Tag Archives: CREA

2018 web

5 things we can learn from real estate in 2018

Latest News


5 things we can learn from real estate in 2018

2018 web

With much of 2018 in the rear-view mirror, It’s been quite the year for the housing market in the GTA and elsewhere in Ontario. From sales and price fluctuations to supply concerns to rising housing costs. As 2019 approaches, here are five things we can learn from real estate in 2018.

 

1 Get used to the affordability issue

Get used to affordability challenges, especially in the GTA. This oft-cited issue is not going away any time soon, despite lobbying from the likes of the Building Industry and Land Development Association (BILD) and the Toronto Real Estate Board (TREB).

Key economic fundamentals such as population and employment growth will continue to drive housing market demand. Over the next decade, almost 700,000 first-time buyers will target the GTA or Hamilton markets, according to a report from the Ontario Real Estate Association. Meanwhile, the supply of new homes is not yet being addressed, which contributes to rising prices.

With recent interest rate hikes and other changes, sales and prices in the GTA saw some moderation in 2018. But this will be short-lived, and a return to price growth is expected.

 

2 Increased government involvement – finally

Government lobbying by BILD and TREB seems to be paying off, in the sense that the Province is increasingly aware of the issues facing the industry – and buyers.

Buyers, you may not realize it, but you should thank BILD, TREB and other associations for that.

In late November, Ontario announced it was committing to a housing action plan “to help create more housing faster, give people more choice and bring down housing costs.”

Like anything involving government, though, this process will likely be slow moving – meaning, some of the challenges, namely increasing housing supply – will take time to be resolved.

But at least the issues are on the agenda.

One real example of this improved awareness is Ontario’s recent plan to change the 40-year-old apprenticeship system in the province – a move the home building industry says is a “game changer.”

It’s a game changer because the new one-to-one ratio, a significant change from the existing 3-to-1 ratio, will enable home builders and renovators to more easily hire and train new apprentices. Besides creating more job opportunities for trades workers, the move also helps builders and renovators operate their businesses

 

3 Fixing on interest rates

The Bank of Canada raised its overnight rate three times in 2018 – January, July and October – to where it sits now, 1.75 per cent.

Canada’s major banks, as is usually the case, responded by immediately raising their own rates.

Naturally, all of this has Canadians feeling a little uneasy.

The Conference Board of Canada’s latest Index of Consumer Confidence confirms that rising interest rates and weaker wage growth have started to take their toll on confidence. With interest charges squeezing Canadian wallets and weakening wage growth offering little reprieve, consumers have become hesitant to make major purchases and are less positive about the state of their finances.

In its latest rate announcement on Dec. 5, the Bank of Canada noted that global economic expansion is slowing, and the effects of the “oil price shock” are being monitored.

“We expect that the Bank will not move the overnight rate until the effects of the declining energy sector are known,”according to interest rate comparison website ratehub.ca. “However, the Bank makes it clear that they still plan on raising the key interest rate in 2019, likely more than once.”

This moderated stance might put downward pressure on fixed rate mortgages, however, so Canadians may see better fixed rates in the coming weeks, ratehub.ca says.

 

4 Real estate is more local than ever

It’s a simple point that escapes some consumers: Real estate is local, and in 2018, it became more local than ever.

What do we mean?

Well, the Canadian Real Estate Association (CREA), Canada Mortgage and Housing Corp. (CMHC) and other major real estate bodies are mandated to oversee the national market.

So, when CREA issues a release that says Canadian home sales are down by X per cent, or when CMHC reports the national vacancy rate is down for the second consecutive year – and major media report such headlines – people tend to worry.

It’s essential to remember, however, that when you buy a home, you don’t buy the national market. You buy one house, on one street, in one neighbourhood, in one city and region.

If you live in Ontario, why do you care that Alberta’s ongoing oil industry struggles are pulling sales and prices down in markets in that province? Or that prices in Vancouver are even less affordable than in Toronto?

Forget the national headlines. Drill down into what’s happening in your market.

And why is real estate more local then ever? Because…

 

5 Lessons from Oshawa

General Motors Canada’s November announcement that it was closing its Oshawa assembly plant sent shockwaves not just through the province but all of Canada. To be sure, the loss of at least 2,500 jobs – not to mention untold positions in related suppliers – in a community of 170,000, is going to hurt. Hurt whom, and how badly, are the only questions.

