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GTA 2019

7 factors that will affect GTA housing in 2019 – and 5 reasons to consider buying NOW

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7 factors that will affect GTA housing in 2019 – and 5 reasons to consider buying NOW

GTA 2019

By Wayne Karl

GTA homebuyers, we have some good news and some bad news.

First, the good news: You live in one of the most desirable areas and housing markets in Canada – maybe even the world.

The bad news? That affordability challenge we’re all facing.

“The affordability issue is not going away,” PricewaterhouseCoopers says plainly, in its Emerging Trends in Real Estate 2019 report.

Why? See point number one.

“Potential homebuyers will need to alter their expectations and possibly delay entry into homeownership,” Dana Senagama, manager, market analysis for Canada Mortgage and Housing Corp. (CMHC), told Homes Publishing.

Not exactly the most hopeful outlook for those – especially first-timers – looking to buy a home in and around the GTA.

But it’s not all bad. Let’s look at what’s going on in the market, and what would-be buyers can do to help their cause.

1 Return to price growth

Following the introduction of the Ontario Fair Housing Plan in April 2017, recent interest rate hikes and other changes, sales and prices in the GTA have seen some moderation.

But the slowing will be short-lived, Senagama says. Key economic fundamentals such as population and employment growth will continue to drive housing market demand, but the supply of new homes is not being addressed. The result? A return to price growth.

“CMHC is working on data gaps like supply with many industry stakeholders and partners,” she says. “Currently, we are participating in a working group with the province of Ontario to find solutions and best practices.”

PwC says the region is feeling the effects of demographic shifts. Millennials have begun to compete with Baby Boomers for real estate, and over the next decade, almost 700,000 first-time buyers will target the GTA or Hamilton markets, according to a May 2018 report from the Ontario Real Estate Association.

2 Risk of overvaluation

Senagama cautions, however, that the Toronto market is still showing signs of overvaluation.

“This happens when house price growth is surpassing the population and income growth. So, despite some of the moderation you’re seeing, we’re still calling for a high degree of vulnerability in Toronto in the foreseeable future.”

3 Inelastic supply

The GTA housing market is characterized by inelastic supply. “Supply is slow to respond to any change in price, and we’re seeing that time and time again,” she says.

Recent research from CMHC and Altus Group, in fact, shows that of the lowrise new home projects that were started in 2016 and 2017, it took 15 years for those developments to go from the initial land purchase to product hitting the market.

Supply response
Source: CMHC

 

“We have a problem, in terms of supply.”

With very limited new home supply hitting the market, once buyers get used to temporary shocks to the system brought on by policy issues and rising interest rates, they return to buying homes, which in turn drives up prices.

4 Condo demand

With lowrise home prices enjoying spectacular growth in recent years, there was a compositional shift in demand toward less expensive product – namely condos – particular among first-time buyers.

But now, with price growth even in this category – with average condo prices rising 8.4 per cent year-over-year to $552,269in the third quarter this year – and pre-construction units in the $700,000 range…

“These are not price points for first-time buyers,” Senagama says, “so we’re still looking at very high prices across the GTA.”

5 Mortgage rates

The Bank of Canada has already raised its influential overnight rate target three times since July 2017, to 1.5 per cent from 0.75 per cent. Experts expect at least one more increase this year, possibly as early as the next rate announcement on Oct. 24.

A more moderate pace of rate increases could impact the market, but not significantly since the majority of mortgage holders are on fixed-rate mortgages, CMHC research shows.

6 Rental market

Any discussion about affordability needs to include the rental market, Senagama says. “Much like the ownership segment, supply is a huge constraint in the Toronto rental market.”

Rental

With the average vacancy rate in the GTA 1.1 per cent, and 0.7 per cent for condo rentals, rental rate increases are picking up steam. “Because we have a supply problem. And because we don’t have enough supply of the purpose-built rental units, the gap has been filled in by the condo market.”

About 33 per cent of all condos in Toronto are being rented out by investors, according to CMHC. This results in renters paying a much higher premium to rent a condo versus a purpose-built apartment – on average 50 per cent more, for a two-bedroom unit.

“We talk about affordability, and this raises so many other concerns, especially in a market that is supply-strapped,” Senagama says.

7 Catch 22

investors are buying into the condo market to rent out their units, taking advantage of the tight rental market. But first-time buyers – who typically aren’t equity-rich or wealthy – have to compete for available condo product, which again drives up prices.

 

 

5 REASONS TO BUY A HOME NOW (OR AS SOON AS YOU CAN)

1 Affordability

More supply of new homes is a big part of the solution. But despite ongoing lobbying from the housing industry, and apparent increasing awareness of new elected municipal leaders, this problem won’t be solved overnight. It will take time. Lots of it. In the meantime, as PricewaterhouseCoopers says: The affordability issue is not going away. It might even get worse before it gets better.

2 Market moderation waning

With little relief on the supply side expected, price growth will continue to be strong, even if somewhat muted compared to the double-digit increases seen over the last few years. In short, the longer buyers wait, the more it could cost you.

3 Interest rates

Experts expect at least one more increase this year, possibly as early as the next rate announcement on Oct. 24. To protect yourself against a more moderate pace of rate increases, consider a fixed-rate mortgage product.

4 Pent-up demand

Buyers believe prices are going to increase, but not to the same degree we’ve seen in recent years. This will lead to pent-up demand, which when released over the next year, will contribute to increasing buying activity and rising prices. So, if you’re able to buy before then, you could beat the rush.

