Tag Archives: Canadian Real Estate Association

Oshawa

What the GM plant closure means for Oshawa’s economy and housing market

Latest News


What the GM plant closure means for Oshawa’s economy and housing market

Oshawa

General Motors Canada has confirmed that it plans to close all assembly operations in Oshawa, Ont. after next year, leaving the community reeling with concern for the local economy and housing market.

And with good reason.

Auto manufacturing in the city of about 170,000 dates back as far as 1907, and the plant is still a major employer. It employs about 2,500 hourly and 400 salaried workers, with many more engineers working at GM’s adjacent Regional Engineering Centre.

Oshawa Mayor John Henry has said the closure would have ripple effects well beyond the city, hurting businesses and families throughout the Durham Region.

“From a personal finance perspective, this news is devastating for the people of Oshawa,” says Rubina Ahmed-Haq, personal finance expert. “Not only the ones whose jobs will be affected and have the obvious financial impact of losing a steady income. But, also those who depend on those workers to run their businesses – everything from restaurants to dry cleaners to places of interest around the area will be impacted. As well as property values, which are already much lower in Oshawa compared to other parts of the GTA, will take a further hit.”

Durham Region home prices

Illustrating Ahmed-Haq’s point, home prices in the Durham Region have already been feeling the pinch.

 

Historical average home prices, Durham Region
2018: $591,739 (as of October)
2017: 624,225
2016: $528,475
2015: $439,842
2014: $388,610
2013: $354,548

Source: Canadian Real Estate Association

 

Values continued to decrease during the third quarter of 2018, according to the latest Royal LePage House Price Survey. Over the three-month period, the aggregate home price in Oshawa and Ajax decreased 2.8 per cent and six per cent year-over-year to $538,757 and $664,640, respectively. Home values in Pickering also depreciated when compared to the same time last year by 4.4 per cent to $709,260, and the aggregate price in Whitby decreased 3.5 per cent to $677,243.

Oshawa median home prices

Standard two-storey homes
Q3 2018 $557,071
Q3 2017 $576,922
Q/Q % change 0.8
Yr/yr % change -3.4

Detached bungalows
Q3 2018 $512,001
Q3 2017 $517,237
Q/Q % change 2.3
Yr/yr % change -1.2

Standard condos
Q3 2018 $278,224
Q3 2017 $281,864
Q/Q % change 0.3
Yr/yr % change -1.3

Aggregate
Q3 2018 $538,757
Q3 2017 $554,070
Q/Q % change 1.2
Yr/yr % change -2.8

Source: Royal LePage National House Price Composite, October 2018

 

What we can expect in the housing market

“After an announcement such as this, we often witness an immediate softening of purchase demand in the city and its surrounds, while the shock and reality of the situation settles in,” Don R. Campbell, real estate expert and author told HOMES Publishing. “This slowdown doesn’t hit the stats immediately, as there are a lot of deals that are already in the process of closing in the next couple of months. However, come February, the numbers begin to reflect the new reality. That is phase one.

“Phase two is when average sale prices begin to fall, as confidence in the market begins to slip further. In other scenarios, it is just a sign of a move ‘down-market’ or to lower priced properties. However, in today’s world, the existing ‘stress-test’ will be combined with this lack of confidence to exacerbate the normal situation.”

A third phase may follow eight months to a year after the actual closure, when EI benefits begin to run to the end of their course, confidence in the potential return of the GM jobs begins to fade and families have to start making big decisions of relocation to find new appropriate jobs.

“In other words,” Campbell says, “the announcement of and the subsequent closing of the plant kicks off a predictable but sad ripple effect that will last for years.”

If there is one potential saving grace in this news, it’s that Oshawa and the surrounding area has a more diverse economy than in the past, which will help slightly buffer the pain, says Campbell.

“However, the pain is coming and it is real and far reaching.”

