentage points, 19 times out of 20.
July 20, 2007 in Buying Toronto Real Estate | Permalink | Comments (3) | TrackBack
Toronto's Real Estate Market
One Hot Summer!
July has started swiftly, with 3,947 sales to date, Toronto Real Estate Board President Donald Bentley announced today. This mid-month total is up 21 per cent over last July's 3,251 sales. "While it is too early to speak of a July record (currently the record is 8,084 sales recorded in 2003), this month should certainly end as one of our best summer performances," said Mr. Bentley. "And in terms of year-to-date activity (54,457 sales), 2007 is 11 per cent ahead of 2006 (48,961 sales). It is also up 13 per cent over the 2005 figure (47,956 sales), and when 2005 was finished it produced an all time annual sales record."
While transactions continued at an accelerated pace despite the onset of Summer, price increases remained moderate. At $374,254, the average was up eight per cent over the first half of July 2006. The year-to-date average, at $373,572, was up five per cent over 2006's figure of $356,207.
Meanwhile, time-on-market came in at 31 days and the list-to-sale price ratio was 98 per cent.
In Oshawa (E16) sales rose 63 per cent over July 2006 due large to a large increase in the number of semi-detached houses sold.
Sales in Rexdale (W10) increased 97 per cent over last year due to a 133 per cent increase in transactions of detached homes.
North York Center (C14) saw a 57 per cent increase in sales based on large increases in both condo apartment and detached home sales.
Sales in Vaughan (N02) were up 68 per cent, with strong increases in almost all house types.
July 19, 2007 in Toronto Real Estate Update | Permalink | Comments (0) | TrackBack
Trump lops 13 floors off Toronto condo
Developer says slow sales and technical problems are reasons for reducing height of luxury condo to 57 storeys from 70
Donald Trump's Toronto tower is taking just a little off the top. The Trump International Tower – which was to be a 70-storey, five-star, $500-million project at the corner of Bay and Adelaide Sts. – will now be 57 storeys. Gone are 11 residential floors and two from the hotel, though the new plan does call for an increase in the overall number of units.
Rumours have gone on for months that sales are not going well. Trump himself told the Toronto Star's Tony Wong in March it has taken longer to sell out in Toronto than any Trump towers in other cities.
Trump spokesperson Howard Tikka, speaking from Phoenix, Ariz., this week, initially conceded slow sales may have contributed to the whittled-down height. He later added "sales have really done well for us, though initially, of course, we hoped to sell more."
When pressed further, Tikka says the height reduction – and related decrease in the size of many of units – relates to the speed of the building's two elevators and some other technical issues.
"The more residents we had, the more the elevators were going to be used and that wasn't what we wanted in an exclusive building like the Trump," says Tikka, who estimates total pre-construction sales at $275 million with 80 per cent of the hotel-condo suites accounted for.
At 70 storeys, the Trump tower was touted as the tallest residential building in Canada when it was announced in 2001.
July 18, 2007 | Permalink | Comments (0) | TrackBack
Toronto Real Estate Board Release
The Toronto Real Estate Board has released the following:
FOR IMMEDIATE RELEASE
Deferral of Land Transfer Tax Decision is Opportunity for Sober Second Thought: Toronto REALTORS®
TORONTO, July 17, 2007 – Toronto’s REALTORS® are encouraged that City Council has decided not to rush into a decision to double land transfer taxes, but are continuing to tell the Mayor and City Councillors that it is a bad idea that should stop now. “We are glad that City Council is slowing this process down. We hope that City Council will take this opportunity for sober secondthought and realize that this misguided idea should end here,” said Donald Bentley, President of the Toronto Real Estate Board (TREB) Toronto City Council was set to vote on a proposal to impose a municipal land transfer tax on top of the existing provincial land transfer tax, which would have been a 100 per cent increase if approved. After strong opposition from REALTORS® and the public, City Council decided to defer a decision on this proposal.
“REALTORS® have been working hard to protect the interests of both home buyers and owners. We are aware of literally thousands of people who contacted the Mayor and City Councillors through our web site www.NoHomeBuyingTax.com to tell them to shelve this idea,” added Bentley. “By slowing this down, City Council has taken a step in the right direction, but REALTORS® have been clear about a Toronto land transfer tax: not now, not ever.”
A poll conducted by the Environics Research Group, commissioned in part by the Toronto Real Estate Board, showed that 69 per cent of people wanted a decision on these taxes to be put off. The poll also showed that 72 per cent of people don’t believe that new taxes will solve the City’s fiscal challenges and 53 per cent don’t believe that the new taxes will help to improve services. TREB has consistently told the City that a Toronto land transfer tax, on top of the existing provincial land transfer tax, is unfair.
“A second land transfer tax is a very unfair way for Councillors to address the City’s financial challenges. It forces a relatively small group, home buyers, to pay for services for everyone. That, simply, is unfair,” said Bentley.
TREB is calling on the City to pursue creative solutions to its financial challenges instead, including a more fair deal with senior levels of government. TREB has consistently supported City efforts in this regard and plans to continue to do so.