5 Rental market

If you’re a Millennial planning to move out of home and into the rental market, consider this: Toronto is the most expensive Canadian rental market, with average rates for one-bedroom units at slightly more than $1,900 per month (up 2.8 per cent from August to September); $2,374 for two-bedrooms (up 7.1 per cent). Try saving up for a down payment at those rates; maybe staying at home a little longer isn’t so bad after all.

Wayne Karl is Senior Digital Editor at Homes Publishing. wayne.karl@homesmag.com 

RELATED READING

Municipal candidates aware of housing needs – TREB poll

5 steps to solving the housing affordability issue in Ontario

5 affordable neighbourhoods for detached homes in 416 and 905

Vast majority of GTA Millennials fear buying a home is out of reach, poll says

GTA housing market correction coming to an end, ReMax says

 

 

 

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Mortgage

Home prices and affordability still a concern – CMHC Mortgage Consumer Survey

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Home prices and affordability still a concern – CMHC Mortgage Consumer Survey

Mortgage

Rising home prices and affordability continue to weigh on prospective homebuyers, according to Canada Mortgage Housing Corp., in its 2018 Mortgage Consumer Survey.

Indeed, for first-time buyers, price and affordability are the most important factors they consider when buying a home – more than type of neighbourhood, proximity to work and overall condition of the home.

While decreasing steadily for four consecutive surveys, more than one-third (37 per cent) of homebuyers continue to feel concern or uncertainty when buying a home. “Concerns related to affordability top the list with more than 50 per cent of concerned buyers worrying about paying too much for their home while nearly one-third worry about rising interest rates and mortgage qualification,” the survey says.

Other survey highlights include:

  • Eighty-five per cent of first-time buyers spent the most they could afford on their home purchase.  However, a majority (76 per cent) are confident that they will be able to meet their future mortgage payment obligations.
  • Sixty per cent of first-time buyers and 69 per cent of repeat buyers indicated that, if they were to run into some financial trouble, they would have sufficient assets (such as investments and other property) to supplement their needs.
  • About 50 per cent of homebuyers agreed they would feel comfortable using more technology to arrange their next mortgage transaction. However, the majority agree it is important to meet face-to-face with their mortgage professional when negotiating and finalizing their mortgage.
  • Slightly more than half (52 per cent) of homebuyers were aware of the latest mortgage qualification rules. About one in five first-time buyers indicated the rules impacted their purchase decision with most opting to decrease non-essential expenses, purchase a less expensive home or use savings to increase their down payment.
  • Consumers continue to show confidence in their homebuying and mortgage decisions, with 80 per cent believing that homeownership remains a good long-term financial investment and 66 per cent believing the value of their home will increase in the next 12 months.
  • More than one in five (22 per cent) first-time buyers were newcomers to Canada and almost 50 per cent were millennials (aged of 25 to 34), down from 60 per cent in 2017.

RELATED READING

5 steps to solving the housing affordability issue in Ontario

Build For Growth: Housing Affordability

Higher Rates and New Rules Cooling the Condo Market

 

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THE ANALYST : Premier Ford: Seven steps to housing affordability

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THE ANALYST : Premier Ford: Seven steps to housing affordability

By Andrew Brethour
PMA Realty

It’s early in the mandate, but here are seven steps to relieving the price pressure and improving housing affordability in the GTA that Ontario Premier Doug Ford should consider. None of these ideas are quick fixes and each will require careful examination and implementation over several years. It took us 15 years to get into the untenable position we find ourselves in today and it will take a while to turn the “affordable ship” around.

STEP ONE

Supply, Supply, Supply

The last year of the housing supply study coordinated by our firm, PMA Realty, in consultation with CMHC, the Ministry of Housing and BILD was in 2003. The study was completed annually from 1997 and created a databank of net residual residential land supply covering 37 municipalities in the GTA. The total number of lots (low density) and units (high density) were identified as in process, at draft stage and in registered plans of subdivision. All zoned land was included but not yet identified.

Provincial policy at the time was to maintain a three-year supply in these three noted categories. Today, 15 years later, we have a three-month supply. The province introduced the growth plan in 2004 but never did an economic impact statement. In 2004, a serviced 40-foot lot sold for $2,500 per front foot, or $100,000. Today, that same lot — if you can find one — sells for $20,000 per front foot, or $800,000. This reckless and irresponsible escalation in the underlying price of land was driven mostly by provincial policy, not consumer demand.

Mr. Premier, step one is to re-institute the annual land supply analysis and clearly determine the current and projected supply of lots and units in the now Greater Toronto and Hamilton Area. By 2030, only 12 years from now, population growth is projected to move from six million to nearly nine million people. Without a barometer of supply, growth will stagnate and go elsewhere.

STEP TWO

Approval Process

The approval process takes too long and is too costly, further affecting affordability. Mr. Premier, review, streamline and deregulate the approval process. The GTA must compete on a North American, even global, basis for new employment opportunities. Many southern U.S. cities where growth is comparable to the GTA take a matter of months from land purchase to approval for construction. In the GTHA, it is an average of more than 10 years. Provincial policy should be set at a maximum of three years.

Mr. Premier, that is your challenge.

STEP THREE

Rent Controls

Mr. Premier, much has been written, studied, reviewed and “controlled” in rental housing, yet these controls have not produced more rental stock but, in fact, less. And the existing stock is crumbling.