The Oshawa plant is not the only facility to be affected by GM’s decision to “accelerate its transformation for the future.” Two locations in the Detroit area are also scheduled to be shut down, which could have spillover affects in related industries across the border in the Windsor, Ont. area.

RELATED READING

Oshawa housing to move into buyers’ market thanks to GM closure

New home buying opportunities abound in Oshawa and Durham Region

Focus on Whitby and Oshawa

6 Ontario municipal elections to watch regarding housing

 

SHARE  

Featured Products


Toronto

6 Ontario municipal elections to watch regarding housing

Latest News


6 Ontario municipal elections to watch regarding housing

Toronto

By Wayne Karl

The countdown is on – just days to go to the 2018 Ontario municipal elections. In Toronto, in what’s shaping up to be a two-horse race between Mayor John Tory and challenger Jennifer Keesmaat, housing is one of the key issues.

But it’s not the only city or town in and around the GTA where real estate development is a hot topic.

Here’s a select list of a few more municipal elections to watch, and we might as well start with the biggest and highest profile municipality:

TORONTO

Incumbent: John Tory
Challenger: Jennifer Keesmaat
What’s at stake: Housing affordability, or the lack thereof. Both Tory and Keesmaat have announced plans to address the growing affordability issue in the city – what some describe as a crisis. Keesmaat wants to build 100,000 units of “truly affordable, high-quality housing in the next 10 years.” This is a plan some sources in the industry have already declared as doomed to fail.

Tory proposes to build 40,000 affordable rental units over 12 years, or roughly 3,300 annually.

The challenge for both? Defining what affordable housing even is, in a city with median home prices of $883,892, andthe most expensive average one-bedroom rent in the country, $1,900 per month.

Home builders have been lobbying the City and the Province to address land supply and other policies which complicate this already complex issue.

 

MARKHAM

Markham

Incumbent: Frank Scarpitti
Challenger(s): Steven Chen, Shan Hua Lu, Abdul Rahman Malik, Jawed Syed
What’s at stake: As the fourth most populous community in the GTA after Toronto, Mississauga and Brampton, Markham has been a hotbed for economic growth and development for years. It has also become one the most expensive housing markets, with median home prices of almost $1 million for the third quarter of 2018, according to Royal LePageAnd Scarpitti, first elected in 2006 and known as developer- and builder- friendly, has been there through much of it.

 

BRAMPTON

Brampton

Incumbent: Linda Jeffrey
Challenger(s): Mansoor Ameersulthan, former Ontario PC Party leader Patrick Brown, Baljit Gosal, Wesley Jackson, Vinod Kumar Mahesan, John Sprovieri
What’s at stake: Brampton is booming, and Jeffrey is seeking a second term after winning the 2014 election with almost 50 per cent of the vote.

Vision 2040 is an ambitious long-term plan to reinvent Brampton, and includes transformations such as model new neighbourhoods connected by an expanding transit network, new core loop, walking and cycling networks, communities designed to promote walking, and a new eco-park and sustainability built into everything.

There’s also a significant education infrastructure project that will bring a new Ryerson University campus, with Sheridan College as an academic partner, to downtown Brampton for 2022. Oh, along with thousands of students.

 

ORANGEVILLE

Orangeville

Incumbent: Jeremy Williams
Challenger(s): Sandy Brown, Darrin Davidson
What’s at stake: Been to Orangeville lately? It’s no longer a sleepy little pit-stop town as you drive north to Collingwood or Georgian Bay.

With new home and community development taking place, particularly in the west part of town, the biggest challenge Orangeville faces is urbanization. Williams wants to preserve the small town feel and welcome development, while avoiding becoming a discount housing destination for people moving north out of the Toronto area.

Brown, a local realtor, likely understands the issues, and wants to “arrest out of control spending.”  He says Orangeville residents pay the highest property taxes in the GTA.