“The Toronto Real Estate Board understands the City’s financial challenges, which is why we have supported the City in its efforts to achieve a more fair deal with senior levels of government. By slowing this process down, City Council can refocus its efforts on that priority, instead of looking to Toronto taxpayers,” added Bentley. “With a provincial election looming, TREB intends to speak loudly and strongly for action in this regard.”
TREB intends to continue opposing the implementation of a second land transfer tax in Toronto.
July 17, 2007 in Toronto Real Estate Update | Permalink | Comments (1) | TrackBack
New tax is vital for Toronto
Intense behind-the-scenes pressure is being applied to city councillors in the run-up to a vote expected tomorrow on imposing two new taxes on Torontonians. Money from these taxes is crucial to the city's future, but the measures face staunch opposition. A proposed land transfer tax would take $300 million from people buying homes or other property in the city. That has generated charges of a "tax grab" at city hall. It's not so simple.
The grim reality is that this city faces a budget shortfall of about $575 million next year. Reserve funds have been drained. And Queen's Park can no longer be relied upon to balance Toronto's books with a timely injection of cash. Without increased revenues, a financial crisis looms.
Simply raising the property tax isn't a good solution. This form of taxation is stagnant, unable to grow with the economy the way sales taxes do. As a result, covering Toronto's projected budget gap would require an indefensible residential property tax hike of about 18 per cent. That is why city councillors should, however reluctantly, support the proposed new taxes. The ugly alternative likely consists of service cuts, layoffs and a stagnating city.
Critics warn the land transfer tax, adding up to 2 per cent to the cost of a residential home, would dampen Toronto's white-hot real estate market. But that seems unlikely. The Toronto Real Estate Board is opposed to the tax, but it recently reported that June's sales volume was the highest ever for that month, with the average property selling for 5 per cent more this year compared to the first six months of 2006. This market seems capable of absorbing a 2 per cent cost increase.
Is the position of the Toronto Real Estate Board real or just self-serving?
July 16, 2007 in Buying Toronto Real Estate | Permalink | Comments (5) | TrackBack
Toronto Real Estate News
The Real Estate News has been around for nearly four decades. Since 1970, buyers and sellers in the Toronto area have been turning to The Real Estate News as a source of information real estate listings. And with the launch of REN.ca - the online version of Real Estate News - real estate professionals, buyers and sellers have a new multi-dimensional promotional medium at their fingertips.
See the Real Estate News online »
July 15, 2007 in Toronto Real Estate Update | Permalink | Comments (0) | TrackBack
Housing starts slide in June
The seasonally adjusted rate of housing starts slipped to 225,500 units in June, down from 235,200 units in May. Canada Mortgage and Housing Corp.'s latest statistics indicate the seasonally adjusted annual rate of urban starts decreased 4.8 per cent to 192,600 in June compared to May.
Urban singles were up 2.1 per cent to 92,200 units in June, while multiples declined 10.4 per cent to 100,400 units.
Urban starts registered an increase of 12.8 per cent in Quebec, 6.8 per cent in the Atlantic, and three per cent in British Columbia, while they fell 5.8 per cent in the Prairies and 19.4 per cent in Ontario.
Ontario's once red-hot housing construction market continued to its gradual decline as the province's seasonally adjusted housing starts fell from 70,000 in May to 56,000 in June, CMHC reported.
In Toronto, it was a similar situation as seasonally adjusted starts fell from 38,000 in May to 28,000 in June.
Rural starts in Canada were estimated at a seasonally adjusted annual rate of 32,900 units in June.
Actual starts, in rural and urban areas combined, were down an estimated 3.8 per cent in the first half of 2007 compared to the same period in 2006. Actual starts in urban areas alone were down an estimated 4.7 per cent.
Royal LePage Real Estate Services is forecasting Canada's national average house price to rise by 9.5 per cent this year to $303,300, passing $300,000 for the first time. After a strong second quarter, robust conditions are expected to prevail through to year's end as all regions are poised to experience a rise in average house prices.
July 15, 2007 in Canadian Real Estate Market | Permalink | Comments (0) | TrackBack
Toronto Commercial Real Estate
June Sees Over 1,000,000 Square Feet Traded
June saw 1,381,107 square feet of space leased through the TorontoMLS system, up 39 per cent over May, Toronto Real Estate Commercial Council Vice Chairman Garry Lander announced today. "This healthy total is the result of several very large (100,000 square foot plus) industrial leases in the Vaughan area. It is a testament to the advances made to the MLS system in recent years that this type of listing is appearing on it more frequently."
Prices fluctuated downward in June, with the average for Industrial space (all size categories) going to $5.63 from $6.14 sfn in May, an eight per cent decline. Meanwhile the average for leased commercial space (all size categories) declined two per cent to $15.41 sfn. Both figures, however, are well with the traditional trading ranges for these types of property when they are leased through TorontoMLS.
Sales Market Highlights
In June, 55 Industrial/Commercial properties sold through the TorontoMLS system, including 33 industrial properties in all size categories, which went for an average of $108.27 per square foot. This compares to a price of $84.13 per square foot derived from non-MLS sources.
See Full Report [in PDF format].