Yet the divide between the “protected consumer” and the purpose-built rental developer is not that far apart. Rent controls were reset last year in the fair housing plan at an annual increase limit of 2 per cent. Rental buildings are financed over a 20 to 30 year project life period. An extra 1.5 per cent in annual rental increase would make the difference between thousands of projects being cancelled and thousands being built.

Mr. Premier, allow annual rent increases to rise to 3.5 per cent and you will be amazed at the amount of rental activity that will produce.

STEP FOUR

Hidden Taxes

The tax component of a new home was recently outlined in an excellent C.D. Howe Institute study — over $100,000 per unit in Ontario and over $150,000 per unit in the GTA. If we truly want greater affordability, it can be delivered with lower taxes and greater supply. As sales volumes have declined drastically in the last two years, the municipalities’ response to declining revenue is to increase the development charge. A Catch 22 when it comes to affordability.

Mr. Premier, examine municipalities’ ability to finance infrastructure with an underlying purpose to reducing taxes on new construction. Let’s look for alternatives. One might look at sewer and water infrastructure, currently financed by 30 to 40 per cent of the development charges on new homes. The real cost, in fact, subsidizes existing homeowners. Raise sewer and water rates on all housing to properly reflect the cost, which in turn will lead to greater conservation and more affordable new housing.

STEP FIVE

Replace the OMB

Mr. Premier, the new system introduced in the dying days of the Wynne government eliminated the OMB and replaced it with a Local Planning Appeal Tribunal (LPAT), where “not in it in my backyard” reigns supreme. This will further delay the approval process. Create a Provincial Dispute Resolution Panel with the oversight to look at the “bigger picture,” the provincial vision for housing density and affordability.

Mr. Premier, re-introduce the office of the Development Ombudsman so that disputes or delays are resolved or arbitrated before reaching the OMB or its replacement body.

STEP SIX

Modify the Planning Act

Re-introduce the ability of a developer to bring forward a plan from outside an urban boundary. Let the developer front the cost of services. The municipality can still say no. This provision was removed from the planning act in 2004, further constricting supply.

STEP SEVEN

The Hidden Supply – Employment Lands

Currently, Mr. Premier, employment lands are untouchable. They cannot be considered for residential use yet the very nature and scope of industrial commercial lands has changed dramatically in the last 15 years.

Introduction of Robotics and AI have modified the design and formation of today’s employment spaces. Malone Givens Parsons points out we have used only 34 per cent of available employment lands in the GTA. Conversely, we have used or allocated over 57 per cent of available residential lands. Integrating mixed-use development into employment lands would open up supply dramatically from the current rigid lines drawn on our municipal maps.

Just take a walk around existing older employment designated lands today and the potential supply jumps right out. An instant supply solution is available by potentially converting employment land to mixed-use residential.

Mr. Premier, study the implication and provide the supply solution.

So, there you have it, Mr. Premier, seven steps to improving housing affordability in the GTA.

Mr. Premier, start with theses simple Seven Steps and perhaps another “promise made, promise kept” is possible on the affordable housing file in your first term. Good Luck Mr. Premier!

Andrew Brethour is chairman and CEO of PMA Brethour Realty Group. http://www.pmabrethour.com/

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Condo Market: Is A Condo Right For You?

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Condo Market: Is A Condo Right For You?

This is such a good question that CMHC has devoted an entire section of its “Condominium Buyer’s Guide” to “The Pros and Cons of Condominium Ownership.” Yes, there are a few cons for some people, but the advantages far outweigh them. Still, it is important to be realistic when it comes to making your purchase decision. The best way to do that is to consider all of the parameters of buying a condominium suite in a new building, and then to be realistic about condo living.

For example, CMHC lists one “con” as possibly paying for amenities you hardly ever or never use. The first thing that comes to mind is the swimming pool. Depending on the buyer, the existence or absence of a pool can be a deal-breaker. In fact, savvy buyers who rarely use a pool understand that the portion of their maintenance fees that covers this amenity is very small, and the fact that there is a beautiful pool in the building can add to a suite’s future resale value.

Another point under CMHC’s “cons” is the possibility of having less privacy and more noise in a condo. Today’s developers are going to great lengths to use construction materials and techniques that keep noise to a minimum. In addition, most balconies have privacy walls. As for the interior of the building, by virtue of what a condominium is, residents do interact with people on a daily basis in elevators and common spaces. They have privacy in their suites, and they can socialize when they want to.

And take CMHC’s “con” of restrictions on things such as pets, smoking, window coverings, what you can keep on your balcony, etc. It is true that the condominium corporation will set out standards that are expected to be followed to protect residents’ privacy, safety and quality of life. This benefits everyone in the building.

I could go on, but my point is, are these really “cons,” or are they simply the realities of condo living? The pros listed are enticing: having a say in the running of the condominium; fewer responsibilities for maintenance and repairs; access to gorgeous building amenities; security features; predictable condo fees; and more.

This goes for singles, couples and families. It really does take a community to raise a child, and more parents are realizing that condominiums are in essence vertical communities where people get to know their neighbours in the hallways, elevators and shared amenity spaces. Today’s condominiums are graced with familyfriendly amenities, from fitness facilities to games rooms, theatres, party rooms, pools and rooftop barbecue terraces. Some condos even feature daycare facilities. Remember, too, that the condominium lifestyle includes the peace-of-mind of built-in security measures, beginning with eyes-on-the-street concierge service.