 

OSHAWA

Oshawa

Incumbent: Current mayor of Oshawa John Henry has given up his seat to run as Durham’s regional chair
Challenger(s): Kenneth Carruthers, Dan Carter, Joe Ingino, Adam Kunz, Sara Lear, Rosaldo Russo, Bob Rutherford
What’s at stake: In short, continued growth in population and economic diversity, which drive housing demand. Oshawa’s population grew to 379,848 in 2016, according to the 2016 Census, up 6.6 per cent from 2011. This is second in the entire province only to Guelph – and even ahead of Toronto at 6.2 per cent.

Oshawa is expected to boast one of the fastest growing economies in the province this year, with growth of 2.6 per cent, according to the Conference Board of Canada. And this is down from 3.2 per cent in each of the last two years.

In terms of housing development, several builders are active in the area with lowrise homes. Homebuyers are liking the comparative bargains and the proximity to Toronto.

 

BARRIE

Barrie

Incumbent: Jeff Lehman
Challenger: Ram Faerber
What’s at stake: Lehman is seeking his third term, while local businessman Faerber is looking to unseat him.

Barrie ceased being a weekend destination years ago, and has become a favourite among real estate investors for its population growth and the job opportunities that come with a growing and increasingly diverse local economy.

However, as a smaller centre (population of 197,059,up 5.4 per cent from 2011), Barrie is sometimes subject to market swings. Median home prices slipped five per cent for the third quarter of 2018, from the same period last year, to $505,136. Some shorter-term good news, however, is that prices are up 0.4 per cent from the second quarter of this year.

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

RELATED READING

Keesmaat’s 100,000 housing plan doomed to fail

5 steps to solving the housing affordability issue in Ontario

Housing policies must focus on supply

 

 

SHARE  

Featured Products


GGH

National home sales down slightly but Greater Golden Horseshoe prices holding their own

Latest News


National home sales down slightly but Greater Golden Horseshoe prices holding their own

GGH

National home sales edged down 0.4 per cent between August and September, the first decline since April, according to the Canadian Real Estate Association (CREA). While sales activity is still somewhat stronger compared to the first half of the year, it remains well below most other months since 2014.

Sales declined from August to September in slightly more than half of all local markets, led by Vancouver Island and Edmonton, along with several markets in Ontario’s Greater Golden Horseshoe (GGH) region. Activity declines in these markets were offset by monthly gains in the Fraser Valley and Montreal.

About 70 per cent of local markets were down on a year-over-year basis, led primarily by declines in major urban centres in British Columbia, along with Calgary, Edmonton and Winnipeg.

MORTGAGE STRESS TEST

“The balance between the number of homebuyers and suitable homes varies depending on location, housing type and price range,” says CREA President Barb Sukkau. “Differences in market balance will likely come into sharper focus as interest rates rise and cause this year’s new mortgage stress test to become even more restrictive.”

The number of newly listed homes rose three per cent between August and September, led by the Lower Mainland and the GTA. More than half of all local markets posted a monthly increase in new listings.

“Sales activity may get all the press, but it’s the balance between that and the number of homes for sale that sets the tone for pricing environment,” says Gregory Klump, CREA’s chief economist. “In markets with an abundant supply of homes and slower sales activity, buyers have the upper hand when it comes to negotiations over price. However, in places where buyers are keen to make a purchase but there’s a shortage of homes for sale, sellers are in the driver’s seat when it comes to price. It will be interesting to see how supply and demand respond to rising interest rates amid this year’s new mortgage stress-test.”

Based on a comparison of the sales-to-new listings ratio with the long-term average, about three-quarters of all local markets were in balanced market territory in September 2018.

The Aggregate Composite MLS Home Price Index (HPI) was up 2.3 per cent year-over-year in September – in line with those posted in each of the two previous months.

Condo units posted the largest year-over-year price gains in September (8.4 per cent), followed by townhomes (4.5 per cent). Meanwhile, one-storey and two-storey single-family home prices were little changed on a year-over-year basis.

