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September 23, 2016 in Buying Toronto Real Estate, Canadian Real Estate Market, For Sale By Owner, Location, location, location, New in New Homes, Pay what you want listings, Real Estate Investments, Save on Comission Fees, Selling Toronto Real Estate, Sold Watch, Toronto MLS Listings, Toronto MLS Sales, Toronto Neighbourhoods, Toronto Real Estate Trends, Toronto Real Estate Update, What's next (in real estate) | Permalink
Ontario housing starts up 29%
Ontario housing starts grew for the third consecutive month in February. Ontario’s seasonally adjusted and annualized home starts hit 62,000 units, up from 48,400 in January, or a 29 per cent increase.Multi family construction, which includes condos, row houses and town homes, was the biggest driver. But single detached housing also edged higher, posting better than expected activity.
“Ontario new home starts activity has exhibited a seesaw pattern in recent months suggesting the downtrend in activity since the spring of 2011 is levelling out,” said Ted Tsiakopoulos, CMHC’s regional economist. “Buoyant resale and new home market conditions since the final months of 2010, an improving economy coupled with the fear of rising rates later this year implies housing starts should move convincingly higher by the second half.”
The Toronto market was largely responsible for the big increase in Ontario.
“The condominium segment is shaping up to be the engine of growth for the construction industry in Toronto this year,” said Shaun Hildebrand, CMHC’s senior market analyst.
The strong housing start numbers come on the heels of disappointing building permit figures for January, which showed construction intentions were down by 19.5 per cent over December. Much of that was due to the volatile multiple unit segment, where large projects can have a disproportionate impact.
Those figures are expected to pick up later this year, given the volume of sales for multi-unit dwellings in the fourth quarter of 2010.
Nationally, Ontario led the way, helping starts rise by a better than expected 6.6 per cent to 181,900 units.
“Canadian residential construction activity appears to be stabilizing at a level consistent with underlying demographic demand,” said BMO Capital Markets economist Robert Kavcic. “Home sales could be challenged by higher mortgage rates and shorter amortizations which will eventually weigh on starts, but the maturing economic recovery should help.”
According to a survey of builders by the Ontario Construction Secretariat, firms in the Greater Toronto Area are the most optimistic about increased work and employment this year.
However, the optimism is not shared across the province as some hard hit cities, including southwestern Ontario’s Windsor and Sarnia area are worried about job loss ranging from auto to petrochemical industries.
“There are still some concerns about how much growth will actually occur,” said Sean Strickland, CEO of the secretariat.
A majority of builders or 55 per cent say that they expect the economy to be “somewhat good” this year, as home buying is expected to be more muted. Analysts seem to agree.
“As mortgage rates climb, home buyers are likely to jump into the market sooner rather than later to take advantage of relatively lower borrowing costs,” said Arlene Kish, principal economist at IHS Global Insight. “Overall, residential construction looks like to be plodding along, but it is not expected to make a significant contribution to growth in 2011.”
Housing starts plunge in October
Canadian housing starts fell 9.2% to an annualized pace of 167,900 units in October, marking the fifth monthly decline in the six months since reaching an almost two-year high in April (at 205,600 annualized units). Market expectations were for a much smaller 2.4% decrease in the level of starts to 182,000 annualized units. With the most recent reading in September of 210,100, expectations had been buoyed by permits remaining high. The sharp monthly drop in starts follows September’s revised 3.1% decline to 185,000 (previously reported as 186,400) and represents the slowest pace of housing starts since September 2009.
The weakness in total housing starts was the result of sharp declines in both major components, with the typically volatile urban-multiples component falling 11.2% and the fairly stable single-urban starts down 8.0% from the previous month. Providing some offset was an estimated 12.3% rise in the rural-housing starts.
Toronto New Home Satisfaction Survey
Consumer satisfaction for new home builders up in 2010
The recession that gripped the Canadian home building industry last year may have hurt builders, but it also had some positive effects for consumers. Not only did prices go down, but fewer sales meant that developers had more time to spend with customers, according to a survey made public Wednesday by consumer research firm J.D. Power.
“With fewer closings, builders could devote more time to customers,” said Adrian Chung, senior manager at J.D. Power.
“While the recession caused many builders to reorganize and even lay off staff, it meant that they could also concentrate on the product.”
In the 2010 survey of Greater Toronto Area home builders, 20 per cent of buyers said they received a defect-free home. Last year only 8 per cent of buyers said their home had no problems.