July 12, 2007 in Toronto Real Estate Update | Permalink | Comments (1) | TrackBack
Durham Region Real Estate Update
The Durham Region resale housing market is still breaking records with 1110 sales of single family homes in Durham Region in June reported Lloyd Elliott, President of the Durham Region Association of REALTORS® (formerly the Durham Region Real Estate Board). Even though this is an 8% decrease from 1194 sales in May, these numbers represent the best June performance ever in the history of the Association and also reflect a 16% increase over 955 sales in June of last year. “Regardless of the June numbers,” suggested President Elliott, “significant as these ratios may be in terms of housing market trends and establishing market value, the Durham resale market continues to attract new families (both immigrant and migrant) to the area. Buyers, whether purchasing a new home, or a resale are attracted by affordability, unlimited design features, award winning neighbourhoods, schools, assembly plants as well as economic viability and sustained growth.”
With the average selling price decreasing slightly to $271,394 from $275,695 last month, this is still 2% higher than last June’s average of $265,839. “ Even slight increases in year over year housing prices (comparable to cost of living) is a positive indicator suggesting the market, while exhibiting signs of cooling, remains resilient and indeed continues to move in a favourable direction,” stated President Elliott.
The total number of active listings on the MLS® system is down this month by 8% to 2583 from 2792 in May and shows a further 19% decrease from 3088 homes for sales in June of 2006. “ To date, 2007 has been an interesting year,” mused President Elliott, “ what began as the continuation of a strong buyers market of 2006 has morphed into a balanced market, and now appears to be on the threshold of a new sellers market.”
In the short term, (one year) what can buyers and sellers expect in the housing market? “The short answer is, (replay from most financial journals), mortgage interest rates will rise, perhaps twice by 2008. New home starts will trend slightly downward. And, a new fund-raising wrinkle, open to municipalities may infect the already onerous land transfer tax,” suggested Elliott.
The 1110 homes sold in June represent a $301,247,545 dollar volume, an 18.6% increase over $253,875,895 in June 2006.
July 12, 2007 in Durham Real Estate Update | Permalink | Comments (0) | TrackBack
No real estate slump yet
Average Canadian house price hits $335,180
House prices continued to soar in June, averaging a record $335,180 in sales via multiple listing services operated by real estate boards in 24 major Canadian markets. That figure was up 10.4 per cent from June 2006 according to a report released by the Canadian Real Estate Association (CREA).
MLS transactions tracked in the association's monthly survey account for about 80 per cent of all Canadian resale volume, CREA chief economist Gregory said. Sales surpassed all expectations in the first half of 2007 and seem headed for a full-year record despite higher interest rates and a "gradual erosion of affordability" as prices get beyond people's reach.
In June, average prices reached the highest monthly levels on record in Victoria, Regina, Saskatoon, Winnipeg, Kitchener, Ottawa, Montreal and Halifax, the CREA report said.
The highest average prices were in Greater Vancouver ($564,702), Calgary ($427,205) and Toronto ($381,963), the report said.
July 12, 2007 in Canadian Real Estate Market | Permalink | Comments (2) | TrackBack
Toronto tax will send buyers to 905
A newsletter published by Scotiabank predicts that the proposed Toronto property transfer tax will not have any impact on overall real estate sales in Ontario. The report suggests that rather than discouraging buyers, the proposed tax will send them into regions still within the GTA, or Greater Toronto Area, but outside the city of Toronto.
Toronto’s Realtors have launched a web site (www.nohomebuyingtax.com) to help the public calculate what the proposed Toronto land transfer tax will cost them. The site also has an email feature that easily allows the public to let Toronto Mayor Miller and City councillors know what they think. "As Realtors, it’s our job to give information to the public. As soon as we tell them about the City’s proposal to charge a second land transfer tax they ask us what it will cost them and what they can do to stop this bad idea. Our new web site shows them the exact cost of the tax and allows them to easily email the Mayor and City Councillors," says Donald Bentley, President of the Toronto Real Estate Board.
Toronto Council is scheduled to vote on the new revenue generating proposal at a meeting June 16th. If approved, the new property transfer tax would go into effect on January 1st, 2008.
"Even though this tax will be paid by home buyers, current home owners understand that it could make their properties less marketable compared to homes in other municipalities where there is only one land transfer tax. This could hurt their property’s value, which would impact seniors the most because many of them rely on their property’s value to help with their retirement", the Toronto Real Estate Board President adds.
The Ontario Real state Association issued a Call for Action on June 6, 2007 to 4,500 members of its Realtors Political Action Coalition (RPAC) requesting that they email their MPP to indicate Realtor opposition to the proposed municipal land transfer tax under debate by the City of Toronto. More than 1,000 members responded by sending their provincial MPP the message that they do not want to see a municipal land transfer tax in their communities or the City of Toronto.
Local board presidents have also been writing MPPs within their jurisdictional area to express concern about the potential for municipal land transfer taxes in their communities. At present, only the City of Toronto had the authority to impose a municipal land transfer tax but OREA is concerned that should Toronto proceed with the tax, other municipalities in Ontario will demand similar taxing ability.
