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New listings surpass 80,000

Homes listed for sale across Canada set all-time record in July

The number of new listings of existing houses for sale surpassed 80,000 for the first time ever in July and sales activity fell, making the market more favourable for buyers and less so for sellers, the Canadian Real Estate Association said today.

The nationwide Multiple Listing Service residential listings set a new record in July, coming in at 80,147 units, up 1.4 per cent from June and up by half a per cent over the previous record set in May, said CREA.

This is the first time in any month that new listings surpassed 80,000 units, the association said, adding that listings are up across the country as people rush to take advantage of high home prices.

"We're facing a far more balanced market than we did last year," said Gregory Klump, CREA's chief economist, in an interview.

"There's a lot more product from which to chose," he said. "Buyers can afford to be in less of a hurry."

Across Canada, said Klump, "people are putting their homes on the market to take advantage of recent price gains."

What Canadians are seeing, said Michael Gregory, an economist with BMO Capital Markets, is "a healthy correction."

"When you have double digit price gains on a nationwide basis for several years, you're going to have to pay a little bit of that back at some stage," he said.

New listings reached new heights in Ontario and Quebec.

In Manitoba, they climbed to their second-highest level since the beginning of the new millennium.

In fact, the rise in listings nationally more than offset a monthly decline in the number of new listings in Alberta, where levels have been retreating from a peak reached in March, said CREA.

Earlier this month, CREA reported that listings in the country's major markets remained near record levels in July. On a seasonally adjusted basis, 50,782 properties were listed through the MLS systems - the second-highest level on record, just 0.2 per cent below the peak reached in May.

"The trend for new listings generally (national and major market) reflects recent price trends," said Klump.

"While still elevated, new listings in Alberta are easing and market balance is stabilizing now that prices there have softened," he said.

Affordability has been eroded by recent price gains, he said, "That's one of the reasons you have fewer buyers this year, just from an affordability standpoint."

Some people are listing their homes for sale, said Gregory, in part because they figure "that prices have gotten toppish."

Then, he said, there are those who have made investments. They are probably "looking to move out of real estate at the tailend of a very healthy ride."

A big chunk of the new listings are "investors and speculators."

The housing dynamic has changed quite considerably in Canada over the last few months, said Gregory. "It looks like that is going to continue."

Seasonally adjusted national sales activity in July was stable compared to June. The average price of a home based on the national MLS figures slipped by 2.4 per cent year-over-year in July.

That compared to an average price decline of 3.6 per cent in major markets reported by CREA in early August.

At the end of July, the average price of a resale home was $302,298, down from $309,885 in July 2007, the national MLS figures released Friday showed.

CREA's figures indicate that in July almost 43,000 sales were sold, down from 48,748 in July last year.

Going forward, said Klump, "we expect that new listings will remain elevated for the rest of the year."

As a result, he said, "the significant price gains that we saw last year are definitely in the rear-view mirror. They'll be very modest over the rest of the year and into next."

He also said that with the country's economic fundamentals remaining strong, CREA doesn't see any collapse in the housing market in the offing

On Friday, Statistics Canada reported that the economy rebounded in the second quarter after losing ground in the first quarter.

Gross domestic product increased at an annual rate of 0.3 per cent in the three months ended June 30, after it contracted by 0.8 per cent in the first quarter.

Technically that means Canada has technically avoided a recession, which is defined as two consecutive quarters of declining economic output.

"With the economy still fundamentally on sound ground, we don't expect to see the massive layoffs that we saw in the recession of the early 1990s," said Klump.

"With employment remaining elevated, the fundamentals are still sound for the housing market," he said. "We don't expect the Canadian market have similar trends to those in the U.S."

Statistics Canada recently reported that the national unemployment rate improved slightly to 6.1 per cent in July, from 6.2 per cent in June, but only because many people - especially the young - left the workforce.

The U.S. housing market has experienced a severe downturn for more than a year after several years of rapid growth. Many industry observers say Canada will avoid a U.S-style boom-and-bust cycle but that demand will nevertheless slow.