“That’s a big improvement,” said Chung. “The slowdown likely meant that builders had time to play catch-up.”
The first six months of last year was one of the worst on record for GTA developers as sales plummeted along with consumer confidence during the global financial meltdown.
The lack of sales meant that the percentage of buyers offered discounts almost doubled in 2009.
About 17 per cent of all buyers of new homes in the GTA received a discount, compared with 9 per cent a year earlier, according to the study.
“This is a clear sign of the impact of the recession and the resulting action that some builders were forced to take to salvage new home sales,” said Chung. “Builders traditionally try and hold pricing, but discounting was a sign of the times.”
Chung said it will be interesting to see if builders can maintain their higher satisfaction scores for the next survey. Sales have picked up dramatically in the first six months of this year and builders have had to ramp up staffing.
The builder with the highest overall satisfaction score in the GTA was Tribute Communities. The developer of low- and high-rise homes is expected to build about 1,000 homes in the GTA this year, including projects such as 1717 Avenue Rd.
The company also won the Ontario Board of Trade’s Business Achievement Award this week, the first time the award has been made to a home builder. Tribute shares the award with De Beers, the global diamond company.
In second place was Mattamy Homes, followed by Monarch Homes in third place.
J.D. Power, known for their market research in the automotive industry has been conducting their customer satisfaction surveys in Toronto since 2005.
Chung, an analyst formerly with the automotive group, said the firm decided to look at housing because, not unlike cars, it is one of the largest purchases a consumer will make. “They are both big ticket items that consumers do a lot of research on.”
But while satisfaction in the car industry has improved dramatically, with not much separating the top five from the bottom five, there tend to be more variances in the housing industry, said Chung.
“There is more complexity in a home. And you can find more issues in a home as you live in it over time,” said Chung.
Among the nine builders that had 150 or more closings in 2009, the Conservatory Group finished last in the survey. In second to last place was Fieldgate Homes.
“What it boiled down to was that they simply didn’t perform as well as the top guys,” said Chung. “This related to things that mattered to the consumer such as home readiness and customer service.”
Because there are so many people involved in a sales transaction, it is tough for the customer to have a sense of continuity in the home buying process, said J.D. Power.
One move appreciated by customers, says Chung, is the simple follow-up call.
“Following up with a customer after move in seems like such a simple gesture, but ultimately it reflects the conviction of the builder to deliver on the promises made to the customer,” he said.
Source: Toronto Star
New home price rise slows
The cost of a new home rose 0.1% in February, a slower pace than the previous month, Statistics Canada said today. Economists had expected the federal agency’s price index would increase 0.4% during the month, the same pace as in January.
The price increases were led by Regina, up 2% from the previous month, and Winnipeg and London, Ont., both up 1.9%, the agency said.
The only metropolitan areas to record declines were Toronto and Oshawa, both down 0.7%, and Charlottetown, which declined 0.5%.
On a yearly basis, new house prices rose 0.9% in February, following a 0.1% annual increase in January. “This was the second consecutive year-over-year increase recorded since December 2008,” Statistics Canada said.
The Benefits of Building Green
As consumers continue to learn more and more about green building, architects, designers and builders are starting to incorporate more green features into their new homes. As technology and products continue to emerge, consumers can build their dream home without sacrificing aesthetics.
Even though everyone in the home building industry is buzzing about the term 'green' building, many consumers are still confused as to exactly what it means to build a green home. building a green home is good for your family's health, your budget and the environment. Here are some of the benefits to building green -- a healthier home, cost-efficient home and environmentally friendly home.
A Healthier Home
- Green homes' use of toxin-free building materials helps combat indoor air pollution, which can be much worse than outdoor pollution. Unhealthy air inside can pose serious health risks for residents, including cancer and respiratory ailments like asthma. Such non-toxic materials include wheat-derived strawboard, natural linoleum made from jute and linseed oil, paints with little or no volatile organic compounds and toxin-free insulation made from soybeans, recycled paper or even old denim.
- Green homes have far fewer problems with mold or mildew.
- Natural ventilation in green homes, as well as use of mechanical ventilation systems to filter and bring fresh air inside and vent stale air outside, keep residents breathing easy.