July 11, 2007 in Toronto Real Estate Update | Permalink | Comments (0) | TrackBack
Bank of Canada raises interest rate
The Bank of Canada raised its benchmark interest rate for the first time in more than a year and said a "modest" tightening may still be needed to slow inflation. Policy makers pushed the target rate for overnight loans up by a quarter point to 4.5 percent, the highest in six years and 75 basis points less than the American Federal Reserve's target.
Canadian bonds rallied and the country's dollar fell as traders speculated that Governor David Dodge's team won't rush to lift borrowing costs again. Dodge was urged by exporters and unions to delay an increase because of concerns the currency would rise to parity with the U.S. dollar and cost jobs.
Canada's benchmark two-year government bond rallied the most since February 27. The yield fell 8 basis points, or 0.08 percentage point, to 4.62 percent. The price on the 3 ¾ percent security maturing in June 2009 rose 14 cents to C$98.42. Central bankers are "still warning that rates may need to head higher," said Warren Lovely, an economist with CIBC World Markets in Toronto, even while today's statement is "not as hawkish as the bond market feared."
July 10, 2007 in Arranging Mortgage Financing | Permalink | Comments (2) | TrackBack
Real Estate Fraud Brochure released
Canada's four mortgage industry associations have announced the release of a joint Real Estate Fraud brochure. The brochure is designed to increase consumer awareness of real estate fraud issues and will be available on the associations' websites and from individual members.
The brochure describes common types of real estate fraud including fraud-for-shelter and fraud-for-profit through identity theft and document forgery. Consumers are provided with detailed information on the many steps they can take to prevent becoming a victim of mortgage fraud. The brochure also explains what consumers should do if they think they are victims of identity theft or real estate fraud.
In a joint statement, the Chairmen of the Alberta Mortgage Brokers Association, the Canadian Association of Accredited Mortgage Professionals, the Independent Mortgage Brokers Association of Ontario and the Mortgage Brokers Association of B.C. said:
"While real estate fraud is still quite rare, it can have a significant impact on those who are affected by it. This brochure gives consumers the comprehensive information they need to avoid becoming a victim. It also provides helpful tips on who to contact for assistance if consumers think they are victims of real estate fraud."
The document can be found on the following websites:
Alberta Mortgage Brokers Association - www.amba.ca
Canadian Association of Accredited Mortgage Professionals - www.caamp.org
Independent Mortgage Brokers Association of Ontario - www.imba.ca
Mortgage Brokers Association of British Columbia - www.mba.bc.ca
July 10, 2007 in Arranging Mortgage Financing | Permalink | Comments (0) | TrackBack
NoHomeBuyingTax.Com launched
The Toronto Real Estate Board has launched a web site (www.nohomebuyingtax.com) to help the public calculate what the proposed Toronto land transfer tax will cost them and to encourage the public to let Mayor Miller and Toronto councillors know what they think.
"As Realtors, it's our job to give information to the public. As soon as we tell them about Toronto's proposal to charge a second land transfer tax they ask us what it will cost them and what they can do to stop this bad idea. Our new web site shows them the exact cost of the tax and allows them to easily email the Mayor and City Councillors," said Donald Bentley, President of the Toronto Real Estate Board (TREB).
The www.nohomebuyingtax.com site includes an easy-to-use calculator that tells the user exactly how much land transfer tax they now owe the province and what they will owe the City. In addition, it includes quick facts and easy options for the public to take action.
"Nobody likes taxes, but the public has been adamant that a second land transfer tax is not the right approach to addressing Toronro's fiscal challenges because it could make the dream of home ownership more difficult to achieve for home buyers, while impacting property values for some current home owners. Generally, the public believes that this tax is unfair, that the City hasn't justified it, and that the City should first focus on getting its own house in order," Bentley added.
"Even though this tax will be paid by home buyers, current home owners understand that it could make their properties less marketable compared to homes in other municipalities where there is only one land transfer tax. This could hurt their property's value, which would impact seniors the most because many of them rely on their property's value to help with their retirement", said Bentley.
See www.nohomebuyingtax.com »
July 8, 2007 in Toronto Real Estate Update | Permalink | Comments (2) | TrackBack
Toronto estate sells for a $15.78 million
This Forest Hill home with two wine cellars may be the most expensive home in Toronto
In what is believed to be a record selling price for a residential property in Toronto, an opulent Forest Hill mansion has just been purchased for $15.78 million. The 16,000 square foot Dunvegan Road home has eight bedrooms, 13 washrooms and an indoor six-car garage. The sale of the home in one of the city's toniest neighbourhoods demonstrates the strength of the luxury home market in Toronto.
The sale of the property this week comes on the heels of yesterday's Toronto Real Estate Board report that recorded 10,451 sales in June – the best such month ever, and up 20 per cent over June of 2006.
"It has been a good year," said Ilenna Tai, the listing agent who now holds the distinction of selling the most expensive home in Toronto. Tai says the sale is a city record according to Multiple Listing Service records. The listing service, however, does not include private sales, which are not on the public record. Without irony, the agent calls the home a "great bargain" at the price, since a 2004 appraisal came up with a home replacement value of $14 million – without the land.