This development should serve as a stark reminder to us all – of how important it is for cities to develop diversified, modern economies. Overdependence on any one ge, singular industries leads to overexposure in the case of downturns or, in GM’s case, outright shutdowns. It hurts the local economy, which impacts employment and wage growth, which impacts the housing market.

Oshawa, thankfully in recent years, has been diversifying its economy and expanding in technology, education and other industries. It will help, but the impact of the GM closure will likely play out over many months, if not years.

These developments could push housing in Oshawa into a buyers’ market, and prospective buyers could benefit from more options and softening prices.

In new homes, builders remain undeterred, encouraged by the longer-term growth and development throughout the Durham Region. Still, some may offer incentives such as discounts or inclusions to entice qualified buyers.

 

RELATED READING

GTA moving into balanced market for 2019

GTA new home market gains further momentum in October

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

New home buying opportunities abound in Oshawa and Durham Region

Where are interest rates headed in 2019?

 

 

SHARE  

Featured Products


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


New mortgage rules will slow sales in 2018

New mortgage rules will slow sales in 2018

Latest News


New mortgage rules will slow sales in 2018

CREA updates national resale housing market forecast

(CNW) —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.

Housing market trends continue to diverge considerably among regions along four general themes: British Columbia, the Greater Golden Horseshoe (GGH), oil and natural resource dependent provinces and everywhere else.

Driven by sales trends in the GGH, Ontario home sales have rebounded from the depths reached in the summer but remain well below the peak reached earlier this year. Recently announced changes to mortgage regulations next year may be motivating some homebuyers to advance their purchase decision before the new rules come into effect in January.

Meanwhile, sales activity in British Columbia has improved. Supported by rising activity in the Fraser Valley and on Vancouver Island, sales for the province are currently running about midway between the record levels of early 2016 and the lows reached in late 2016.

In the natural resource-intensive provinces of Alberta, Saskatchewan and Newfoundland and Labrador, sales activity is still running at lower levels and supply remains ample. As a result, average prices have flattened in Alberta and eased in Saskatchewan as well as in Newfoundland and Labrador, consistent with their elevated number of months of inventory.

In Manitoba, Eastern Ontario, Quebec, New Brunswick, Nova Scotia and Prince Edward Island, sales activity has been steadily improving. Combined with shrinking supply, housing markets in these regions have firmed up and average prices have been making modest gains.

CREA’s September forecast identified further changes to mortgage rules as a key downside risk. Indeed, this risk materialized in October when tighter mortgage regulations that take effect next year were announced. Among other things, the new rules make it tougher for would-be homebuyers with more than a 20 per cent down payment to qualify for a mortgage. These low-ratio mortgages comprise the vast majority of Canadian mortgage originations.

Recent research by the Bank of Canada suggests that once they come into effect, tightened mortgage rules will reduce sales activity in housing markets across Canada, particularly in and around Toronto and Vancouver. Additionally, with some homebuyers likely advancing their purchase decision before the new rules come into effect, the pull-forward of these sales may come at the expense of sales in the first half of 2018. Meanwhile, other potential homebuyers are anticipated to stay on the sidelines as they save up a larger down payment before purchasing and contributing to a modest improvement in sales activity in the second half of 2018. Taking these factors into account has led CREA to narrow its forecast decline in sales activity in 2017 and downwardly revise its sales forecast for 2018.

The anticipated decline in Canadian sales activity in the first half of 2018 due to an erosion of housing affordability from tighter mortgage regulations may be mitigated by a number of factors. Some buyers may qualify for a smaller mortgage by purchasing a lower priced home, while others may opt to stretch the amortization period when financing their purchase.

National sales activity is projected to decline by 4 per cent to 513,900 units in 2017. The majority of the annual decline reflects weakened activity in Ontario, where sales fell sharply over the spring and summer in the wake of the province’s Fair Housing Plan that was announced in April.

The national average price is expected to reach $510,400 this year, up 4.2 per cent from 2016. In recent years, average prices have been heavily skewed by large swings in British Columbia and Ontario sales, particularly for higher-priced single-family homes.