A Cost-Efficient Home
- The net cost of owning a green home is comparable to -- or even cheaper than -- owning a standard home. If upfront costs are higher, it is often because many architects, homebuilders, engineers, plumbers and other industry professionals just don't have the knowledge and experience to cost-effectively plan, design and build a green home. Finding a professional familiar with green-building techniques will save you money and ensure you're getting the best-quality work possible.
- Month to month, people who live in green homes save money by consuming 40% less energy and 50% less water than standard homes. Over the years, that adds up to big savings.
- A green home is more durable than most standard homes because of its high-quality building materials and construction processes, requiring fewer repairs.
- The value of a green home is typically higher than that of a comparable standard home, and the market demand for green homes continues to rise.
- Local, state and federal governments are increasingly offering tax breaks and other incentives for building LEED homes or adding green features to your home.
An Environmentally Friendly Home
- Residential cooling and heating alone make up 20% of the United States ' yearly energy use. Throw in household lighting, appliances and other electronic equipment, and homes are clearly a major source of energy consumption. Green homes use 40% less energy than comparable standard homes.
- Some green homes further reduce our dependence on conventional energy sources as they generate some or all of their energy needs through alternative energy sources like the sun, wind, geothermal energy and biomass.
- Efficient plumbing and bathing fixtures, drought-tolerant landscaping and water-conserving irrigation systems help green homes use, on average, 50% less water than standard homes.
- Far fewer natural resources are used in the construction of a green home. Many green building materials have significant recycled content. Some companies, for example, now make carpets and floor tiles from recycled tires and bottles. Green homes can also be constructed with salvaged materials from demolished buildings. Green homes use materials made from rapidly renewable materials, like bamboo, hemp, agrifibersand soybean-based products. And the use of wood that is certified by the Forest Stewardship Council helps promote socially and environmentally beneficial forestry practices.
- Building a standard 2,500-square-foot home creates approximately 2 tons of construction waste that ends up in landfills. Construction of a green home, however, generates 50% to 90% less waste.
Source: Green Building Council.
New condominium projects launched
Toronto's high-rise condo market is on track with 2007
Urbanation — www.urbanation.ca — released its Toronto condominium market numbers for the First Quarter of 2008. Editor Jane Renwick states, "With 17 new condominium projects already launched in Q2/08, Urbanation's Q1/08 Survey shows divergence between low rise and high rise real estate markets, with the high rise condominium market retaining strength in pricing and volume of units sold.
Among the most significant data and trends in the Toronto market in Q1/08:
- New condominium sales in Q1/08 numbered 3,433; only 8 units fewer than Q1/07.
- 277 new condominium projects were tracked in Q1/08; 56 more than in Q1/07. This means that the 3,433 Q1/08 sales were spread over 25 per cent more buildings than Q1/07. Aura at College Park represented 21 per cent of Q1/08's new sales.
- Resales of condominiums in Toronto were down slightly in Q1/08 compared to Q1/07 by 187 units, or 6 per cent.
- The average new condominium index price for the Toronto CMA in Q1/08, as defined by price per square foot (psf), enjoyed its 13th consecutive quarterly increase, up 11.4 per cent in Q1/08 from Q1/07, ($388 psf vs. $348 psf). Resale unit pricing was up 8.3 per cent from Q1/07.
- An expected rise in unit completions should enable an increase in new unit construction starts in 2008. An indication of this is that construction began on 4,546 new condo units in the Toronto CMA in Q1/08, setting the second highest level of new starts for the First Quarter since Q1/89, and 233 per cent higher than Q1/07's new start total.
- The hottest area for new condominium construction and sales continues to be the former City of Toronto, representing 50% of the CMA's condominium development activity.
"The Q2/08 projects that have already launched range from Tridel's Huntington and Cresford's The Stratford Residences priced over $800 per square foot, to Elm Developments' The Portrait selling at an average of $367 psf, to Pointe of View's Ravines of Spring Pointe priced under $300 psf. The market is broad and still very buoyant; however, we are expecting it to return to more normal levels in 2008, as 2007 outperformed 2005 and 2006 by 40 per cent," said Renwick.
"The Toronto condominium market showed continued strength in Q1/08, with the Toronto construction industry operating at or beyond full capacity. Continued immigration, the desire to live downtown or near transit hubs and the relative affordability for a large numbers of buyers, are so far countering any external factors, keeping the new condominium market healthy into 2008," she added.
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.”
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 firstname.lastname@example.org. Visit his website at www.aaron.ca.
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.