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Don't be surprised ...

Thinking of selling your home? -- well there's always next year.

But wait .. next year may be too late. The new 13% harmonized sales tax comes into effect in Ontario on July 1, 2010, and it will likely hit the whole housing market hard. If you haven't sold by July 1, you may well be out of luck. And if you haven't bought by then, well, maybe you'll want to change your mind. And the funny thing is, hardly anyone seems to realize it.

"There are going to be a lot of very surprised people on July 1," says Jim Flood, director of government relations for the Ontario Real Estate Association. "It's a massive tax increase."

So here's the bad news: Although resale houses will not be taxed, everything to do with the sale will be -- the house inspection, the agent's commission, the moving costs and legal fees.

There will even be tax on the home energy audit all sellers are now compelled to carry out thanks to the Green Energy Act the McGuinty government passed in May. And speaking of the home energy audit, why isn't anyone concerned about that?

Altogether, that means the extra tax on a resale house priced at $369,000 will come in at roughly $2,000 (largely the tax on the agent's commission) and double that and more on many ordinary houses in Toronto, before you even remember you have to pay Toronto's onerous land-transfer tax, too.

It's enough to make you wonder exactly why you're thinking of moving. Or to get you packing your bags and calling the mover today.

But it's worse news for new home buyers, although not as bad as it was originally expected to be. Under pressure from groups like the Ontario Home Builders Association, the province has decided not to levy the tax on the first $400,000 of any new home purchase. (GST has been payable for a number of years but builders tend to hide it in the house price.)

So on a $500,000 house, the extra HST hit will be $6,000 instead of $30,000 (builders get a 2% tax credit that lowers the overall tax hit from 8% to 6%). Without that change, the loss of a potential 21,200 jobs in the GTA alone looked probable. That's enough to scare off first-time home buyers and potentially many other people struggling to make ends meet.

Easy, according to the OREA's Flood: "There's a lot of ignorance. I don't think the average consumer is even aware of the tax." The HST will impact many things you haven't even thought of yet -- but the housing-related taxes are killers.

How new tax adds to cost of a sale:

(Estimates based on house less than $400,000, from Ontario Real Estate Association)

September 29, 2009 in Toronto Real Estate Taxes | Permalink | Comments (4) | TrackBack

Real estate market in recovery mode

With the worst of the recession over, residential real estate markets in major Canadian centres are poised for growth in the final quarter of 2009, according to a report by Re/Max.

The Re/Max Bricks and Mortar Report found the bounce back that began in early Spring has made this recession one of the shortest on record for real estate. Low interest rates, pent-up demand, and improved affordability levels have all played a role in the recovery now well-underway. Percentage increases in sales from January to August 2009 were led by Vancouver, (up a substantial 14 per cent to 23,158), Victoria (up 7.4 per cent to 5,266), Edmonton (up 6.2 per cent to 13,691), Regina (up five per cent to 2,597), Ottawa (up 2.4 per cent to 10,830) and Toronto (up 1.8 per cent to 58,421). Housing values are already ahead of record-breaking 2008 levels in seven of the 11 markets surveyed, including Newfoundland-Labrador (18.1 per cent year to $203,584), Regina (6.4 per cent to $244,088), Halifax-Dartmouth (3.5 per cent to $239,633), Winnipeg (3.5 per cent to $207,006), Ottawa (3.3 per cent to $301,684), and Toronto (up 0.3 per cent to $385,978). Nationally, average price hovers at $312,585, up 0.5 per cent over one year ago.

“Markets are heating up across the country,” says Michael Polzler, Executive Vice President, Re/Max Ontario-Atlantic Canada. “Purchasers are clearly taking advantage of affordable prices and rock bottom interest rates. Those who missed the boat in years past have found that sitting on the sidelines can be a costly move. Prices are on the upswing and inventory levels are tightening, so the push toward homeownership is expected to continue throughout the Fall and possibly into early 2010.”