As for prices going forward, said Gregory, "houses on the market are staying on longer."

Many dwellings "put up at the heights of the boom, they aren't moving."

August 29, 2008 in Canadian Real Estate Market | Permalink | Comments (4) | TrackBack

Who says you own your house?

Teranet does!

Teranet is an 'Income Trust' that operates the electronic Land Registry system in Ontario, by authority of the Provincial Government and holds a monopoly on recording real estate transactions in Ontario that lasts through 2017. Teranet takes a share of the fee every time a house changes hands in the province. Last year, the trust took in $254-million of these fees.

According to an article in today's Globe and Mail, Teranet is a candidate to be bought-out by private equity funds »

August 28, 2008 in Legal Considerations | Permalink | Comments (0) | TrackBack

Downturn in commercial real estate

Investment in Canadian commercial real estate declined sharply in the first half of 2008 and investment for the year as a whole is expected to be considerably lower than last year's record level, says a mid-2008 report on the investment market by CB Richard Ellis Limited. The report says that in the first six months of this year investment in the Canadian commercial real estate market totaled $10 billion, 24 per cent lower than the $13.1 billion invested in the first half of last year.

See report »

August 28, 2008 in Toronto Real Estate Update | Permalink | Comments (3) | TrackBack

What makes a house sell?

A successful sale requires that you concentrate on six considerations: your asking price, your terms of sale, the condition of your house, its location, its accessibility, and the extent of marketing exposure your house receives. While some of these factors are beyond your control, you can compensate by taking advantage of others (like a new paint job) to make your property as attractive to prospective buyers as possible.

When is the best time to list a house for sale?

The "best" time to list your house is actually as soon as you decide to sell it. If you want to get the best price for your house, the key is to give yourself as much time as possible to sell it. More time means more potential buyers will probably see the house. This should result in more offers; it also gives you time to consider more options if the market is slow or initial interest is low.

Is there any seasonality to the market?

Peak selling seasons vary in different areas, and weather has a lot to do with it. Late spring and early fall are the prime listing seasons in the Toronto area because houses tend to "show" better in those months than they do in the heat of summer or the cold of winter. And of course, people like to do their house shopping when the weather is pleasant.

But keep in mind that there are also more houses on the market during the prime seasons, so you'll have more competition. So while there is seasonality in the real estate market, it's not something that should dominate your decision on when to sell.

What about market conditions — price trends, interest rates, and the economy in general? Should they have any bearing on when I list? Probably not. Even if you're under no pressure to sell, waiting for better market conditions is not likely to increase your profit potential.

So how long should it take to sell?

Average selling times vary from 10 to 90 days, according to market conditions in a particular region or even neighbourhood, But if it hasn't sold within 30 days of being placed on the market at least one of the six considerations: price, terms, condition, location, accessibility or market exposure must be made more attractive to prospective buyers. Selling in any market is easier if you keep time on your side.

What if I can't sell my old house before I have to move?

This situation can arise for any number of reasons. For instance, getting the job promotion you've been waiting for may mean having to relocate very quickly. Another example: you finally find your "dream home," and need to get it under agreement before it sells to another buyer. Whatever the reason, don't panic. You have some viable alternatives to the worrisome possibility of double mortgage payments.

If you don't have to sell in order to buy a new home, consider the advantages and disadvantages of renting your current house. If you're being transferred before you've had a chance to decide on the new house, you may be able to obtain a short-term rental of your own while you're becoming familiar with the new area. Either way, a local real estate professional can usually help, by advising you how much you can expect to pay for rent in your new city, or what you need to charge for your current home to both cover your mortgage payments and take care of other costs you'll entail as a landlord.

Another solution available from some brokers is the guaranteed sale plan which is essentially a written promise to buy your house at a pre-determined price if it doesn't sell by a certain date. The amount of the guaranteed price varies considerably between brokers. It is prudent to have any sale guarantees reviewed by you lawyer prior to signing-on.