Whatever your situation, if you are shopping for a condo for the first time, gather all of the resources you can. Visit www.cmhc-schl.gc.ca/en/buying/condominium-buyers-guide and read through it carefully. I cannot say enough about the joys of condominium living. What a wonderful lifestyle choice for people of all ages!

BARBARA LAWLOR is president and CEO of Baker Real Estate Incorporated, winner of the pinnacle 2017 Riley Brethour Award from BILD, and an in-demand columnist and speaker. A member of the Baker team since 1993, she oversees the marketing and sales of condominium developments in the GTA and overseas. Keep current with The Baker Blog at blog.bakerrealestate.com

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CMHC Housing Starts November 2017

CMHC reports housing starts realizes large gain in November 2017

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CMHC reports housing starts realizes large gain in November 2017

Trend in housing starts reached its highest level in almost 10 years, reflecting a second consecutive increase in multiple starts

OTTAWA (CNW) — The trend in housing starts was 226,270 units in November, compared to 216,642 units in October, according to Canada Mortgage and Housing Corporation (CMHC). This trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

“The trend in housing starts reached its highest level in almost 10 years this November, reflecting a second consecutive increase in multiple starts,” said Bob Dugan, CMHC’s chief economist. “This largely reflects construction of multiple units in Toronto, where evidence of overbuilding is low due to the decreasing inventory of completed and unabsorbed multiple units and strong demand.”

Monthly Highlights

 Toronto

Total housing starts in the Toronto Census Metropolitan Area (CMA) trended higher in November. Multiple-family dwelling starts trended significantly higher and contributed to the overall increase. Given escalating house prices of single-detached homes, more homebuyers continued to shift demand towards lower priced condominium apartments and townhomes. Higher sales of pre-construction condominium units in the past two years will continue to break ground throughout this year resulting in more condominium apartment starts.

Guelph

Guelph builders started 269 homes in November, significantly higher than the 62 homes started a year ago. This increase was due to the jump in apartment starts, which are above the 10-year average in response to strong demand from downsizing seniors, young households, immigrants and students. The rental market in Guelph is tight with a vacancy rate of 1.2 per cent. The strong demand for rental apartments has translated into more apartment starts. Single-detached and townhouse starts are lower this year. Fewer lowrise new home sales this year have translated into lower starts.

Kitchener-Cambridge-Waterloo

KitchenerCambridgeWaterloo builders started 658 homes in November, significantly higher than the 222 homes started a year ago. For the first 11 months of 2017, single-detached starts are lower, while starts for townhouses are up 51 per cent and for apartments, 26 per cent. Demographics are playing a role in new home construction, as there has been a shift to smaller households. One-person households, couples without children households and lone-parent households are increasing at a much faster pace than couples with children households, which stimulates demand for affordable options such as townhouses and apartments.

London

Total housing starts in London CMA posted one of the highest levels ever recorded for the month of November. Strong population growth and a low supply of resale home listings have strengthened demand for new single-detached homes, resulting in a 13 year high for single-detached starts during the month of November. In addition, stronger rental demand this year, indicated by the lowest vacancy rate since 2001, has already led to a higher number of apartment starts this year than the annual record set in 2016.

Vancouver

Seasonally adjusted monthly starts in the Vancouver CMA were lower in November mostly due to a pullback in apartment starts as the construction sector remains at full capacity. Fewer multi-family condo and rental projects are getting underway in the City of Vancouver, Richmond, and on the North Shore, meanwhile, Burnaby and New Westminster have observed higher multi-family starts so far in 2017, relative to the same period last year.

CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of Canada’s housing market. In some situations, analyzing only SAAR data can be misleading, as they are largely driven by the multi-unit segment of the market, which can vary significantly from one month to the next.

The standalone monthly SAAR of housing starts for all areas in Canada was 252,184 units in November, up from 222,695 units in October. The SAAR of urban starts increased by 14.4 per cent in November to 235,412 units. Multiple urban starts increased by 16.9 per cent to 175,016 units in November. Single-detached urban starts increased by 7.5 per cent, to 60,396 units.

Rural starts were estimated at a seasonally adjusted annual rate of 16,772 units.

As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.

Preliminary Housing Start Data in Centres 10,000 Population and Over

Single-Detached

All Others

Total

Nov. 2016

Nov. 2017

%

Nov. 2016

Nov. 2017

%

Nov. 2016

Nov. 2017

%

Provinces (10,000+)
N.-L.

66

55

-17

27

57

111

93

112

20

P.E.I.

16

29

81

11

55

400

27

84

211

N.S.

127

113

-11

230

216

-6

357

329

-8

N.B.

62

83

34

65

107

65

127

190

50

Atlantic

271

280

3

333

435

31

604

715

18

Qc

520

546

5

2,325

3,536

52

2,845

4,082

43

Ont.

2,672

2,303

-14

2,466

6,202

152

5,138

8,505

66

Man.

190

202

6

309

303

-2

499

505

1

Sask.

188

141

-25

81

186

130

269

327

22

Alta.

1,016

1,000

-2

1,027

1,774

73

2,043

2,774

36

Prairies

1,394

1,343

-4

1,417

2,263

60

2,811

3,606

28

B.C.