Meanwhile, prices in Eastern Ontario, Quebec, New Brunswick, Nova Scotia and Prince Edward Island have been rising following years of steadily firming market conditions. By contrast, prices were more or less flat or eased slightly in the natural resource-intensive provinces of Alberta, Saskatchewan and Newfoundland and Labrador.

In 2018, national sales are forecast to number 486,600 units, a decline of 5.3 per cent or 27,000 fewer transactions versus 2017. This is a downward revision of about 8,500 sales from CREA’s previous forecast.

The overwhelming majority of the forecast decline in sales next year reflects an expected decline in Ontario sales, with activity anticipated to remain well below the record-levels logged in early 2017. Indeed, new mortgage rules are expected to lower 2018 sales in all provinces except Quebec and Newfoundland and Labrador.

Based on research by Altus Group, the forecast annual decline of more than 27,000 sales from 2017 to 2018 translates into a decrease of $1.1 billion in economic activity and nearly 12,000 fewer jobs.

The national average price is forecast to edge down by 1.4 per cent to $503,100 in 2018, in large part due to a record number of higher-priced home sales in and around Toronto in early 2017 that is not expected to be repeated in 2018.

New mortgage rules and further interest rate increases are expected to further hold sales in check in Greater Vancouver and the GTA. As a result, the average price is forecast to hold steady in British Columbia in 2018, while declining by 2.2 per cent in Ontario.

In an extension of current trends, average prices in 2018 are forecast to rise in Quebec, New Brunswick and Nova Scotia. However, price gains in 2018 will be restrained by in all markets by tougher mortgage qualification criteria for low-ratio mortgages that will weigh on higher-end home sales activity.

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 120,000 real estate brokers/agents and salespeople working through more than 90 real estate boards and associations.

SOURCE: Canadian Real Estate Association



SHARE  

Featured Products


GTA home sales drop in April

GTA home sales drop in April

Latest News


GTA home sales drop in April

(CNW)—According to statistics released today by The Canadian Real Estate Association (CREA), national home sales declined in April 2017.

Home sales over Canadian MLS Systems fell by 1.7 per cent in April 2017 from the all-time record set in March.

April sales were down from the previous month in close to two-thirds of all local markets, led by the Greater Toronto Area (GTA) and offset by gains in Greater Vancouver and the Fraser Valley.

Actual (not seasonally adjusted) activity was down 7.5 per cent year-over-year, with declines in close to 70 per cent of all local markets. Sales were down most in the Lower Mainland of British Columbia, where activity continues to run well below last year’s record-levels. The GTA also factored in the decline, with faded activity compared to record levels set in April last year.

“Sales in Vancouver are down from record levels in the first half of last year but the gap has started to close,” said CREA president Andrew Peck. “Meanwhile, sales are up in Calgary and Edmonton from last year’s lows and trending higher in Ottawa and Montreal. All real estate is local, and realtors remain your best source for information about sales and listings where you live or might like to.”

“Homebuyers and sellers both reacted to the recent Ontario government policy announcement aimed at cooling housing markets in and around Toronto,” said Gregory Klump, CREA’s chief economist. “The number of new listings in April spiked to record levels in the GTA, Oakville-Milton, Hamilton-Burlington and Kitchener-Waterloo, where there had been a severe supply shortage. And with only 10 days to go between the announcement and the end of the month, sales in each of these markets were down from the previous month. It suggests these housing markets have started to cool.

“Policy makers will no doubt continue to keep a close eye on the combined effect of federal and provincial measures aimed at cooling housing markets of particular concern, while avoiding further regulatory changes that risk producing collateral damage in communities where the housing market is well balanced or already favours buyers.”

The number of newly listed homes jumped 10 per cent in April 2017, led overwhelmingly by a 36 per cent increase in the GTA. Housing markets in the Greater Golden Horseshoe also saw similar percentage increases.

The jump in new listings and drop in sales eased the national sales-to-new listings ratio to 60.1 per cent in April compared to 67.3 per cent in March.

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 just over half of all local housing markets in April, mostly in British Columbia and Southwestern Ontario. The GTA downshifted into the middle of the balanced range in April, while Greater Vancouver and the Fraser Valley have returned to sellers’ market territory.