See details of the property and sale »
July 7, 2007 in Toronto Real Estate Update | Permalink | Comments (3) | TrackBack
Toronto Real Estate Market Watch
The Best June Ever!
Last month the Toronto Real Estate Market recorded 10,451 sales for the best June performance ever, Toronto Real Estate Board President Donald Bentley announced today. "June's figure was up almost 20 per cent over the 8,730 sales recorded during the same month in 2006, and down only slightly (six per cent) from May's best-ever figure of 11,146 sales. To get some idea of the current strength of the market: there have been more sales in the last two months (21,597) than occurred in all of 1977 (20,512), thirty years ago this year."
While the sales pace remained brisk, average prices declined marginally (less than one per cent) from May to $381,963. The year-to-date average was $373,719, up five per cent over the first six months of 2006 ($356,977).
"Price increases remain only modest," noted the President. "Inventory, at 21,789, is robust enough to keep a lid on upward inflation. The current market is still accessible to first-time buyers, and should continue in this mode for the foreseeable future."
Breaking down the total, 3,936 sales were reported in TREB’s 28 West districts and averaged $356,513; 1,819 sales were reported in the 14 Central districts and averaged $513,491; 2,248 sales were reported in the 23 North districts and averaged $406,565; and 2,448 sales were reported in TREB’s 21 East districts and averaged $302,558.
Neighourhood Corner
Etobicoke
In Etobicoke (W-6 to W-10) there have been 2,734 sales to date, up 13 per cent over the January to June period of 2006. The average price was $399,525, up four per cent over the $383,220 recorded during that earlier time frame.
See Full Report [in PDF format]
July 6, 2007 in Toronto Real Estate Update | Permalink | Comments (0) | TrackBack
Martha Stewart sells her house
... at 26% price cut
Martha Stewart has sold her Westport Connecticut estate for $6.7 million -- 26% below the asking price. The four-acre property, known as Turkey Hill, includes a 3,168-square-foot, three-bedroom farmhouse, built in the 19th century, a converted carriage house and a "party barn" that Ms. Stewart used to entertain guests. The property also includes a pool and gardens. Records show that Ms. Stewart and her then-husband, Andy Stewart, bought the property in two parcels in the early 1970s for a combined $80,750.
Ms. Stewart launched her career in the house, starting a catering business out of the basement more than 25 years ago. She put the property on the market last year for just under $9 million. Earlier this year, she offered the main house on two acres for $4.5 million, though she never cut the price on the full estate. The sale was recorded on June 15. Ms. Stewart owns several other properties, including a 153-acre Katonah, New York estate which she said last year she planned to make her full-time home.
The buyer is a limited liability corporation with Charles G. Berg as its principal. Mr. Berg was chief executive of Oxford Health Plans Inc. until the Connecticut-based insurer was acquired by UnitedHealth Group Inc. in 2004. "We're not planning on doing very much to it," he says. Ms. Stewart "spent 35 years making it beautiful." Susan Warburg of William Raveis Real Estate had the listing.
Eric Lindros Lists New York Penthouse
Hockey pro Eric Lindros is asking $6 million for his penthouse in New York's West Village. Records show the former New York Ranger bought the condominium for nearly $2.5 million while it was being built about three years ago.
The unit, which Mr. Lindros decorated in a minimalist style, has three bedrooms, 3.5 baths and a planted rooftop terrace with Hudson River views. It's in One Morton Square, which has a fitness club, valet parking and a concierge. Lee Zimmerman, of Corcoran Group, has the listing.
Mr. Lindros lived in the roughly 2,200-square-foot unit only briefly. In 2005, he rented it out when he moved to Toronto to play for the Maple Leafs and continued to rent it last season when he played for the Dallas Stars, the listing agent says. The athlete sold a three-bedroom townhouse in Dallas last year, but still owns Canadian property in Ontario and Quebec. Mr. Lindros has just become a free agent.
At One Morton, owners include actresses Mary-Kate and Ashley Olsen, who records show paid $7.3 million for four apartments in 2005.
July 6, 2007 in Real Estate Personalities | Permalink | Comments (1) | TrackBack
Canada's housing market forecast
Average house prices set to rise by 9.5 per cent nationally
Canada's resale housing market finished the second quarter on strong and steady footing; surprising many by its astounding momentum. Healthy and robust conditions are expected to prevail through to year's end as all regions are poised to experience a rise in average house prices, with double-digit gains forecast for Edmonton, Calgary, Winnipeg and Regina, according to a report released today by Royal LePage Real Estate Services.
Echoing the growth and activity experienced in all Canadian markets in the first half of the year, the national average house price is forecast to rise by 9.5 per cent, passing the $300,000 mark for the first time, to $303,300. Home sale transactions are projected to rise by 8 per cent to 522,306 unit sales by the end of 2007.
"The momentum from the year's extraordinary start spilled into the second quarter, compounding typically busy spring market activity and stimulating solid price appreciations in almost all regions of the country. These conditions will certainly be an impetus characterizing Canada's real estate market through to year's end," said Phil Soper, president and chief executive officer, Royal LePage Real Estate Services. "As we move into the second half of the year, we continue to expect areas of aggressive price appreciation in the west, and modest, mid-single digit price increases in Central and Atlantic Canada."