832

1,005

21

2,826

2,813

0

3,658

3,818

4

Canada (10,000+)

5,689

5,477

-4

9,367

15,249

63

15,056

20,726

38

Metropolitan Areas
Abbotsford-Mission

15

57

280

5

112

##

20

169

##

Barrie

44

83

89

12

73

##

56

156

179

Belleville

**

34

##

**

18

##

**

52

##

Brantford

8

8

14

2

-86

22

10

-55

Calgary

346

390

13

399

1,114

179

745

1,504

102

Edmonton

436

400

-8

550

526

-4

986

926

-6

Greater Sudbury

12

18

50

2

6

200

14

24

71

Guelph

16

19

19

46

250

443

62

269

334

Halifax

46

51

11

195

171

-12

241

222

-8

Hamilton

91

59

-35

81

366

352

172

425

147

Kelowna

93

88

-5

51

145

184

144

233

62

Kingston

38

11

-71

7

11

57

45

22

-51

Kitchener-Cambridge-Waterloo

97

88

-9

125

570

356

222

658

196

Lethbridge

**

34

##

**

6

##

**

40

##

London

141

163

16

84

478

469

225

641

185

Moncton

29

23

-21

16

91

469

45

114

153

Montréal

209

237

13

1,188

1,921

62

1,397

2,158

54

Oshawa

43

111

158

78

188

141

121

299

147

Ottawa-Gatineau

201

242

20

267

787

195

468

1,029

120

Gatineau

24

48

100

77

33

-57

101

81

-20

Ottawa

177

194

10

190

754

297

367

948

158

Peterborough

27

16

-41

9

0

-100

36

16

-56

Québec

90

66

-27

409

975

138

499

1,041

109

Regina

68

36

-47

30

102

240

98

138

41

Saguenay

17

19

12

26

41

58

43

60

40

St. Catharines-Niagara

122

110

-10

28

132

371

150

242

61

Saint John

6

25

317

6

2

-67

12

27

125

St. John’s

54

42

-22

24

52

117

78

94

21

Saskatoon

99

79

-20

25

60

140

124

139

12

Sherbrooke

28

22

-21

141

130

-8

169

152

-10

Thunder Bay

12

16

33

2

12

##

14

28

100

Toronto

1,308

886

-32

1,435

3,014

110

2,743

3,900

42

Trois-Rivières

16

13

-19

103

35

-66

119

48

-60

Vancouver

379

497

31

2,272

2,141

-6

2,651

2,638

0

Victoria

69

67

-3

199

156

-22

268

223

-17

Windsor

77

45

-42

63

96

52

140

141

1

Winnipeg

166

153

-8

291

291

457

444

-3

Total

4,403

4,208

-4

8,183

14,074

72

12,586

18,282

45

Data for 2016 based on 2011 Census Definitions.
Data for 2017 based on 2016 Census Definitions.
Source: Market Analysis Centre, CMHC

Preliminary Housing Start Data – Seasonally Adjusted at Annual Rates (SAAR)

Single-Detached

All Others

Total

Oct.2017

Nov.2017

%

Oct.2017

Nov.2017

%

Oct.2017

Nov.2017

%
Provinces (10,000+)
N.L.

517

526

2

511

612

20

1,028

1,138

11

P.E.I.

480

284

-41

252

660

162

732

944

29

N.S.

1,226

1,047

-15

1,180

2,420

105

2,406

3,467

44

N.B.

813

789

-3

2,154

1,266

-41

2,967

2,055

-31

Qc

6,191

6,440

4

43,848

38,311

-13

50,039

44,751

-11

Ont.

21,190

24,470

15

36,626

71,271

95

57,816

95,741

66

Man.

2,384

2,414

1

1,968

3,636

85

4,352

6,050

39

Sask.

1,825

1,570

-14

3,372

2,232

-34

5,197

3,802

-27

Alta.

11,960

11,078

-7

15,416

21,100

37

27,376

32,178

18

B.C.

9,604

11,778

23

44,341

33,508

-24

53,945

45,286

-16

Canada (10,000+)

56,190

60,396

7

149,668

175,016

17

205,858

235,412

14

Canada (All Areas)

