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New home sales

2018 GTA new home sales drop to lowest mark in nearly 20 years

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2018 GTA new home sales drop to lowest mark in nearly 20 years

New home sales

Last year saw the lowest total sales in almost 20 years in the GTA new home market, the Building Industry and Land Development Association (BILD) reports.

Overall in 2018, there were 25,161 new homes sold in the GTA, according to Altus Group, BILD’s official source for new home market intelligence, making 2018 the year with the lowest number of new home sales in the GTA since Altus Group started tracking new home data in 2000.

New record low

There were 21,330 condominium units sold in 2018, including those in low-, mid and highrise buildings, stacked townhouses and loft units – down 38 per cent from 2017 but only four per cent less than the 10-year average. Setting a record low since Altus began tracking new home data in 2000, there were only 3,831 single-family homes sold in 2018, including detached, linked and semi-detached houses and townhouses (excluding stacked townhouses). This is down 50 per cent from 2017 and down 74 per cent from the 10-year average.

“A number of factors combined to produce the drop in GTA new home sales in 2018,” says Patricia Arsenault, Altus Group’s executive vice-president, Data Solutions. “More stringent mortgage stress testing, rising interest rates and lack of single-family product affordable to a broader range of buyers all played a role. As well, the record new condo apartment sales in 2017 brought forward some demand that would otherwise have occurred in 2018.”

In December, the benchmark price for new condos was $796,815, up 11.2 per cent over the last 12 months. The benchmark price for single-family homes was $1.14 million, down 6.7 per cent over the last 12 months.

Out of balance

“From our point of view, the market is out of balance,” says David Wilkes, BILD president and CEO. “We must continue to work with all levels of government to ensure that policies don’t artificially price consumers out of the market.

“We commend the provincial government for taking action toward increasing housing supply in Ontario,” Wilkes adds. “We join other industry groups in calling on the federal government to revisit the stress test and allow a longer amortization period for first-time buyers. And we look forward to working with our municipal partners on removing barriers to development such as excessive red tape and outdated bylaws.”

At the end of December, there were 15,768 new homes available for purchase, comprised of 10,687 condominium units and 5,081 single-family homes. Remaining inventory includes units in preconstruction projects, in projects currently under construction, and in completed buildings.

 

December New Home Sales by Municipality

December 2018 Condominium apartments Single-family Total
Region 2018 2017 2016 2018 2017 2016 2018 2017 2016
Durham 40 17 50 44 15 75 84 32 125
Halton 48 163 59 21 47 93 69 210 152
Peel 108 89 130 32 11 152 140 100 282
Toronto 479 404 1,684 9 8 31 488 412 1,715
York 129 195 345 30 62 274 159 257 619
GTA 804 868 2,268 136 143 625 940 1,011 2,893

Source: Altus Group

RELATED READING

GTA new home market back to typical sales and openings levels in November

GTA among the most promising new home outlooks for 2019, Altus Group says

GTA condos lead resale price growth in 2018

 

 

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Resale Market: Homes sales fall in 2018

Resale home sales fall in 2018

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Resale home sales fall in 2018

Highlights:

  • National home sales fell 2.5 per cent from November to December.
  • Actual (not seasonally adjusted) activity was down by 19 per cent from one year ago.
  • The number of newly listed homes was little changed from November to December.
  • The MLS Home Price Index (HPI) was up 1.6 per cent year-over-year in December.
  • The national average sale price fell by 4.9 per cent year-over-year in December.

Home sales via Canadian MLS Systems fell by 2.5 per cent in December 2018 compared to November, capping the weakest annual sales since 2012. Monthly declines in activity since September have fully retrenched its summer rally and returned it near the lowest level since early 2013.

Transactions declined in about 60 per cent of all local markets in December, led by lower activity in Greater Vancouver, Vancouver Island, Ottawa, London-St. Thomas and Halifax-Dartmouth, together with a regionally diverse mix of other large and medium sized urban centres.