Added Soper: "The most profound story in Canadian real estate today is the extraordinary interest that people across our country continue to have in buying and selling homes. The sheer number of homes trading hands this year has far exceeded consensus expectation. This market continues to show strength as we move into the second half of the year."
New to the stage of regional players exhibiting extreme home sales activity and searing house price increases is Saskatchewan. Record numbers of homes sold in both Regina and Saskatoon in the second quarter as intense demand was driven by a swell of in-migration of Saskatchewanians returning from expensive Alberta living. These frenetic conditions are expected to continue, albeit at a slightly more temperate pace.
Energy rich Alberta's potent economy continued to attract in-migration; however, the runaway prices and activity that have characterized Calgary and Edmonton for the past eighteen months have started to ease and will continue to return to more manageable conditions as the year presses onwards. Most notable during the second quarter was the change in Calgary's inventory levels, which increased substantially as some sellers decided to cash in on their home equity. This increased supply, combined with the natural dampening effect that high prices have on demand, is leading to more balanced conditions and a stabilizing of average price appreciations.
Looking ahead, Central Canada should continue to enjoy balanced market conditions. More modest increases can be expected as we move into the traditionally slower second half of the year. The combination of healthy regional economies and job markets, population growth and the recognition that real estate is a sound investment, will continue to attract buyers and bolster demand for housing.
In Toronto, an unseasonable spike in activity may occur in the fall as some buyers react to the city-proposed increase in land transfer taxes for the area, jumping into the market before the proposed taxes are to go into effect.
Anticipated growth of the oil sector in St. John's, Saint John and Fredericton is expected to create an abundance of jobs in Atlantic Canada and maintain the buoyancy of the eastern market, compensating for the significant loss of trades people who have flocked to Alberta.
"During the first half of the year, strong economic fundamentals fuelled consumer confidence and reasonable affordability drove housing demand across the country. In most provinces, inventory levels were up slightly year-over-year, helping to balance the national market," commented Soper.
Of the housing types surveyed, the highest average price appreciation occurred in detached bungalows, which rose by 15.4 per cent to $338,738, followed by standard two-storey properties, which rose to $399,469 (13.2%), and standard condominiums, which increased to $238,784 (15.1%), year-over-year.
Regional Market Summaries
The housing market in Halifax maintained its strength during the second quarter and is expected to remain healthy through the remainder of the year. First-time buyers drove much of the quarter's market activity, with properties priced under $300,000 in greatest demand.
The housing market in Moncton experienced strong sales activity during the second quarter, while a decrease in listings helped push the market in the seller's favour. Affordability remains good in Moncton as the city offers the most affordable real estate in the province. The market is expected to remain strong for the rest of the year with prices increasing slightly and sales activity continuing to flourish.
Saint John's robust economy and high consumer confidence helped fuel real estate activity prompting average price increases during the second quarter. Saint John is gradually becoming the energy hub of the east coast as a new oil refinery has been built and projects, such as the refitting of the nuclear generating plant are slated for the near future.
In Charlottetown, the housing market experienced a strong start to the second quarter and began to moderate towards the quarter's end, resulting in modest average price increases. Contributing to the slight decrease in activity during the quarter was the provincial election, which resulted in a new government. The three year freeze on assessments that the new government is imposing should also help the market conditions.
Activity in St. John's remained stable and average house prices increased during the second quarter, as the city began to experience a shortage in inventory. A strong economy and high consumer confidence were supported by the recent excitement that the long awaited local oil project Hebron Ben Nevis is on again. Affordability is good and there is nothing to indicate anything but a healthy market going forward.
Pressuring prices upwards and maintaining buoyancy in the market, the strong buyer demand in Montreal led the city to experience a stronger than expected second quarter. With inventory levels slightly elevated from this period last year, the market shifted to more balanced conditions from the seller's conditions, which typified the market over the past few years. Westmount remains a popular neighbourhood among young professionals and baby boomers who are drawn to the cache of the established area. Due to various sound fundamental underpinnings, Montreal is poised to enjoy a healthy housing market through to year's end. High consumer confidence, robust demand and a healthy economy will continue to help fuel demand and keep the market moving at a strong pace.
Toronto's resale housing market experienced a strong second quarter, characterized by record-breaking activity and rising average house prices. Toronto's better than expected second quarter was defined by intense demand that was only barely met by inventory levels. Multiple offer situations occurred frequently on detached homes, resulting in decreased average listing periods from this time last year. Looking ahead to the end of the year, the housing market is expected to continue to enjoy strong, yet slightly slower activity, accompanied by modest rates of price appreciation.
Ottawa maintained the title of Canada's most stable housing market due to unwavering demand being met by a comparable level of inventory, resulting in moderate average house appreciations. All purchaser groups were very active during the second quarter, with many first-time homebuyers taking advantage of relatively modest interest rates. Ottawa's housing market is poised to perform as it has been throughout the second quarter: strong and steady, with average house prices rising moderately, while the market remains balanced.