69,161

73,247

6

153,536

178,937

17

222,695

252,184

13

Metropolitan Areas
Abbotsford-Mission

260

688

165

1,140

1,344

18

1,400

2,032

45

Barrie

836

1,048

25

600

876

46

1,436

1,924

34

Belleville

391

489

25

276

216

-22

667

705

6

Brantford

151

142

-6

0

24

##

151

166

10

Calgary

4,465

4,178

-6

6,816

13,368

96

11,281

17,546

56

Edmonton

4,396

4,351

-1

4,764

6,312

32

9,160

10,663

16

Greater Sudbury

102

160

57

48

72

50

150

232

55

Guelph

254

263

4

288

3,000

##

542

3,263

##
Halifax

850

628

-26

840

2,052

144

1,690

2,680

59

Hamilton

708

752

6

1,080

4,392

307

1,788

5,144

188

Kelowna

748

839

12

1,212

1,740

44

1,960

2,579

32

Kingston

221

97

-56

168

132

-21

389

229

-41

Kitchener-Cambridge-Waterloo

865

968

12

1,236

6,840

453

2,101

7,808

272

Lethbridge

452

462

2

948

72

-92

1,400

534

-62

London

1,632

1,858

14

504

5,736

##

2,136

7,594

256

Moncton

340

190

-44

1,680

1,092

-35

2,020

1,282

-37

Montréal

2,653

2,741

3

38,178

23,021

-40

40,831

25,762

-37

Oshawa

491

1,485

202

3,096

2,256

-27

3,587

3,741

4

Ottawa-Gatineau

3,004

2,669

-11

3,816

9,444

147

6,820

12,113

78

Gatineau

423

471

11

504

396

-21

927

867

-6

Ottawa

2,581

2,198

-15

3,312

9,048

173

5,893

11,246

91

Peterborough

249

191

-23

48

0

-100

297

191

-36

Québec

769

737

-4

3,276

11,700

257

4,045

12,437

207

Regina

521

399

-23

1,212

1,224

1

1,733

1,623

-6

Saguenay

274

246

-10

324

492

52

598

738

23

St. Catharines-Niagara

870

1,101

27

2,376

1,584

-33

3,246

2,685

-17

Saint John

189

279

48

48

24

-50

237

303

28

St. John’s

368

391

6

504

624

24

872

1,015

16

Saskatoon

1,094

887

-19

1,884

720

-62

2,978

1,607

-46

Sherbrooke

202

247

22

1,092

1,560

43

1,294

1,807

40

Thunder Bay

114

149

31

360

144

-60

474

293

-38

Toronto

6,975

9,040

30

21,048

36,168

72

28,023

45,208

61

Trois-Rivières

188

176

-6

348

420

21

536

596

11

Vancouver

4,376

6,171

41

30,408

25,692

-16

34,784

31,863

-8

Victoria

881

795

-10

8,460

1,872

-78

9,341

2,667

-71

Windsor

615

574

-7

648

1,152

78

1,263

1,726

37

Winnipeg

1,783

1,842

3

1,524

3,492

129

3,307

5,334

61

Data based on 2016 Census Definitions.
Source: Market Analysis Centre, CMHC

SOURCE: Canada Mortgage and Housing Corporation



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25 Leonard Avenue

25 Leonard Avenue

Latest News


25 Leonard Avenue

Condo and homebuilders join forces to help house the homeless

(CNW) — As the weather turns cold for Toronto’s homeless population, the city’s Kensington Market neighbourhood is seeing construction begin on Toronto’s first purpose-built homes for homeless people in more than 10 years.

An excavator broke ground earlier this week in preparation for spring construction on the small strip of land beside St. Clare’s Multifaith Housing Society’s existing building at 25 Leonard Avenue, just east of Bathurst Street. This unique three-storey, 22-unit project was backed by neighbours and made possible with government and private sector support.

St. Clare’s construction partners — including home and condo builders, unions and construction associations — are stepping up to the plate in a $1 million fundraising effort.

The corporate donors are Aspen Ridge, Brown Group, Great Gulf, Greenpark, Heavy Construction Association of Toronto, Laurier Homes, Liberty Development, Lindvest, LiUNA Local 183, LiUNA Ontario Provincial District Council, Mattamy Homes, Menkes, Ontario Formwork Association, Silvercore, Tridel and Yorkwood.

Through its Open Door Program, Toronto is assisting the project with a $500,000 capital grant and waiving municipal fees and development charges.

“This was a must-do project for St. Clare’s. We are relieved to finally be through a two-year planning process and are grateful for the support of RESCON, Toronto Deputy Mayor Ana Bailão, Councillor Joe Cressy and our very supportive neighbours, said Andrea Adam, St. Clare’s operations manager.

“I applaud the hard work and vision of St. Clare’s to make this innovative project a reality,” said Bailão, chairwoman of Toronto’s affordable housing committee. “St. Clare’s is a model that works. Their partnership-based approach has created new opportunities for those seeking a safe, clean, affordable place to call home.”

“Ensuring access to safe and affordable housing for all our friends and neighbours is critical,” Cressy added. “We have a housing crisis in our city, and the new affordable homes at 25 Leonard Avenue are a crucial and welcome addition to our community.”

According to Michele McMaster, affordable housing consultant of the Canada Mortgage and Housing Corporation, “CMHC has investigated St. Clare’s operating model and found it to be replicable and scalable. We are delighted that St. Clare’s is inspiring private developers, and we hope to encourage more in the future.”

“We chose to support this project because we believe the construction industry should give back. St. Clare,s is a caring and effective organization that we respect, and we know that they have the right leadership to steer this project to success, said RESCON chairman emeritus Phil Rubinoff.

This latest intensification of the site follows the award-winning 2006 addition of 26 apartments to the roof of the building at 25 Leonard.

St. Claire’s is a charitable foundation and landlord responsible for 413 rental units in five buildings across Toronto to help get the homeless and hard-to-house into their own home to give them privacy and dignity.

RESCON is the non-profit association that represents more than 200 of Ontario’s residential builders. Its members build highrise, midrise and lowrise homes, including rental apartments and social housing.

stclares.ca



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Home Realty : What To Expect From GTA Real Estate in 2017

Latest News


Home Realty : What To Expect From GTA Real Estate in 2017

A buoyant market showing no signs of slowing down.

With the New Year upon us, market watchers and real estate players alike are wondering what 2017 holds in store.

Here at In2ition, we see the market continuing to gather momentum this year. While it might not see as strong a performance as it did in 2016, rest assured that 2017 will be well above a normal year for GTA real estate, with double-digit price increases to be expected in some areas.

That’s a daunting prospect, given the average resale home in the Toronto area cost $776,684 in November, up from $632,774 the same month last year, according to the Toronto Real Estate Board (TREB).