Actual (not seasonally adjusted) activity was down 19 per cent year-over-year in December 2018 and stood almost 12 per cent below the 10-year average for the month of December. Sales were down from year-ago levels in three-quarters of all local markets, led overwhelmingly by the Lower Mainland of British Columbia, the Okanagan Region, Calgary, Edmonton, the Greater Toronto Area and Hamilton-Burlington. This decline, in part, is due to elevated activity posted in December 2017 as homebuyers rushed to purchase in advance of the new federal mortgage stress test that came into effect on January 1, 2018.

“What a difference a year makes,” says CREA president Barb Sukkau. “Sales trends were pushed higher in December 2017 by homebuyers rushing to purchase before the new federal mortgage stress test took effect at the beginning of 2018. Since then, the stress test has weighed on sales to varying degrees in all Canadian housing markets and it will continue to do so this year.”

“The Bank of Canada recently said that it expects housing activity will stay ‘soft’ as households ‘adjust to the mortgage stress test and increases in mortgage rates,’ even as jobs and incomes continue growing,” says Gregory Klump, CREA’s chief economist. “Indeed, the bank’s economic forecast shows it expects housing will undermine economic growth this year as the mortgage stress test has pushed homeownership affordability out of reach for some home buyers,” he added.

The number of newly listed homes remained little changed (up 0.2 per cent) from November to December, with declines in close to half of all local markets offset by gains in the remainder.

With sales down and new listings steady in December, the national sales-to-new listings ratio eased to 53.3 per cent compared to 54.8 per cent in November. This measure of market balance has remained close to its long-term average of 53.5 per cent since the beginning of 2018.

Considering the degree and duration to which market balance readings are above or below their long-term averages is the best way of gauging whether local housing market conditions favour buyers or sellers. Market balance measures that are within one standard deviation of their long-term average are generally consistent with balanced market conditions.

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

The number of months of inventory is another important measure for the balance between sales and the supply of listings. It represents how long it would take to liquidate current inventories at the current rate of sales activity.

There were 5.6 months of inventory on a national basis at the end of December 2018. While this remains close to its long-term average of 5.3 months, the number of months of inventory has swollen far above its long-term average in Prairie provinces as well as in Newfoundland and Labrador. By contrast, the measure remains well below its long-term average in Ontario and Prince Edward Island. In other provinces, sales and inventory are more balanced.

The Aggregate Composite MLS Home Price Index (MLS HPI) was up 1.6 per cent year-over-year in December 2018. The increase is smaller but still broadly in line with year-over-year gains posted since July.

Apartment units posted the largest year-over-year price gains in December (4.9 per cent), followed by townhouse/row units (3.1 per cent). By comparison, two-storey single-family homes posted a small increase (0.4 per cent) while one-storey single-family home prices eased slightly (-0.3 per cent).

Trends continue to vary widely among the 17 housing markets tracked by the MLS HPI. Results were mixed in B.C. Prices are now down on a year-over-year basis in Greater Vancouver (-2.7 per cent) but remain above year-ago levels in the Fraser Valley (+2.5 per cent). Meanwhile, prices posted a year-over-year increase of 6.4 per cent in Victoria and rose 11 per cent elsewhere on Vancouver Island.

Among housing markets tracked by the index in the Greater Golden Horseshoe Area, MLS HPI benchmark home prices were up from year-ago levels in Guelph (6.8 per cent), the Niagara Region (6.8 per cent), Hamilton-Burlington (6.4 per cent ), Oakville-Milton (3.3 per cent) and the GTA (3 per cent ). Home prices in Barrie and District remain slightly below year-ago levels (-1.1 per cent).

Across the Prairies, where supply is historically elevated relative to sales, benchmark home prices remained below year-ago levels in Calgary (-3.2 per cent), Edmonton (-2 per cent), Regina (-5.2 per cent) and Saskatoon (-1.2 per cent). The home pricing environment is likely to remain weak in these housing markets until elevated supply is reduced and becomes more balanced in relation to demand.