REGIONAL VARIATION

Trends continue to vary widely among the 17 housing markets tracked by the HPI. Among the markets in the GGH, home prices were up from year-ago levels in Guelph (eight per cent), Hamilton-Burlington (6.1 per cent), the Niagara Region (5.9 per cent), the GTA (two per cent), and Oakville-Milton (1.4 per cent). By contrast, home prices slipped lower in Barrie and District (-3.6 per cent).

In BC, home price gains are diminishing on a year-over-year basis in Greater Vancouver (2.2 per cent), and Fraser Valley (8.5 per cent). Meanwhile, prices in Victoria were up 8.7 per cent year-over-year in September, and elsewhere Vancouver Island they climbed 13.2 per cent.

Across the Prairies, benchmark home prices remained below year-ago levels in Calgary (-2.6 per cent), Edmonton (-2.6 per cent), Regina (-4.7 per cent) and Saskatoon(-1.9 per cent).

Home prices rose by 6.9 per cent in Ottawa (led by an 7.9 per cent increase in two-storey single family home prices), by 6.1 per cent in Greater Montreal (led by a seven-per-cent increase in townhome prices) and by 3.4 per cent in Greater Moncton (led by a 10.3 per cent increase in condo prices).

The actual (not seasonally adjusted) national average price for homes sold in September 2018 was slightly less than $487,000, up just 0.2 per cent from the same month last year.

The national average price is heavily skewed by sales in the GVA and GTA, two of Canada’s most active and expensive markets. Excluding these two markets from calculations cuts almost $104,000 from the national average price, trimming it to just over $383,000.

RELATED READING

GTA housing market correction coming to an end, ReMax says

GTA new home market quiet in August

 

SHARE  

Featured Products


web_crea_mar27_fi

CREA updates and extends housing market forecast

Latest News


CREA updates and extends housing market forecast

The Canadian Real Estate Association (CREA) has updated its forecast for home sales activity via the Multiple Listing Service (MLS) Systems of Canadian real estate boards and associations in 2017 and 2018.
Canadian housing market trends continue to display considerable regional divergence. In British Columbia, activity in the Lower Mainland has cooled markedly from all-time highs recorded early last year. However, sales and price pressures elsewhere in the province remain historically strong.
In the resource-intensive provinces of Alberta, Saskatchewan, and Newfoundland and Labrador, sales activity is still running at lower levels and supply is elevated. This has resulted in weakened price trends for these provinces.
In housing markets around the Greater Toronto Area and including the furthest reaches of Ontario’s Greater Golden Horseshoe (the region includes the GTA, Hamilton-Burlington, Oakville-Milton, Guelph, Kitchener-Waterloo, Cambridge, Brantford, the Niagara Region, Barrie and nearby cottage country), the balance between supply and demand has become increasingly tight. This is expected to lead to continued double-digit price growth, resulting in further erosion in affordability and sales activity in the absence of a significant and sustained rise in new supply.
Elsewhere, housing markets in places like Manitoba, Eastern Ontario, Quebec, New Brunswick, Nova Scotia and Prince Edward Island have all experienced, to varying degrees, a breakout year in 2016 following a number of years of stagnation, with rising sales drawing down elevated supply.
Recently tightened mortgage rules, higher mortgage default insurance premiums and an expected rise in mortgage interest rates all represent headwinds to affordability in all Canadian housing markets. It will be some time before their full impact on housing markets is evident.