August 26, 2008 in Selling Toronto Real Estate | Permalink | Comments (4) | TrackBack

U.S. home sales rise in July

The trade association for real estate agents in the United States says sales of existing homes rose 3.1 per cent in July as buyers snapped up deeply discounted properties in parts of the country hit hardest by the housing bust.

The National Association of Realtors reported sales rose to a seasonally adjusted annual rate of five million units.

Still, home sales were 13.2 per cent lower than a year ago.

The median price for a home sold in July dropped to $212,000 US, down by 7.1 per cent from a year ago.

August 25, 2008 in World View [of real estate] | Permalink | Comments (3) | TrackBack

Smaller condos making a mark

Boutique builders offer unique features and detailing

Ask most people what they see when they think of a condominium and they'll describe a soaring steel and glass tower rising into the sky above a vibrant city. But Roland Rom Colthoff and Richard Witt of Toronto's Raw Design have a different vision. Theirs is of smaller structures, perhaps with similar glass and steel features and plenty of luxury touches. But instead of overlooking neighbourhoods, their buildings fit in as the next logical step in a city's growth.

Not that they've eschewed the classic tower – both agree there will always be a place for it. Indeed, they've put forward several proposals in that form, most notably being shortlisted in an international competition for the Absolute in Mississauga, which featured a 60-storey "tube" with sky-gardens.

However, as Colthoff says, Toronto is on the first stuttering steps of a remake that will doubtlessly echo what has happened in New York, Chicago, San Francisco, Paris and many other cities around the world – and there's enough room for more than one style of design. Despite the apparent glut of condos on the market or being built, the demand is still strong and Toronto is far from "over built," says Witt, with many buyers looking for something unique.

The Toronto architects' vision for their condo projects are part of a burgeoning school of thought in which buildings are connected to their environments and not insulated from them as those large towers often are, though clearly for many buyers, that's a selling feature.

The Main Street concept of design has been strongly rooted in other great cities around the world and is starting to take hold in Toronto. Cube, a project on the edge of Little Italy on College St. designed while they were at their previous firm, Quadrangle, sold out in two hours as buyers lined up solely on word of mouth for the 21 units ranging from 1,200 to 2,000 square feet.

Their next project is Stage East at Queen Street East and Leslie Street in another neighbourhood seeing rapid change. It's not for sale yet but the buzz is building.

"I think the Toronto market has matured to a point where it's able to accept projects of this nature," says Colthoff. "It's a natural evolution instead of taking a green field and building a huge tower."

As Witt notes, it's always going to be a question of economics. Developing projects is costly and those putting up the money want to maximize returns and a multi-storey project often entails less risk because the costs are spread over more units.

However, as land values increase in Toronto, developers are able to sell fewer units for higher prices and still recoup their costs.

For that kind of money – in the $700,000 to $1 million range – buyers want more than a box with windows.

And that's where attention to detail beyond granite counters, oak floors and Jacuzzi tubs starts to pay off. At Stage East, for example, the lofts in the six-storey building will rise upas two structures with a central bridge between them acting as a courtyard which will look west over the city. It, too, will have green roofs and terraces galore but perhaps the key feature will be the entrance way.

At the heart of the courtyard there will be a glass elevator shaft which homeowners will ride up to their units.

"We wanted to make sure they didn't enter as if they were going into a subway," says Colthoff. "The glazed elevator makes arriving more of an event than coming into a windowless corridor. You have multiple level terraces and a courtyard."

Indeed, their enthusiasm for smaller and more intimate designs and willingness to tackle challenging sites where traditional designs won't work is attracting interest near and far.

They've been retained to work on five blocks of a 14-block lowrise development in Dubai – the home of soaring towers – with New York architects FxFowle.

Both Witt and Colthoff are convinced there are many smaller lots suitable for such "incremental" development but say because profit margins are thinner, the city should consider cutting developers a break in the approvals process.

"They can't afford delays on these types of projects," says Witt.

The problem, he says, is that the applications for smaller projects wait in the queue behind the large towers, which take longer to be reviewed because, naturally, they are bigger and more complex.