The recovery of Canada’s resale housing markets speaks to the tremendous value Canadians place on the importance of owning a home. The number of Canadians overall who own a home has increased since 1981 from 62.1 per cent to 68.4 per cent, with some markets posting even higher homeownership rates -- Calgary (74.1), St. John’s (71.5), Regina (70.1), and Edmonton (69.2). Significant gains have also been made over the same period in markets such as Ottawa -- where homeownership levels rose from 51.4 per cent to 66.7 per cent -- and Toronto, where levels rose fro m 57.3 to 67.6 per cent.

“The strength of the residential housing sector cross-country has taken many economists and housing analysts by surprise once again,” says Elton Ash, Regional Executive Vice President, Re/Max of Western Canada. “In terms of its impact on the resale market, by historical standards, this recession was one of the mildest. The resilience of bricks and mortar has been demonstrated time and again. While there may still be some challenges down the road, the worst is definitely behind us in the housing industry.”

Over the past thirty years, the Canadian residential real estate market has experienced three major downturns – 1981, 1989, and 2008. While there have also been regional fluctuations throughout the years, return on investment over this period has been substantial, with Vancouver, Victoria, Toronto, Regina and Ottawa leading the country in terms of price appreciation.

The overall stability of real estate as an investment has also played a role. Markets like Halifax-Dartmouth, Regina, Ottawa, Winnipeg and London have provided steady returns (especially in recent years), with minimal fluctuation.

Public sentiment can best be illustrated by a recent Angus Reid Omnibus Survey that asked the question “In which do you feel more comfortable investing your money? The stock market or real estate.” Out of 1,000 respondents from coast-to-coast, 77 per cent chose real estate. The results of the Re/Max Bricks and Mortar Report are clearly representative of this national dynamic at work.

Source: Re/Max Ontario-Atlantic.

September 24, 2009 | Permalink | Comments (15) | TrackBack

Rogers Launches Real Estate Venture

Zoocasa moves into Dodge City

Canadians love looking at homes online, even when they’re not buying. Nearly a third of all Canadian Internet users browsed real estate listings at least once in July, according to comScore Media Metrix, with the most visits going to Realtor.ca, run by the Canadian Real Estate Association.

But a new player now wants to crack that dominance: Rogers Communications. In late August, the secretive New Ventures division of the cable, wireless and media giant launched Zoocasa, a real estate search site that aims to combine listings, Google Maps and the characteristics of specific neighbourhoods, like school ratings and public transit. “We think there is a lot of value in the contextual data about neighbourhoods,” says Butch Langlois, the site’s general manager. “Is it pre-Starbucks up-and-coming? Is it economical? That’s relevant to homebuyers.”

At the moment, the site is sparse on listings, showing only about half the actual number of homes for sale in any given region. Langlois’s challenge is to get agents, brokers and real estate boards — the same industry professionals that currently feed Realtor.ca with listings — to share that same information with a glitchy startup website showing more promise than performance.

See the full story in Canadian Business magazine »

September 23, 2009 in Toronto Real Estate Trends | Permalink | Comments (1) | TrackBack

Toronto Real Estate Board reports:

GTA Realtors Report Sales and Price Growth in September

In the first two weeks of September, Greater Toronto Realtors reported 3,361 sales – up 23 per cent compared to the first two weeks of September 2008. The average price for these transactions was up eight per cent year-over-year to $393,818.

"An increasing number of positive reports pointing to economic recovery coupled with low interest rates have kept households confident in purchasing a home," said TREB President Tom Lebour.

Year-to-date sales, at 61,676 are up three per cent compared to 59,971 in 2008. Average price, at $386,302, is up by one per cent from $383,776.

"Tighter market conditions since May, as evidenced by rising sales relative to listings and declining average days on the market, have resulted in stronger average price growth," explains Jason Mercer, TREB's Senior Manager of Market Analysis.

September 17, 2009 in Toronto Real Estate Update | Permalink | Comments (2) | TrackBack

Residential Real Estate sales up 18.5%

Low interest rates continue to attract home buyers to the housing market.