All the classic supply and demand factors will continue to be in play across the region in 2017.

There will be more than 300,000 immigrants coming to Canada this year, and a third of them will settle in the Greater Golden Horseshoe Area. Many will bring money to buy real estate, and others will fall into the five- to six-year cycle, which is when the average renter becomes a homeowner. Either way, they’ll have to live somewhere, and that’ll mean ceaseless demand for real estate.

At the same time, we anticipate less new home construction in 2017, primarily due to government-related strangulation of the land approval and development processes. The resulting lack of lowrise home supply will push more buyers toward highrise condos or townhouses, which will lead to significant price hikes in both these segments.

Townhouses are now the most coveted product on the market in all forms — from stacked to back-to-backs to traditional row houses. Townhouses are replacing detached homes when it comes to ground-related housing due to both a lack of supply of traditional detached homes and how unaffordable these homes have become.

And as more young families forego the idea of owning a proper house — the price of a new detached home in Toronto rose 32 per cent year-over-year in November to $1.35 million, and in the 905 the average price was $957,517 — there is growing demand for larger condominium units. At the end of 2016, the sale of two- and three-bedroom units represented 44 per cent of the condo market activity, up nearly 10 per cent over the previous year, while the sale of one-bedroom units represented 28 per cent, down 11 per cent year- over- year. We see this trend continuing. People are also willing to commute farther to work in order to catch the wave of lowrise affordability. They’re moving to communities like East and West Gwillimbury, Dundalk, Brantford, Binbrook and Breslau in search of viable options.

The recent interest rate hike in the United States will likely result in our rates going up over the next year. Hopefully not too drastically, though. A study from Canada Mortgage and Housing Corporation (CMHC) showed that a sudden rise in interest rates — a one percentage point increase this year and 1.4 per cent next year — could cause prices to plummet by as much as 30 per cent nationally.)

The federal government will continue in 2017 with the implementation of policies aimed at slowing down white hot housing markets, namely Toronto. But the Ontario government is giving first-time homebuyers a bit of a break, offering first timers a land transfer tax rebate of up to $4,000. It means first time buyers will not pay the tax on the first $368,000 of the cost of their homes. For many — those not located in the GTA at least — it could mean no land transfer tax on the purchase of their first home.

All of this bodes well for real estate in the year ahead. Indeed, as we peer into our crystal ball for 2017, we see a buoyant market that shows no signs of slowling down.

Debbie Cosic is CEO and founder of In2ition Realty (in2ition.ca), an award-winning brokerage that focuses on sales, marketing and merchandising of new home & condominium developments throughout North America. Cosic has been recognized multiple times as the Marketing Person of the Year by both BILD and NAHB.

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CMHC

Rising GTA house prices spreads to surrounding centres

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Rising GTA house prices spreads to surrounding centres

by Canada Mortgage and Housing Corporation

Highlights

  • Recent GTA house prices have increased disproportionately compared to other CMAs.
  • Increasing single-family home prices in the GTA are motivating buyers to purchase more affordable homes in nearby CMAs, driving up prices in those centres. In particular, historical house price spill overs from the GTA were prevalent in Hamilton, Barrie and Guelph.
  • Recent house price spill overs appear to have been occurring a bit farther out, especially in St. Catharines-Niagara, driven by GTA lowrise home prices.

The Greater Toronto Area (GTA) MLS average price in the third quarter of 2016 increased by 18 per cent compared to the same quarter in 2015. Market participants suggest that recent price increases are causing buyers to purchase more affordable properties in nearby Census Metropolitan Areas (CMAs), and that prices in these nearby CMAs would be pressured up as a result.

This report examines whether increases in GTA house prices have historically spilled over into Ontario’s other CMAs, especially those surrounding the GTA. We also provide the impact that a shock to GTA house prices might have on surrounding CMA house prices, in light of house price overvaluation in the GTA and house price spill overs from the GTA to surrounding CMAs.

Recent GTA house prices have increased disproportionately compared to other CMAs.

Except for the clear but short decline in many centres in 2008, house prices have steadily increased in most Ontario CMAs over the past 20 years, with even higher growth rates in the last five years. Overall, this substantial increase was due mainly to favourable economic conditions, population growth and relatively low mortgage rates, which increased demand for housing and drove up prices. However, more recently, moderate or elevated evidence of overvaluation was detected in Hamilton and the GTA by CMHC’s Housing Market Assessment framework, indicating that some of the price appreciation was not driven by fundamental factors.

Indeed, since the 2008-09 recession, the average GTA house price has been increasing at a faster rate and has also been increasing disproportionately compared to other Ontario CMAs. This trend is reflected in Figure 2, which shows the ratio of the GTA average price to the GTA expected price based on the average price across Ontario CMAs. Since the first quarter of 2016, the GTA average price increase has exceeded by about 30 per cent the GTA expected price increase. The previous historical peak was 26 per cent in the first quarter of 1989. Recent house price growth in the GTA has therefore been at its highest level relative to Ontario CMAs.

Read the full report.


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CMHC

CMHC to increase mortgage insurance premiums

Latest News


CMHC to increase mortgage insurance premiums

CMHC is increasing its homeowner mortgage loan insurance premiums effective March 17, 2017. For the average CMHC-insured homebuyer, the higher premium will result in an increase of approximately $5 to their monthly mortgage payment.