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 April 2017, up slightly from 4.1 months in March when it fell to its lowest reading in almost a decade.

Although new listings surged in the Greater Golden Horseshoe, inventories remain tight at near or below one month across the region. Ontario’s recent changes to housing policy were announced late in the month, so their full effect on the balance between supply and demand has yet to be determined.

The Aggregate Composite MLS HPI rose by 19.8 per cent year-over-year in April 2017. Price gains accelerated for all benchmark housing categories tracked by the index.

Two-storey single-family homes posted the strongest year-over-year price gains (+21.8 per cent), followed closely by townhouse/row units (+19.9 per cent), apartment units (18.8 per cent) and one-storey single-family homes (17.2 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.

After having dipped in the second half of last year, home prices in the Lower Mainland of British Columbia have been recovering, are up from levels one year ago, and are now at new heights or trending toward them (Greater Vancouver: +11.4 per cent y-o-y; Fraser Valley: +18 per cent y-o-y).

Meanwhile, benchmark home price gains remained in the 20 per cent range in Victoria and elsewhere on Vancouver Island. Price gains were in the 30 per cent range in Greater Toronto and Oakville-Milton, and ranged in the mid-20 per cent in Guelph.

By comparison, home prices eased in Calgary (-0.9 per cent y-o-y) and Saskatoon (-2.6 per cent y-o-y) and are now about 5.5 per cent below their peaks reached in 2015.

Home prices were up modestly from year-ago levels in Regina (+0.4 per cent overall, led by a 2 per cent increase in apartment prices), Ottawa (+4 per cent overall, led by a 4.9 per cent increase in two-storey single-family home prices), Greater Montreal (+3.7 per cent overall, led by a 5.5 per cent increase in prices for townhouse/row units) and Greater Moncton (+4.8 per cent overall, led by a 12.7 per cent increase in prices for townhouse/row units).

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 April 2017 was $559,317, up 10.4 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 are two of Canada’s most active and expensive housing markets. Excluding these two markets from calculations trims more than $150,000 from the average price.

MLS Systems are co-operative marketing systems used only by Canada’s real estate boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 120,000 realtors working through some 90 real estate boards and associations.

Further information can be found at http://crea.ca/statistics.


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


Latest-News228-x-170

A ROUNDUP OF THE WEEK’S HEADLINES

Latest News


A ROUNDUP OF THE WEEK’S HEADLINES

Toronto’s housing market may need a Vancouver-style cooling: RBC

The Globe and Mail
Toronto may need to consider Vancouver-style measures to address a “dangerous mix” of factors that are fuelling the region’s overheated housing market, the chief executive of Canada’s largest bank warned on Friday (Feb. 24).
In an interview, Royal Bank of Canada CEO Dave McKay said he has grown increasingly concerned about the country’s largest housing market, where average detached-home prices have soared more than 26 per cent in the past year, while condo prices have jumped more than 14.5 per cent.
http://www.theglobeandmail.com/real-estate/the-market/torontos-housing-market-may-need-a-vancouver-style-cooldown-rbc/article34133220/


Builders’ and agents’ suggestions on improving access to home ownership in GTA

Mortgage Broker News

Grim predictions from the Toronto Real Estate Board and the Building Industry and Land Development Association pointed to an even more difficult year ahead for first-time buyers, amid growing purchase costs and ever-declining supply.
TREB recently forecast that the average price of a home in the GTA will see double-digit percentage growth in 2017, up to an average of $825,000. Coupled with BILD figures noting that only 13,670 new homes were for sale in the GTA as of December (compared to 30,400 a decade ago), think tanks and industry players are stressing that homeownership in the region is an increasingly unlikely prospect.
http://www.mortgagebrokernews.ca/news/builders-and-agents-suggestions-on-improving-access-to-home-ownership-in-gta-221677.aspx


Homeownership a wise goal for all Canadians

Real Estate News Exchange

Over the past few years, demographics regarding homeownership in Canada have changed, especially for those entering the marketplace – largely because of rising home prices. The great news is that first-time buyers are still finding ways to become owners, just a little later in life.
A BMO study from 2013 indicated the average first-time homebuyer was approximately 29 years of age. Reasons for this changing life cycle vary, from people postponing marrying and having children until later in life, to needing longer time periods to save for down payments.
https://renx.ca/homeownership-wise-goal-canadians/