Home prices rose 6.9 per cent year-over-year in Ottawa (led by an 8.3-per-cent increase in townhouse/row unit prices), 6 per cent in Greater Montreal (led by a 9.1-per-cent increase in townhouse/row unit prices) and 2.5 per cent in Greater Moncton (led by a 12.2-per-cent increase in townhouse/row unit prices).

The MLS HPI provides the best way to gauge price trends because average price trends are 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 December 2018 was just over $472,000, down 4.9 per cent from the same month in 2017. The year-over-year decline reflects how the jump in sales in December 2017 in advance of the stress test was more pronounced in more expensive markets. The national average price is heavily skewed by sales in Greater Vancouver and the GTA, two of Canada’s most active and expensive markets. Excluding these two markets from calculations cuts almost $100,000 from the national average price, trimming it to just under $375,000.

For more information, visit crea.ca/housing-market-stats/


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New home market

GTA new home market back to typical sales and openings levels in November

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GTA new home market back to typical sales and openings levels in November

New home market

The GTA new home market saw more typical activity levels in November, both in new home sales and new project openings, after a relatively strong October, the Building Industry and Land Development Association (BILD) reports.

There were 2,823 new homes sold in November, according to Altus Group, BILD’s official source for new-home market intelligence. Condominium apartments in low-, medium- and highrise buildings, stacked townhouses and loft units accounted for 2,454 new home sales in November, down 24 per cent from November 2017, but only sixper cent less than the 10-year average. Single-family home sales, with 369 detached, linked and semi-detached houses and townhouses (excluding stacked townhouses) sold, were up eight per cent from last November but down 71 per cent from the 10-year average.

Remaining inventory increased month over month, to 16,797 units, comprised of 11,254 condo apartment units and 5,543 single-family units. Remaining inventory includes units in preconstruction projects, in projects currently under construction, and in completed buildings.

Strong finish

“The condominium apartment market in the GTA is finishing off the year on a stronger note than it started,” says Patricia Arsenault, Altus Group’s executive vice-president, Data Solutions. “Both builders and buyers have re-engaged in stronger numbers in recent months, signalling that the downturn that followed record activity last year may be coming to an end.”

The benchmark price for both condo apartments and single-family homes increased slightly in November compared to the previous month. The benchmark price for condo apartments was $786,602, which was up 11.9 per cent over the last 12 months. The benchmark price for single-family homes was $1,150,823, down 5.9 per cent over the last 12 months.

Although the housing market continued to show signs of recovery in November, it will continue to operate below capacity until fundamental issues that are restricting supply and demand are addressed through government policy, according to David Wilkes, BILD president and CEO.

No more talk

“The time for talk is done and our region needs action now to ensure we build the more than 50,000 new homes needed annually to support the GTA’s growing population,” says Wilkes. “Our industry is encouraged by the provincial government’s commitment to unlocking supply. We will continue to call on municipal governments to expedite approvals of new developments, and on the federal government to undo the negative effects of the outdated stress test on consumers’ ability to purchase homes.”

 

November new home sales by municipality

November 2018 Condominium Apartments Single-Family Total
Region 2018 2017 2016 2018 2017 2016 2018 2017 2016
Durham 404 16 57 54 75 171 458 91 228
Halton 101 204 114 107 88 415 208 292 529
Peel 736 181 231 52 61 132 788 242 363
Toronto 1,124 2,425 2,678 17 21 110 1,141 2,446 2,788
York 89 387 317 139 97 837 228 484 1,154
GTA 2,454 3,213 3,397 369 342 1,665 2,823 3,555 5,062

 Source: Altus Group

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GTA new home market gains further momentum in October

GTA moving into balanced market for 2019

GTA new home market shows some improvement in September

 

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Forecast 2019 – where are Canada’s hottest housing markets?

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Forecast 2019 – where are Canada’s hottest housing markets?

2019 web

Wondering where Canada’s hottest housing markets are, as 2018 comes to a close and 2019 is just around the corner? Well, that all depends on who you ask.