In some regions, the recently tightened “stress test” for mortgage financing qualification will force some first-time buyers to rethink how much home they can afford and may lead to a drop in home purchases as they shop for a lower priced home. In regions where there is a shortage of lower-priced inventory, some sales may be delayed as buyers save longer for a larger down payment.
In markets like Vancouver and Toronto, where single-family homes are in short supply and there are few affordable options, some buyers may find themselves priced out of the market entirely. In Toronto, the stress test for mortgage qualification may prompt some buyers to move further out into communities located in the Greater Golden Horseshoe where homes are more affordably priced.
Nationally, sales activity is forecast to decline by 3 per cent to 518,700 units in 2017. In line with CREA’s previous forecast, the upward revision to the sales forecast for Ontario offsets a downward revision to British Columbia’s.
British Columbia is forecast to see the largest decline in sales in 2017 (-17.5 per cent), followed by Prince Edward Island (-10.8 per cent). Activity in both provinces is retreating from all-time highs reached last year. Newfoundland and Labrador is also forecast to see a decline in sales in 2017 (-8.4 per cent ), continuing a softening trend that stretches back nearly a decade.
Alberta is forecast to have the largest increase in activity in 2017 (+5 per cent) that still leaves it nearly 10 per cent below the 10-year average.
Elsewhere, sales activity is forecast to be little changed from 2016 to 2017. Ontario sales are forecast to rise by less than 1 per cent in 2017, as strong demand runs up against an increasingly acute supply shortage.
In provinces where economic and housing market prospects are closely tied to the outlook for oil and other natural resource industries, average prices are showing tentative signs of stabilizing in Alberta while softening in Saskatchewan and Newfoundland and Labrador.
While prices are still rising rapidly in Ontario, British Columbia has seen a compositional shift in the average price that reflects softer sales activity in the Lower Mainland, which has some of the most expensive real estate in Canada.
Average prices in other provinces are either rising modestly or holding steady, reflecting well-balanced supply and demand.
The national average price is forecast to rise by 4.8 per cent to $513,500 in 2017, with significant regional variations. The average price is expected to retreat by more than 5 per cent in British Columbia as well as Newfoundland and Labrador, by 2.8 per cent in Saskatchewan while rising by more than 15 per cent in Ontario.
In other provinces where average price last year began showing tentative signs of improving, average price gains are forecast to hold below the rate of inflation in 2017 as the impact of recent regulatory changes and higher expected mortgage rates lean against stronger demand and tighter market conditions.
In 2018, national sales are forecast to number 513,400 units, representing a decline of 1 per cent compared to the 2017 forecast. Most of the annual decline is the expected result from fewer sales in Ontario.
The national average price is forecast to rise by 5 per cent to $539,400 in 2018, reflecting ongoing market tightness in Ontario and a further return to more normal levels in British Columbia. Price gains outside of the Greater Golden Horseshoe are not expected to approach the increase in the national average price.
Saskatchewan and Newfoundland and Labrador are projected to see average prices decline in 2018 by less than 1 per cent. In most other parts of Canada, home price increases are forecast to more or less track overall consumer price inflation in 2018.
http://www.crea.ca/

 

SHARE  

Featured Products


Web_CREA_Mar15_fi

Homes are selling briskly throughout the GTA: CREA

Latest News


Homes are selling briskly throughout the GTA: CREA

(CNW) — According to statistics released today by The Canadian Real Estate Association (CREA), national home sales were up on a month-over-month basis in February 2017.
Home sales over Canadian MLS Systems rose by 5.2 per cent month-over-month in February 2017 to reach the highest level since April 2016.
While February sales were up from the previous month in about 70 per cent of all local markets, the national increase was overwhelmingly driven by an increase in activity across the Greater Toronto Area (GTA) and environs.