“We do not expect the higher premiums to have a significant impact on the ability of Canadians to buy a home,” said Steven Mennill, senior vice president, insurance. “Overall, the changes will preserve competition in the mortgage loan insurance industry and contribute to financial stability.”

Capital requirements are an important factor in determining mortgage insurance premiums. The changes reflect OSFI’s new capital requirements that came into effect on January 1 of this year that require mortgage insurers to hold additional capital. Capital holdings create a buffer against potential losses, helping to ensure the long-term stability of the financial system.

During the first nine months of 2016:

  • The average CMHC-insured loan was approximately $245,000.
  • The average down payment was approximately 8 per cent.
  • The average gross debt service ratio (GDS) was 25.6 per cent. To qualify for CMHC insurance, a homebuyer’s GDS should not exceed 32 per cent of their total monthly household income.

Down payment between 5% and 9.99%

Loan Amount

$150,000

$250,000

$350,000

$450,000

$550,000

$850,000

Increase to Monthly Mortgage Payment

$2.82

$4.70

$6.59

$8.47

$10.35

$15.98

Based on a 5 year term @ 2.94% and a 25 year amortization

*Premiums in Manitoba, Ontario and Quebec are subject to provincial sales tax — the sales tax cannot be added to the loan amount.

Premiums are calculated based on the loan-to-value ratio of the mortgage being insured. The premium can be paid in a single lump sum but more frequently is added to the mortgage principal and repaid over the life of the mortgage as part of regular mortgage payments.

CMHC regularly reviews its premiums and sets them at a level to cover related claims and expenses while also reflecting the regulatory capital requirements.

CMHC is Canada’s most experienced mortgage loan insurer. Its mortgage loan insurance enables Canadians to buy a home with a minimum down payment starting at 5 per cent. As a Crown corporation, CMHC is the only mortgage insurer whose proceeds benefit all Canadians.

As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need and offers objective housing research and information to Canadian governments, consumers and the housing industry.

Backgrounder

CMHC’s standard mortgage loan insurance premiums will be changing as follows:

Loan-to-Value Ratio

Standard Premium (Current)

Standard Premium (Effective March 17, 2017)

Up to and including 65%

0.60%

0.60%

Up to and including 75%

0.75%

1.70%

Up to and including 80%

1.25%

2.40%

Up to and including 85%

1.80%

2.80%

Up to and including 90%

2.40%

3.10%

Up to and including 95%

3.60%

4.00%

90.01% to 95% – Non-Traditional Down Payment

3.85%

4.50%

Down payment between 10% and 14.99%

Loan Amount

$150,000

$250,000

$350,000

$450,000

$550,000

$850,000

Increase to Monthly Mortgage Payment

$4.94

$8.23

$11.52

$14.81

$18.10

$27.98

Based on a 5 year term @ 2.94% and a 25 year amortization

Down payment between 15% and 19.99%

Loan Amount

$150,000

$250,000

$350,000

$450,000

$550,000

$850,000

Increase to Monthly Mortgage Payment

$7.06

$11.75

$16.46

$21.16

$25.86

$39.96

Based on a 5-year term @ 2.94% and a 25 year amortization

During the first nine months of 2016:

  • Nearly 50 per cent of CMHC’s transactional mortgage loan business were for loans of less than $300,000.
  • Nearly 95 per cent of CMHC’s transactional mortgage loan business were for loans of less than $600,000.
  • Less than 1 per cent of CMHC’s transactional mortgage loan business were for loans of more than $850,000.

CMHC follows OSFI guidelines for federally regulated mortgage insurers in Canada.

Calculating the gross debt service ratio (GDS) allows potential homebuyers to estimate the maximum home-related expenses they can afford to pay each month.

GDS = Principal + Interest* + Property Tax + Heat
Monthly Income

*Interest is calculated using the qualifying rate

Mortgage loan insurance helps protect lenders against mortgage default and enables consumers to purchase homes with a minimum down payment of 5 per cent with interest rates comparable to those with a 20 per cent down payment. Mortgage loan insurance is typically required by lenders when homebuyers make a down payment of less than 20 per cent of the purchase price.

CMHC’s new premium rates will be effective for new mortgage loan insurance requests submitted on or after March 17, 2017. The current mortgage loan insurance premiums will apply for applications submitted to CMHC prior to this date, regardless of the closing date. As is normal practice, complete borrower and property details must be submitted to CMHC when requesting mortgage loan insurance.

The changes do not impact mortgages currently insured by CMHC.

https://www.cmhc-schl.gc.ca/en/corp/nero/nere/2017/2017-01-17-0830.cfm


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Canada’s largest private mortgage default insurer is matching CMHC’s premium hikes

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Canada’s largest private mortgage default insurer is matching CMHC’s premium hikes

Financial Post

It took Canada’s second largest mortgage insurer about 12 hours to match premium hikes to mortgage default insurance announced January 17 by Canada Mortgage and Housing Corp, the Crown corporation that controls a majority of the market.

Genworth Canada said January 17 that it would be increasing its transactional mortgage insurance premium rates for homebuyers, essentially duplicating the increases brought in by CMHC. The increase in premiums depends on the down payment — they are rising more dramatically for loans with higher down payments — but the premium for consumers with a loan-to-value ratio up to and including 95 per cent, will rise to four per cent from the current 3.6 per cent on March 17 for both companies.

http://business.financialpost.com/personal-finance/mortgages-real-estate/largest-private-mortgage-default-insurer-is-matching-cmhc-premium-hikes

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