Home resales held steady on a monthly basis in August, but increased by 18.5 per cent compared to the same time last year, the Canadian Real Estate Association said today. A total of 42,483 homes traded hands across the country through the MLS listing service. Housing resales in Vancouver increased by 117% over last year's levels.

The annualized gain represents the third consecutive year-over-year gain of more than 15 per cent, and it's the largest year-over-year gain in more than two years.

Sales volumes were up in most major markets across the country, according to data from the Multiple Listing Service, the national residential average price rose 11.3 per cent from year-ago levels to $324,779.

"A rebound in activity at the higher end of the price spectrum in some of Canada's priciest markets is skewing the national average price upward," the agency said. The August price average set records in every province except Alberta.

Listings down

The number of new listings posted the eighth consecutive decline from year-ago levels. New residential listings were down 8.9 per cent year-over-year to 64,167 units, the lowest level for the month of August in five years.

Fewer listings coupled with improved demand is drawing down inventories, the agency said. There were 212,227 homes listed for sale in August, down 13.3 per cent from last year's levels.

That was the fourth consecutive year-over-year decline in active listings, and the largest decline in more than six years.

September 15, 2009 in Canadian Real Estate Market | Permalink | Comments (4) | TrackBack

Home affordability index declines

RBC Survey say homes in Toronto are now more affordable.

Affordability rates remain worse than average in Toronto, where a two-storey home declined 0.7 percentage points to 55.7 per cent of income. That means it takes more than half of pre-tax household income to carry a mortgage, property taxes and utilities. It had improved 8.6 percentage points in the past year and is now close to its historic average of 53.6 per cent.

The price of a standard two-storey home in Toronto fell 2 per cent in the second quarter of 2009 to $509,300, the RBC report says.

See the full story in the Toronto Star »

September 10, 2009 in Toronto Real Estate Trends | Permalink | Comments (32) | TrackBack

Rogers cited for 'scraping' listings

Century 21 sues over links to brokers sites.

A legal battle is brewing between one of the country's largest real estate companies and Rogers Communications Inc., the owner of a new web-site promoting property listings across Canada. The Financial Post has learned Century 21 Canada is suing Zoocasa Inc., which officially launched last month, for "scraping" information from sites provided by Century 21 brokers and representatives. Sources indicate privately controlled Zoocasa is nearly 100% owned by Rogers.

University of Ottawa law professor Michael Geist said while there may be debate about what information you can take from a competitor's real estate site and post on your own, he doubts any court will listen to an argument banning a hyperlink. "There have been any number of attempts to invoke requirements to obtain permission in order to link, but the courts have been reluctant to uphold that. The whole web is dependent on links," Mr. Geist said.

See the full story by Garry Marr in the Financial Post »

September 9, 2009 in Legal Considerations | Permalink | Comments (2) | TrackBack

Toronto home sales rise again

GTA Realtors report August real estate market activity up.

In August 2009, Greater Toronto Realtors reported 8,035 sales, up 27% per cent from August 2008. The average price for August transactions was $387,921 – up by six per cent compared to the same month last year.

"The increase in demand for existing homes has been widespread across different housing types and price ranges," said TREB President Tom Lebour. "This suggests many categories of home buyers have chosen to make a long-term investment in housing, from first-time buyers to move-up buyers or buyers who are seeking a lifestyle change."

Year-to-date sales, at 58,421 were up two per cent compared to the first eight months of 2008. Average price, at $385,978 was up by less than one-half of one per cent.

"We have heard more positive economic news lately. The improved housing market has played a key role,” explained Jason Mercer, TREB's Senior Manager of Market Analysis. "Home sales have helped other sectors of the economy through home buyers’ spending on things like financial and legal services, moving, renovations and home furnishings."

See Toronto Real Estate Market Watch report »

September 3, 2009 in Toronto Real Estate Update | Permalink | Comments (9) | TrackBack

 

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