Winnipeg's housing market sizzled through the second quarter, and will continue to do so for the remainder of the year. The recent Manitoba election prompted increased government spending, particularly on infrastructure, which has led to the creation of a strong job market and the rejuvenation of several neighbourhoods, attracting an increase in buyers. The condominium market remains a bright spot in Winnipeg as many first-time buyers and baby boomers flock to the maintenance-free lifestyle this housing type offers. Despite new condominiums coming on stream in 2007, fierce demand will hold a tight grip on inventory levels.
Regina experienced a booming housing market, supported by the city's extraordinary job market and diversified economy. Recent proactive media campaigns in the western provinces promoting Regina as a great place to live attracted many buyers to the city. New to Regina's housing landscape is the rapid growth in the condominium market, which have become the favoured choice of first-time buyers entering the market.
With the same fundamental conditions in tact as in Regina, market activity in Saskatoon was frenetic during the second quarter; with even more significant price appreciations recorded. Very limited supply, coupled with fierce demand, drove prices up in all housing categories, with huge appreciations in the condominium sector. The brisk activity and rising prices have also had a ripple effect into neighbouring areas. The typically slower market in Swift Currant has been invigorated by a spill over of buyers from Saskatoon. Despite the rapid spike in average house prices, market activity began to stabilize at the end of the second quarter and is expected to continue at a slightly more temperate pace, yet still very strong, for the remainder of the year.
In Calgary, sellers cashing in on home equity gains caused housing inventory to rise, which led to more moderate price appreciations compared to the steep appreciations and frenzied activity that occurred last year. Multiple offer situations still occurred during the second quarter, but with less frequency than in the past few months. Listing periods increased slightly over last year with houses remaining on the market 35 per cent longer. While Calgary's market is expected to remain strong and healthy throughout 2007, the city is not expecting to experience the conditions that characterized the market for much of 2006.
Edmonton's housing market enjoyed a robust second quarter with significant double-digit price appreciations. For the majority of the second quarter Edmonton experienced strong demand that outpaced supply, resulting in an abundance of multiple offer situations. The condominium sector experienced tremendous gains during the second quarter as a number of new projects came on stream pressuring prices upwards; most notably, in Riverbend/Terwilliger the price of a standard condominium reported average house price increases of 100 per cent. While house prices are forecast to stabilize during the next two quarters, the housing market is poised to remain healthy and strong for the remainder of the year.
Vancouver experienced a traditionally strong spring market achieving record sales due to a steady increase in demand. The condominium sector experienced busy activity during the second quarter as buyers increasingly favoured the low-maintenance lifestyle that condominiums offer; however, supply could not satisfy demand. Construction of new condominium projects is limited as the city is approaching a build out, and reaching full building capacity within the downtown peninsula, placing a cap on future inventory. Strong consumer confidence, buoyed by economic prosperity in Vancouver is expected to stimulate strong housing market activity for the remainder of the year.
Victoria's housing market experienced a rise in average house prices during the second quarter, due to the combination of a hot job market, high consumer confidence and low inflation. Steady buyer demand was evident in all housing types; however, condominiums received the most notable attention. Although there has been an increase in inventory in the second quarter, multiple offer situations continue to characterize Victoria's market, with listing periods lasting an average of 30 days.
July 5, 2007 in Canadian Market Forecast | Permalink | Comments (1) | TrackBack
Rent increase guideline to be 1.4%
Announced guideline is lowest in history
The rent increase guideline for the year 2008 will be 1.4 per cent, the lowest guideline in the history of rent regulation in Ontario. The 2008 guideline was calculated for the first time under the new Residential Tenancies Act, and is based upon the Ontario Consumer Price Index.
"Our goal is to protect tenants from receiving a rent increase well above the rate of inflation," said Minister of Municipal Affairs and Housing John Gerretsen. "By linking the rent increase guideline to the Ontario Consumer Price Index, we've ensured that landlords can recover the increase in their costs, while tenants can still pay their rent."
The rent increase guideline is the maximum amount by which a landlord can increase the rent of a tenant without seeking the approval of the Landlord and Tenant Board. Most tenants in Ontario receive an annual rent increase that is at or below the amount of the guideline.
The first rent increase guideline was announced in 1975. Guidelines have been calculated each year since, ranging between 1.5 per cent and 8 per cent. The new Residential Tenancies Act took effect on January 31, 2007, creating a new system of rent regulation that includes linking the annual rent increase guideline to the Ontario Consumer Price Index, a measure of inflation calculated by Statistics Canada.
The 2008 guideline applies to a rent increase that occurs between January 1 and December 31, 2008.
July 3, 2007 in Real Estate Practices | Permalink | Comments (0) | TrackBack
Small has its advantages
The dream home, for most people, is big - or at least bigger than the one they're in now. But Andy Thompson, a 36-year-old Toronto architect, doesn't think about houses the way most people do. He likes small - really small. The home he designed for himself, his wife and two kids is only 270 square feet, or 350 square feet if you count the loft. This is small by choice, his contribution to a growing movement that counters the aesthetic of big, which is dominating the suburbs and the average person's dreams.