Two of Canada’s large realty firms – Royal LePage and ReMax – both issued their 2019 housing market outlooks on Dec. 11.

Yes, the very same day.

Rather than produce two stories on the exact same topic, just from different sources, we thought it would be interesting to compare them. And while there are some commonalities in their forecasts, there are also some interesting discrepancies.

There is no ‘Canadian’ market

Let’s begin with the headline of ReMax’s 2019 Housing Market Outlook: “Canadian home prices expected to increase by 1.7 per cent in 2019.”

Yeah, about that. Forget that headline. As we recently wrote, those national numbers are pretty meaningless. It’s like trying to summarize the weather, temperature or traffic as “Canadian.”

But, just for comparison purposes, ReMax estimates Canadian home prices will grow 1.7 per cent in 2019; Royal LePage, 1.2 per cent.

National numbers that do matter are interest rates, GDP growth and employment. Then there’s immigration, which affects some markets more than others, mortgage regulations and housing supply. All of these factors are the key drivers of real estate. But more on that later.

Now let’s take a look at some of the regional highlights.

GTA

ReMax says:

  • Toronto average prices down 4% in 2018 to $789,181
  • Toronto average prices forecast to rise 2% in 2019 to $804,964

In Toronto, rising interest rates and the mortgage stress test were the two major factors affecting market activity in 2018, with average sale prices dropping by four per cent from $822,572 in 2017 to $789,181 in 2018, and unit sales down by 16 per cent. Lack of affordability in the single-detached segment will make it difficult for buyers wanting to enter this market. Resale condos, on the other hand, now represent almost 37 per cent of total sales, fueled by affordability.

ReMax Housing Market Outlook, select major markets

Region 2018

 Average Home Price

 

2019

Average Home Price

(Forecast)

Year-over-Year

(%)

Vancouver $1.05M $1.01M -3.0%
Edmonton $379,539 $360,562 -5.0%
Calgary $487,399 $487,399 0.0%
Saskatoon $333,187 $343,182 0.6%
Regina $322,500 $322,500 0.0%
Winnipeg $323,001 $335,921 4.0%
Windsor $299,750 $329,725 10.0%
London $379,654 $398,636 5.0%
Kitchener-Waterloo $473,275 $487,473 3.0%
Hamilton-Burlington $707,949 $849,538 2.0%
Barrie $477,839 $492,174 3.0%
Oakville $1.08M $1.13M 5.0%
Mississauga $705,406 $733,622 4.0%
Brampton $577,846 $600,959 4.0%
Durham $594,585 $612,422 3.0%
Toronto $789,181 $804,964 2.0%
Ottawa $678,670 $705,816 4.0%
Halifax $299,982 $308,981 3.0%
St. John’s $265,523 $265,523 0.0%

 

Elsewhere in Ontario

Rising interest rates and the stress test continue to make it difficult for prospective buyers in Barrie, Oakville and Durham regions.

“This is particularly true for first-time buyers and single Millennials, as evident in cities like Brampton, Kingston and Durham,” says Christopher Alexander, executive vice-president and regional director, ReMax of Ontario-Atlantic Canada.

Hottest in the province

The hottest market in Ontario? Windsor, which showed price growth of 13 per cent in 2018, to $299,750, with another 10 per cent increase forecast for 2019. London is also expected to be strong, with prices to increase another five per cent next year, after rising 17 per cent this year to reach $379,654.

 

Royal LePage says:

  • GTA average price in 2018 $844,000
  • GTA average price forecast to rise 1.3% to $854,552

“Compared to the record pace of home appreciation seen in 2016 and 2017, the GTA housing market is now positioned for much healthier and sustainable growth in future years,” says Chris Slightham, broker and owner, Royal LePage Signature Realty.

Many regions outside of Toronto’s core saw price declines in 2018, a result of overshooting in previous years. The continued population growth should cause the suburbs to stabilize and reignite price growth. In addition, the potential subway expansion into the suburbs should stabilize and increase home prices in close proximity to new transit infrastructure.