Also, he says, the building code and standards for multiple housing units are set up for large buildings when a more flexible set of rules could be put in place, as happens in Europe.

The city, meanwhile, is pushing for intensification of land use to bolster its tax base and make up revenues lost by the erosion of light and heavy industrial lands. At the same time it wants to attract world class architecture and sustainable design.

August 22, 2008 in Toronto Home Design | Permalink | Comments (6) | TrackBack

Monopoly Here and Now

Three Canadian cities to be featured on latest Monopoly game

Monopoly's boardwalk stroll is now a hike up Mount Royal, and getting from jail to free parking means a trip through Canada's financial capital and Stanley Park. Hasbro Inc., announced Wednesday that Montreal, Vancouver and Toronto would be among the 22 cities included in Monopoly Here and Now: The World Edition.

Hasbro said the cities were chosen through an international vote that saw more than five million Monopoly fans cast ballots for the global cities they wanted to see on the first ever global edition of the popular board game.

Montreal will occupy the place of honour previously held by Boardwalk and will be paired with the Latvian capital of Riga to represent the most expensive property group on the board.

Vancouver will become the flagship piece of real estate in the orange group, while Toronto will join Kyiv and Istanbul to comprise the Magenta properties. Canada and China are the only countries to feature three cities on the board.

Events were held in all three Canadian cities Wednesday, with life-sized game boards for fans and dignitaries to get acquainted with.

In Toronto, Mayor David Miller was given the city's title deed by a man dressed as Mr. Monopoly. He shrugged off the fact both Montreal, at $4 million, and Vancouver at $2 million, were valued higher in the new game than Toronto, priced at $1.4 million.

"There's a part of all of us that wants to be Boardwalk," Miller chuckled. "But if you want to win Monopoly, you buy the affordable places and you build hotels, that's what going to happen with Toronto."

Miller did his best, however, to get in one dig at his city's longtime rival.

"Congratulations to Montreal, but when we play, we're still going to win."

Montreal Mayor Gerald Tremblay told a ceremony in the Old Port that the city's place on the board gives it visibility and would attract more tourists eventually.

He says he played Monopoly as a child.

"I learned a lot and I took the necessary steps to use my youth to be more successful in the business sector."

Melissa Martin of Toronto just started playing the game again with her children, and gave the new version rave reviews.

"I love the new board, I love the fact Canada's on there three times ....," said Martin.

The Toronto and Vancouver squares feature the waterfront cityscape of each, with the Rogers Centre and the Rocky Mountains providing the respective backdrops. Montreal's square features St. Joseph's Oratory, which sits atop Mount Royal.

Monopoly's global makeover goes beyond the switch from streets to cities as prime real estate.

Hasbro said the old utilities of Electric Company and Water Works are being replaced with Wind Energy and Solar Energy to reflect the growing emphasis on worldwide environmental concerns.

The four railroads prominent on the traditional monopoly board have been cut back to one with air, cruise and space travel now available as transportation options.

The international theme is also featured in the refurbished Community Chest and Chance cards which now allow players to organize global music festivals, or attend iconic cultural events such as Carnival in Rio De Janeiro or St. Patrick's Day in Dublin.

The global edition of Monopoly, originally released in 1935, is the latest in a series of modernizations meant to bring the game up to date.

Multimedia versions of the game also figure into Hasbro's modernization strategy.

In addition to the global edition board game, which will be available on August 26, an online and mobile version will be available for download the next day with a version for most popular gaming consoles set for release in October.

August 20, 2008 in World View [of real estate] | Permalink | Comments (2) | TrackBack

Is Toronto's condo boom is over?

New condos are still shooting up to crowd the Toronto skyline, but behind the scenes the condo boom times are ending, a new report predicts. "We're expecting a slowdown in 2009," said Jane Renwick, editor and vice-president of Urbanation, a market research company.

"So we would say that we were at 22,000 [condo] sales at the end of 2007. We're predicting 16,000 sales to round out this year. And we're expecting sales to dip beyond that in 2009."