Actual (not seasonally adjusted) activity was down 2.6 per cent from levels for the same month last year. The decline reflects a moderation in sales in the Lower Mainland of British Columbia compared to extraordinarily elevated levels recorded one year ago.
“Housing market trends continue to differ by region,” said CREA president Cliff Iverson. “Homes are selling briskly throughout the Greater Toronto Area and nearby communities. Elsewhere, competition among potential buyers is less intense, so listings take longer to sell.”
“In and around Toronto, many potential move-up buyers find themselves outbid in multiple-offer situations amid a short supply of listings,” said Gregory Klump, CREA’s chief economist. “As a result, they aren’t putting their current home on the market. It’s something of a vicious circle from the standpoint of a supply shortage and a challenge for first-time and move-up homebuyers alike.
“By contrast, housing markets in urban markets elsewhere in Canada are either balanced or are amply supplied. Because housing market conditions vary by region, further tightening of mortgage regulations aimed at cooling the housing market in one region may destabilize it elsewhere.”
The number of newly listed homes rose 4.8 per cent in February 2017, led by the GTA and nearby markets following a sharp drop in January. More than one-third of all local housing markets saw new listings recede from levels the previous month, including those in the Prairies, northern Ontario and the Atlantic region. Meanwhile, new listings in the Greater Vancouver region fell significantly from January levels, having retreated by nearly 25 per cent to reach the lowest level since 2001.
With similar monthly increases in both sales and new listings, the national sales-to-new listings ratio was 69 per cent in February, little changed from 68.7 per cent in January.
A sales-to-new listings ratio between 40 and 60 is generally consistent with balanced housing market conditions, with readings below and above this range indicating buyers’ and sellers’ markets respectively.
The ratio was above 60 per cent in almost 60 per cent of all local housing markets in February, the majority of which are located in British Columbia, in and around the GTA and across Southwestern Ontario.
The number of months of inventory is another important measure of the balance between housing supply and demand. It represents how long it would take to completely liquidate current inventories at the current rate of sales activity.
There were 4.2 months of inventory on a national basis at the end of February 2017, down from 4.5 months in January and the lowest level for this measure in almost a decade.
The imbalance between limited housing supply and robust demand in Ontario’s Greater Golden Horseshoe region is without precedent.
The number of months of inventory in February 2017 stood below one month in the GTA, Hamilton-Burlington, Oakville-Milton, Kitchener-Waterloo, Cambridge, Brantford, Guelph, Barrie & District and the Kawartha Lakes region.
The Aggregate Composite MLS HPI rose by 16 per cent year-over-yeary in February 2017. This was up from January’s gain reflecting an acceleration in home price increases, particularly for single family homes in and around Toronto.
Prices for two-storey single-family homes posted the strongest year-over-year gains (+17.9 per cent), followed closely by townhouse/row units (+16 per cent), one-storey single family homes (15 per cent) and apartment units (13.7 per cent).
While benchmark home prices were up from year-ago levels in 11 of 13 housing markets tracked by the MLS HPI, price trends continued to vary widely by location.
In the Fraser Valley and Greater Vancouver, prices are slightly off their peaks posted in August 2016. That said, home prices in these regions nonetheless remain well above year-ago levels (+21.4 per cent year-over-year and +14 per cent year-over-year respectively).
Meanwhile, benchmark prices continue to climb in Victoria and elsewhere on Vancouver Island, as well as in Greater Toronto, Oakville-Milton and Guelph. Year-over-year price gains in these five markets ranged from about 18 per cent to 30 per cent in February.
By comparison, home prices were down by 1.9 per cent year-over-year in Calgary and by 1.2 per cent year-over-year in Saskatoon. Prices in these two markets now stand 5.6 per cent and 5.1 per cent below their respective peaks reached in 2015.
Home prices were up modestly from year-ago levels in Regina (+3.5 per cent), Ottawa (+3.8 per cent), Greater Montreal (+3.3 per cent) and Greater Moncton (+1.2per cent).
The MLS Home Price Index (MLS HPI) provides the best way of gauging price trends because average price trends are prone to being strongly distorted by changes in the mix of sales activity from one month to the next.
The actual (not seasonally adjusted) national average price for homes sold in February 2017 was $519,521, up 3.5 per cent from where it stood one year earlier.
The national average price continues to be pulled upward by sales activity in Greater Vancouver and Greater Toronto, which remain two of Canada’s tightest, most active and expensive housing markets.
That said, Greater Vancouver’s share of national sales activity has diminished considerably over the past year, giving it less upward influence on the national average price. The average price is reduced by almost $150,000 to $369,728 if Greater Vancouver and Greater Toronto sales are excluded from calculations.
Further information can be found at http://crea.ca/statistics.

SHARE  

Featured Products