Elsewhere in Ontario

The median price in Ottawa is expected to increase 2.5 per cent in 2019 to $487,910, benefitting from the city’s healthy economy and high income per household, driven by the public and technology sectors.

Interestingly, Royal LePage also notes that neither the new mortgage rules nor recent interest rate hikes have notably affected Ottawa’s housing market.

 

Highlights from other Canadian markets

The star performer of all major Canadian markets in 2019? Montreal, according to Royal LePage.

“Quebec will out-perform the nation in 2019,” says President and CEO Phil Soper. “Like other regions of the country, the economy is strong and people are working. What is different is affordability. We have to remember that Montreal sat out the rapid home price inflation we saw in Vancouver and Toronto this decade, and in Calgary the decade before.”

As for the ReMax outlook for Montreal, Quebec did not participate in this year’s forecast.

 

 

Royal LePage Market Survey Forecast

Region  

2018 Aggregate Home Price
(Year End Estimate)


2019 
Aggregate
Home Price 
(Forecast)
Year-over-Year (%)
Canada $631,000 $638,257 1.2%
Greater Toronto Area $844,000 $854,552 1.3%
Greater Montreal Area $409,000 $421,306 3.0%
Greater Vancouver $1.28M $1.29M 0.6%
Ottawa $476,000 $487,910 2.5%
Calgary $484,000 $473,104 -2.3%
Edmonton $386,000 $378,691 -1.9%
Winnipeg $306,000 $309,829 1.3%
Halifax $321,000 $326,096 1.6%
Regina $327,000 $311,505 -4.7%

 

Influential factors

Now for more on those national factors that do influence real estate.

“I would call attention to two factors influencing our forecast that deserve special consideration,” says Soper. “Firstly, home prices are appreciating, albeit at a snail’s pace. Secondly, the Canadian market is supported by strong economic fundamentals, including a robust rate of new household formation and excellent employment growth.

“The future for Canadian housing remains bright, perhaps too bright. With an increasing number of gainfully employed people looking to put a roof over their heads, and the scarce availability of rental accommodation, policy makers in our major markets will once again be struggling with housing shortages. More than an affordable housing problem, we will once again be facing an overall housing supply crisis.”

As for interest rates, the Bank of Canada held its benchmark interest rate of 1.75 per cent on Dec. 5, citing a weaker than expected energy sector. Further rate increases are expected in 2019, making it more difficult for Canadians to buy a home in 2019.

The Bank forecasts GDP will increase 2.1 per cent in 2019, a modest increase over 2018, while Canada’s unemployment rate fell to 5.6 per cent in November, the lowest on record since 1976.

RELATED READING

5 things we can learn from real estate in 2018

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

GTA moving into balanced market for 2019

GTA new home market gains further momentum in October

Delays in approval process contributing to housing affordability issue in GTA

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

 

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5 things we can learn from real estate in 2018

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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?

 

 

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GTA moving into balanced market for 2019

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GTA moving into balanced market for 2019

Although the Greater Toronto Area housing market is somewhat in balanced territory, buyers and sellers are both up against the ropes.

This year has changed so much from the last five to 10 years. Both buyers and sellers have been affected in both positive and negative ways. For me, when working with a buyer and investor client, it was always a tailored approach. However, now more than ever, we have to be extremely diligent when analyzing residential types, location and price range.

In past years, it was much more common to think about flipping real estate or short-term investments. Now? Not so much. There is a total shift to a minimum five- to 10-year hold. Since the introduction of the stress test, some real estate markets took a hit. Buyers are also now faced with additional challenges such as qualification rules and rising interest rates.

Glass half full

Although there are pros and cons in today’s market, take a glass half full approach. Just think, in the past, is was very challenging for a seller to move up to a bigger property. There were bidding wars, price increases that exceeded pay raises, and to top it all off, extremely low inventory – which meant buyers might have to settle for something they might not fully love. The trade-off was a low interest rate environment. If you were a seller, it was nice to think you could sell your property for top dollar, but the million-dollar question was where will you buy next?