Urbanation released a report yesterday about the Toronto condo market's second quarter of 2008.

Following record condo sales in 2007, she said, the market is now back to 2005 and 2006 levels.

Currently, she said, the market appears "more normal and predictable," with sales volumes returning to earlier levels and prices climbing slightly.

But economic woes in the United States, a high dollar and a loss of manufacturing jobs, she said, are pointing toward a recession and a condo market contraction.

"We're not predicting a crash by any means," she said. "I would say that we'll have a correction in terms of sales volume, but I don't think we'll have the same correction in terms of price."

The good news, she said, is that this contraction shouldn't be on the level of the condo market crash of 1989 to 1991

Starting in 1986, she said, prices started increasing by 6-7%, quarter over quarter. In 1987, the price increases exceeded 20%, year over year.

At the end of 1988, condos were selling for 39% more than the year before. And in 1989, there were a couple of quarters with 40% price increases, year over year.

"Those things say a correction is inevitable -- it's price inflation," she said.

And the result, she said, was that in 1991 and 1992, condo pricing dropped by 17%, 16% and 15% year over year.

But this time, she said, the price increases are more modest. In 2007, she said, price inflation was between 10-12%, year over year, relative to the year prior; now it's at 8%.

"There was some price inflation last year which always happens in a heated market, but it didn't get out of control to the point where it was requiring a correction to bring it back down in line with value," she said.

The number of condos being built, she said, are likely to decline from both a rise in construction costs and a credit crunch in the banking sector, which is making it tricky for less-established developers to find financing.

"So ABC developer launches a building, thinking everything is fine with what they consider the historic pre-sale requirements in order for the financing to kick in," she said, "and the banks are saying we actually don't have an appetite for this because we can't."

Even if supply diminishes, she said, Urbanation predicts that prices will flatten out as opposed to rising.

"We're also saying that the demand will wane--hopefully those two things happen in unison and create some kind of balance," she said.

Maureen O'Neill, the president of the Toronto Real Estate Board, said that the advantage to the current softening real estate market is its stability.

"Because it's declining, it's correcting, it's balancing to make it a lot more stable," she said.

"At least now we know what we're looking at."

New condos are still shooting up to crowd the Toronto skyline, but behind the scenes the condo boom times are ending, a new report predicts. "We're expecting a slowdown in 2009," said Jane Renwick, editor and vice-president of Urbanation, a condominium market research company.

"So we would say that we were at 22,000 [condo] sales at the end of 2007. We're predicting 16,000 sales to round out this year. And we're expecting sales to dip beyond that in 2009."

Urbanation released a report yesterday about the Toronto condo market's second quarter of 2008.

Following record condo sales in 2007, she said, the market is now back to 2005 and 2006 levels.

Currently, she said, the market appears "more normal and predictable," with sales volumes returning to earlier levels and prices climbing slightly.

But economic woes in the United States, a high dollar and a loss of manufacturing jobs, she said, are pointing toward a recession and a condo market contraction.

"We're not predicting a crash by any means," she said. "I would say that we'll have a correction in terms of sales volume, but I don't think we'll have the same correction in terms of price."

The good news, she said, is that this contraction shouldn't be on the level of the condo market crash of 1989 to 1991

Starting in 1986, she said, prices started increasing by 6-7%, quarter over quarter. In 1987, the price increases exceeded 20%, year over year.

At the end of 1988, condos were selling for 39% more than the year before. And in 1989, there were a couple of quarters with 40% price increases, year over year.

"Those things say a correction is inevitable -- it's price inflation," she said.

And the result, she said, was that in 1991 and 1992, condo pricing dropped by 17%, 16% and 15% year over year.

But this time, she said, the price increases are more modest. In 2007, she said, price inflation was between 10-12%, year over year, relative to the year prior; now it's at 8%.

"There was some price inflation last year which always happens in a heated market, but it didn't get out of control to the point where it was requiring a correction to bring it back down in line with value," she said.

The number of condos being built, she said, are likely to decline from both a rise in construction costs and a credit crunch in the banking sector, which is making it tricky for less-established developers to find financing.