Eight in 10 millennials intend to buy in five years

Canadian Mortgage Trends
About a third (34 per cent) of millennials (Canadians born in the 1980s and ’90s) are homeowners, finds a new HSBC survey.
Of those who don’t own, 82 per cent plan to buy in the next five years. But there’s a minor problem: 70% of them haven’t saved enough for a down payment.
https://www.canadianmortgagetrends.com/canadian_mortgage_trends/2017/02/8-in-10-millennials-will-buy-in-5-years.html


This is the danger of helping your Gen Y kids buy a house

The Globe and Mail

When you look at house prices in markets like Toronto, Vancouver and the surrounding areas, you have to wonder about the extent to which parents are helping their adult kids save a down payment. Now, we have an indication. A recent survey by the international bank HSBC found that 37 per cent of millennial homebuyers got some financial help from parents.
Here’s why that’s a bad idea in some cases. According to the HSBC survey, 21 per cent of millennials who recently bought a house borrowed from family after buying to cover unexpected costs. See what you’re doing, parents? You’re helping your kids into a financial obligation they may not be ready to take on.
http://www.theglobeandmail.com/globe-investor/personal-finance/genymoney/this-is-the-danger-of-helping-your-gen-y-kids-buy-a-house/article34158644/?cmpid=rss1


Expect a cautious federal budget as Liberals brace for the Trump effect

The Globe and Mail

Expect this year’s federal budget to have a big helping of cautious wait-and-see – in case next year’s requires a response to what Donald Trump is doing south of the border.
The new U.S. president has promised major tax cuts that could eventually have an impact on Canada, and his administration is starting to outline some of its budget plans.
http://www.theglobeandmail.com/news/politics/globe-politics-insider/expect-this-years-federal-budget-to-hold-off-on-the-trump-reaction/article34169286/?cmpid=rss1


Toronto’s home prices in line with other world cities

Toronto Star
Bubble. What bubble?
Toronto’s soaring home prices are in line with the reality of other world cities such as New York, Hong Kong and London, says Mark Renzoni, president of global commercial real estate giant CBRE.
“The market is fairly balanced. It’s not being driven by foreign capital. It’s being driven by Canadians, moving up, buying for the first time,” he told the Star, following a speech at CBRE’s annual market forecast event.
“There’s great jobs, there’s a sense of optimism, there’s confidence in the job market and interest rates are low,” said Renzoni, who suggested that concerns about foreign speculation in the Toronto housing market are overblown.
https://www.thestar.com/business/real_estate/2017/02/28/torontos-home-prices-in-line-with-other-world-cities.html


Ottawa keeps wary eye on home prices in Toronto, Vancouver

The Globe and Mail

Finance Minister Bill Morneau says rising home prices in Toronto and Vancouver are supported by low unemployment and higher incomes, but acknowledged the government remains “very focused” on monitoring the Canadian housing market.
The minister’s comments come as some Bay Street leaders are expressing growing concern over the Toronto housing market in particular.
http://www.theglobeandmail.com/news/politics/ottawa-keeps-wary-eye-on-home-prices-in-toronto-vancouver/article34169163/?cmpid=rss1


How to buy a home the right way, according to CMHC

CBC News

Canada Mortgage and Housing Corporation, has updated its free guide to the process of buying a home, with an emphasis on encouraging Canadians to think long term about what kind of home they should buy — or whether they would be better off renting.
The national housing agency first released the guide, called Homebuying Step by Step, in 1998, but has updated it over the years. The latest version streamlines the document, splitting off workbook content and making it available online as a series of interactive printable checklists and questionnaires.
http://www.cbc.ca/news/business/cmhc-homebuyers-guide-update-1.4002973


No fixed zddress: A first-time renter’s guide to rental numbers in Toronto

CBC News

Renting in Toronto, quite frankly, is tough.
Trying to find a place to rent? You can wind up shell-shocked over what a one-bedroom will cost you these days.
But take solace: everyone else is trying to navigate renting in Toronto, too. In fact, there is a whole group of us on Facebook here. Join, discuss and vent.
http://www.cbc.ca/news/canada/toronto/renting-in-toronto-cheat-sheet-1.3995904