Also read: GTA home prices continue to rise

Also read: GTA new home market gains further momentum in October

Also read: GTA condo sales and prices hit record levels

Today, if a seller wants to move up, they can usually find a good deal and sell their property for a fair market value. Maybe your property went down 10 to 15 per cent, however, you are also buying your next home for the same 10 to 15 per cent less. Another benefit to such market conditions is that there are more deals to be had.

Notably, there have been fewer first-time buyers out there recently. Even a larger down payment might not cut it anymore, due to higher interest rates. This is why the condo market is doing well, especially the smaller and less expensive properties, due to affordability. The new reality could well be more people renting for a longer period.

Rising rates

The qualifying rate today is slightly more than six per cent. “The recent rule change with regards to the stress test basically decreased people’s max mortgage amount by about 15 to 20 per cent,” says Michael Yosher, director of lending at Integrity Tree Solutions Inc. “The 2019 horizon looks like this trend will continue, as Bank of Canada and economists are predicting several interest rate hikes, which will further reduce the amount of mortgage a buyer will qualify for. This has really taken the wind out of first-time buyers. Family members helping out with gifted down payments and cosigning mortgage loans are the trend these days.”

According to the Toronto Real Estate Board, in October 2018 compared to last year October, average sales prices were up 3.5 per cent. Although this is good news for some sellers, most of this price growth is driven by the condominium market, which at one point lagged behind detached, semi-detached and townhouse product.

Arie Buzilo is a real estate broker with Century 21 Leading Edge Realty Inc. Brokerage, and an investor specializing in buying and selling properties in the GTA.

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GTA home prices continue to rise

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GTA home prices continue to rise

Toronto homes web

Greater Toronto Area average home prices continued their upward trajectory in November, rising 3.5 per cent year-over-year to $788,345, according to the Toronto Real Estate Board (TREB).

GTA realtors report 6,251 residential transactions through TREB’s MLS system in November 2018, down by 14.7 per cent compared to November 2017, when there was a temporary upward shift in demand caused by the looming OSFI-mandated stress test at the end of last year.

“New listings were actually down more than sales on a year-over-year basis in November,” President Garry Bhaura says. “This suggests that, in many neighbourhoods, competition between buyers may have increased. Relatively tight market conditions over the past few months have provided the foundation for renewed price growth.”

On a preliminary seasonally adjusted basis, sales were down by 3.4 per cent compared to October 2018.  The average selling price after preliminary seasonal adjustment was down by 0.8 per cent, compared to October 2018.

Average home prices, November

Toronto (416)
2018: $842,483
2017: $803,540

Rest of GTA (905)
2018: $750,721
2017: $732,848

GTA
2018: $788, 345
2017: $761,410

“Home types with lower average price points have been associated with stronger rates of price growth over the past few months,” says Jason Mercer, TREB’s director of market analysis. “Given the impact of the OSFI-mandated mortgage stress test and higher borrowing costs on affordability, it makes sense that the condo apartment and semi-detached market segments experienced relatively stronger rates of price growth in November, as market conditions in these segments remained tight or tightened respectively over the past year.”

Looking at the housing market from a policy perspective, TREB says it is encouraged with the provincial government’s recent announcement and on-going public consultation regarding a housing supply action plan.

“Housing supply remains a key issue in the GTA market,” says TREB CEO John Di Michele. “More specifically, an adequate supply and appropriate mix of housing types must be part of the conversation, as has been recognized by the provincial government in their consultation documents. Transit supportive and gentle density ‘missing middle’ housing should be a priority.”

 

GTA average prices and percentage gain by home type, November 2018

Detached: $1.01M, 1.3%
Semi-detached: $791,760, 8.3%
Townhome: $647,418, 3.1%
Condo: $556,723, 7.5%

TREB has commissioned research on these subjects and is holding a Market Outlook Economic Summit on Feb. 6, 2019.