"So ABC developer launches a building, thinking everything is fine with what they consider the historic pre-sale requirements in order for the financing to kick in," she said, "and the banks are saying we actually don't have an appetite for this because we can't."

Even if supply diminishes, she said, Urbanation predicts that prices will flatten out as opposed to rising.

"We're also saying that the demand will wane--hopefully those two things happen in unison and create some kind of balance," she said.

Maureen O'Neill, the president of the Toronto Real Estate Board, said that the advantage to the current softening real estate market is its stability.

"Because it's declining, it's correcting, it's balancing to make it a lot more stable," she said.

"At least now we know what we're looking at."

August 20, 2008 in Toronto Real Estate Trends | Permalink | Comments (0) | TrackBack

Toronto Real Estate Board reports:

GTA Resale Housing Remains Stable in August

The Greater Toronto Area (GTA) resale housing market remained stable throughout the first half of this month, Toronto Real Estate Board President (TREB) Maureen O'Neill announced today. "We're continuing to see consistent levels with respect to sales volumes and prices," said Ms. O'Neill. "While the numbers are more conservative than those in recent years, the stability we're experiencing should help sustain consumer confidence as we move into the fall market."

With 3,019 transactions in the GTA during the first half of the month, sales were down 13 per cent compared to the 3,480 sales recorded at mid-August last year, and off eight per cent compared to the 3,290 sales recorded during the same period in 2006.

In the City of Toronto, 1,192 transactions were recorded, down 15 per cent from the 1,411 sales that took place in the first half of August 2007, and off six per cent compared to the 1,269 sales that occurred in the same timeframe two years ago.

"While 2007 was a record year, it is still worthwhile to note that sales in the City of Toronto increased 11 per cent between mid-August 2006 and mid-August 2007, before the Toronto Land Transfer Tax went into effect," said Ms. O'Neill.

In the 905 Region there were 1,827 sales to mid-month, down 12 per cent from the 2,069 transactions that took place in the same period a year ago, and off 10 per cent from the 2,021 sales recorded in the first two weeks of August 2006.

Prices meanwhile, increased compared to the same timeframe last year. The current average price in the GTA is $373,844, up five per cent from the mid-August 2007 figure of $354,088.

In the City of Toronto the average price is currently $394,563, up seven per cent from the $370,037 figure recorded a year ago.

In the 905 Region the average price is $360,325, up five per cent from the $343,210 recorded at mid-August 2007.

There are currently 26,128 active listings, up 28 per cent from the 20,365 properties available for sale a year ago. This has resulted in homes remaining on the market for a slightly longer period of 35 days compared to 32 days last August.

Several GTA neighbourhoods however, experienced brisk sales throughout the first half of this month.

In Whitby (E15) transactions increased 12 per cent compared to the same period a year ago as a result of strong detached home sales.

Detached home sales also led Aurora (N06) to a 21 per cent increase in transactions.

Streetsville (W19) saw eight per cent more transactions driven by a significant increase in the sale of attached row houses.

In Downtown Toronto (C01) transactions increased six per cent compared to mid-August 2007 as a result of strong sales in all housing types.

"It's encouraging to see strong activity levels in pockets throughout all four corners of the GTA", Ms. O'Neill said.

August 19, 2008 in Toronto Real Estate Update | Permalink | Comments (4) | TrackBack

CMHC lifts new home starts forecast

Canada Mortgage and Housing Corporation said in a report released yesterday that new home construction will decline less this year than had been earlier forecast as the country benefits from strong job growth and higher incomes.

About 215,475 homes will be built this year, up from a May forecast of 214,650 units, the Ottawa-based CMHC said today. New home construction will drop from last year's 228,343 units.

"Strong economic fundamentals such as continuing high employment levels, rising incomes and low mortgage rates will provide a solid foundation for healthy housing markets this year, Bob Dugan, CHMC's chief economist, wrote in the report.

August 16, 2008 in Canadian Market Forecast | Permalink | Comments (2) | TrackBack

 

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