It's cool to be small. In the United States, the Small House Society is championing the value of simple and sustainable housing. In Europe, a German professor has created a high-gloss micro-compact home, only 76 square feet. On the Web, the Smallest Coolest Apartment Contest has just handed out prizes to winners for the third year running.
For some, it's a question of money, especially in Toronto, where a 360-square-foot studio on the waterfront could set you back more than $140,000. For Mr. Thompson, it's also a lifestyle choice. Living small means you can be in a prime location without facing the drudgery of a commute or a big house to clean. It frees up time and money to go out for dinner and socialize, instead of staying home in front of the television.
July 3, 2007 in New in New Homes | Permalink | Comments (1) | TrackBack
Toronto's land transfer tax debate
Toronto Realtors say city's land transfer will be unfair
The Toronto Real Estate Board (TREB) has told the City of Toronto that its proposal to charge a second land transfer tax treats home buyers unfairly. TREB’s comments were made in a formal presentation to the City’s Executive Committee last week. If the City moves forward with the proposal, the average Toronto home buyer will pay another $4,200 in land transfer tax. That is a 100 per cent increase, and would give Toronto the highest land transfer taxes in Canada and the second highest in North America.
“A second land transfer tax discriminates against home buyers. The City doesn’t provide any land transfer related services, so this tax is just a way of forcing home buyers to pay for services for everyone. That, simply, is unfair,” said Dorothy Mason, President of the Toronto Real Estate Board.
The Toronto Board also pointed out that the proposed second land transfer tax is most unfair to those who can least afford it – people who have small down payments and, therefore, can only qualify for a mortgage by also paying for mortgage insurance.
“Many home buyers will have no choice but to take money from their down payment to pay this tax, which would mean extra mortgage interest and higher mortgage insurance premiums. For the most vulnerable, this means that the second land transfer tax will actually cost over $15,000. The City will literally be forcing people to take out a mortgage to pay a tax. That is unfair,” Mason said.
TREB also noted that Toronto residents and businesses can’t even expect that the new money the City collects from this tax will result in any improved services.
“The Mayor and City staff have admitted that the money Toronto takes from home buyers will be used to fill the holes in the City’s current budget, not to expand or improve services. It’s not fair that home buyers will be paying more for the same service”, Mason said.
“A second land transfer tax will make the dream of home ownership more difficult to achieve. Toronto’s REALTORS® are protecting the interests of home buyers by strongly opposing the City’s proposal. "We plan to keep up the fight," said Mason.
July 2, 2007 in Toronto Real Estate Taxes | Permalink | Comments (1) | TrackBack
New features launched on mls.ca
A number of enhancements have been made on the mls.ca web site. The mls.ca web site features online residential property ads and is operated by The Canadian Real Estate Association(CREA) on behalf of more than 90,000 Realtor® across Canada. More than three million unique visitors visit the mls.ca web site each month. “mls.ca is one of Canada’s most popular web sites, and is the place Canadian consumers most frequently turn to when they are looking for information about residential property” said CREA President Ann Bosley.
“The new mls.ca includes a number of innovative tools and resources for consumers, including enhanced search functionality and open house information” said Bosley. New targeted search tabs allow consumers to search for residential, recreational, vacant land, and agricultural properties. These search tabs replace the “advanced search” feature. A new search tab for open houses has also been added to mls.ca, giving consumers the ability to search for open houses in their area of interest. A number of useful online calculators have been added to mls.ca for consumers. These include an affordability calculator, land transfer tax calculator, and rent vs. own calculator. The site has also featured a mortgage calculator since it was launched in 1996.
The property ad listing pages have also been redesigned, providing consumers with a more compact and streamlined display. Agents will also have the flexibility to upload more photos to the property web pages.
An online survey of more than 10,000 visitors to the mls.ca web site conducted by CREA in June 2007 indicated that just over 25 per cent have never bought or sold property. Another 22 per cent of visitors to the web site said they had bought or sold more than one property in the past five years. An earlier survey conducted by CREA in September 2006, shows the majority of consumers using the popular site visit mls.ca a few times a week.
About mls.ca
The mls.ca web site was launched in 1996 and has grown to become one of the most popular Internet research tools for residential real estate in Canada. The web site is an advertising vehicle that helps Realtors market their clients’ properties to a worldwide market. An average of three million unique visitors visit the mls.ca web site each month. The mls.ca web site is not an MLS system, and does not display all of the listing information associated with a property in the local real estate Board’s database.
July 1, 2007 in Canadian Real Estate Market | Permalink | Comments (1) | TrackBack
O Canada!
On this 140th anniversary of confederation, we can't help noting that direct translation of the French version of our national anthem is far more historically evocative than is the wording in English.
O Canada! Land of our forefathers
Thy brow is wreathed with a glorious garland of flowers.
As in thy arm ready to wield the sword,
So also is it ready to carry the cross.
Thy history is an epic of the most brilliant exploits.
No sword or cross in the English.
Happy Canada Day!
July 1, 2007 in Location, location, location | Permalink | Comments (1) | TrackBack