Tim Hudak talks millennials, headlines, and what he misses about politics (actually, not much)

Toronto Storeys

Tim Hudak must love the heat, because the man can’t seem to get out of the kitchen. After 21 years in politics, he’s stepped into real estate — as new CEO of the Ontario Real Estate Association (OREA) — during a GTA-wide shortage of housing supply and subsequently spiking prices, which has left a generation of southern Ontarians struggling to enter the market. The former leader of the Progressive Conservative Party of Ontario is working with municipal and provincial governments to improve affordability and supply, and recently chatted with Toronto Storeys about his new job. (This interview has been lightly edited.)
http://torontostoreys.com/2017/02/tim-hudak-talks-millennials-why-headlines-are-misleading-and-what-he-misses-about-politics-actually-not-much/


Protecting purchase history data: What would virtual office websites do with it?

Real Estate Magazine

The issue of permitting virtual office websites (VOWs) to publicly display sold data – a property’s purchase history – is still before the courts, a years-long litigation between the Toronto Real Estate Board, CREA and the federal competition bureau. But with finality possibly in sight, just what would VOWs do with the disputed data that TREB argues would compromise privacy if made public?
Canada’s largest real estate board believes publicly displaying sold data impinges upon customers’ right to privacy, although its sales agents are authorized to share it member-to-member and with clients in person, by fax or email. Yet, some VOW operators contend it is in consumers’ best interest to have as much information as they can to make informed purchasing decisions.
http://www.remonline.com/protecting-purchase-history-data-virtual-office-websites/


Building codes across Canada to be updated to reflect climate change

Global News

Canada’s national building codes will be changing over the next five years to adapt to the effects of climate change, officials confirmed to Global News on Monday.
The National Research Council (NRC), which sets “model codes” for building, energy, plumbing and fire, has started working on updating some (or potentially all) of those documents to reflect the fact that Canada is seeing more heavy rain, floods, high winds, snow, ice, temperature swings and all-around extreme weather.
http://globalnews.ca/news/3276145/building-codes-changes-climate-change/


Is Canada (still) experiencing one of the biggest housing bubbles in the world?

Fortress Real Developments

I think it is worthwhile to look back at past housing market opinions, forecasts and predictions to see how they turned out. How well did my fellow housing analysts and I do at assessing the market at that time? Given renewed interest in the “Canadian housing bubble” I thought I’d take a look at this blog post I wrote in August of 2013: The Other Side of the Story V – Is Canada Experiencing one of the Biggest Housing Bubbles in the World?
It is almost laughable to think that anyone thought that Canada was in a housing bubble in 2013, especially after what we witnessed in 2016, and what is going on in Toronto as we speak

https://fortressrealdevelopments.com/news/canada-still-experiencing-one-biggest-housing-bubbles-world/


Scotiabank CEO concerned about housing market corrections in Toronto, Vancouver

National Newswatch

The CEO of Scotiabank (TSX:BNS) says he’s concerned about the possibility of a housing market correction in Toronto and Vancouver.
Brian Porter, who was asked about his outlook for the Canadian mortgage market during a conference call to discuss the bank’s first-quarter results, said he’s supportive of recent government changes introduced to reel in house price growth.
“Trees don’t grow to the sky and markets will correct at some stage here,” Porter told analysts Tuesday (Feb. 28) after the bank reported net income of $1.49 billion during the first quarter of the year.
http://www.nationalnewswatch.com/2017/02/28/scotiabank-ceo-concerned-about-housing-market-corrections-in-toronto-vancouver-2/#.WLgwzRLyuV5


 

SHARE  

Featured Products


cbc_news_housing_prices_jan2017_fi

Average house in Canada worth $470,661 in December, up 3.5% in 2016 CBC News

Latest News


Average house in Canada worth $470,661 in December, up 3.5% in 2016 CBC News

The average price of a Canadian home continues to move higher, but there are signs of a slowdown, according to figures from the Canadian Real Estate Association.

CREA said Monday (January 16) that the average sales price in December was $470,661 — 3.5 per cent higher than the same month a year earlier.

http://www.cbc.ca/news/business/crea-monthly-house-price-december-2016-1.3937296

SHARE  

Featured Products