“TREB is also encouraged that the provincial government remains committed to public transit expansion,” adds Di Michele. “TREB has long advocated for improvements to the Greater Golden Horseshoe transit and transportation network, and feels the time is right to have a conversation about the level of provincial and municipal responsibility that would be the most efficient arrangement to realize subway expansion sooner in Toronto, and the GTA, as this will impact the housing market.”

 

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GTA new home market gains further momentum in October

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GTA new home market gains further momentum in October

 Condos Oct web

The GTA new home market saw a relatively active month for new condominium apartment and single-family home sales and openings in October, according to the Building Industry and Land Development Association (BILD).

There were 2,805 condominium apartments in low, medium and highrise buildings, stacked townhouses and loft units sold in October, down 44 per cent from October 2017 but only one per cent less than the 10-year average, according to Altus Group, BILD’s official source for new home market intelligence. Single-family home sales, with 491 detached, linked and semi-detached houses and townhouses (excluding stacked townhouses) sold, were even with last October and down 64 per cent from the 10-year average.

With 21 condominium apartment projects and 14 single-family home projects opening in October, remaining inventory increased to 16,283 units, comprised of 10,982 condo apartment units and 5,301 single-family units. Remaining inventory includes units in preconstruction projects, in projects currently under construction and in completed buildings.

October best month

“The pickup in interest from builders and home buyers that started to emerge in the GTA new home market in September gained momentum in October,” says Patricia Arsenault, Altus Group’s executive vice-president, Data Solutions. “October was the best month we’ve seen this year not only in terms of sales – for both single-family homes and condominium apartments – but also new project openings. And for both sales and new openings, the increases from last month were stronger than the typical seasonal pattern.”

David Wilkes, BILD president and CEO, says the new home market’s gradual return to more typical activity levels was an encouraging sign. “It’s clear that when we are able to bring on more supply and give new home buyers more product to choose from, they get excited and motivated about making that choice. That’s why we are especially heartened by the new provincial government’s commitment to increasing housing supply through its Housing Supply Action Plan.”

Benchmark prices

The benchmark price for both condo apartments and single-family homes decreased slightly in October, compared to the previous month. The benchmark price for condo apartments was $775,537, which was still up 14.5 per cent over the last 12 months. The decrease in the benchmark price of condo apartments from September can be accounted for by the smaller benchmark size of units available to purchase. The benchmark price for single-family homes was $1.11 million, down 8.4 per cent over the last 12 months.

October new home sales by municipality

October 2018 Condominium Apartments Single-family Total
Region 2018 2017 2016 2018 2017 2016 2018 2017 2016
Durham 79 19 96 55 207 323 134 226 419
Halton 328 162 375 78 69 515 406 231 890
Peel 169 110 203 148 48 177 317 158 380
Toronto 2,133 4,085 1,478 74 28 14 2,207 4,113 1,492
York 96 613 336 136 139 621 232 752 957
GTA 2,805 4,989 2,488 491 491 1,650 3,296 5,480 4,138

 Source: Altus Group

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In conversation with Jim Ritchie of Tridel

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In conversation with Jim Ritchie of Tridel

It’s always a pleasure to spend time with the smart and insightful Jim Ritchie, executive vice-president of sales and marketing at Tridel, one of Canada’s largest and best condominium builders. In its eight decades, Tridel has built more than 80,000 homes, and that’s something to celebrate!

Tridel was founded by Jack DelZotto in 1934, when he built his first single-detached home near Dufferin and Bloor Streets. Jack, who arrived in Canada from Italy in 1927, was a stonemason by trade who worked in the mines in Timmins before coming to Toronto. (He helped lay the bricks at the Park Plaza Hotel. How’s that for history?).

Jack’s three sons — Angelo, Elvio and Leo — were brought into the company, and continued to grow the organization into what it is today. The name of the company evolved to Tridel (after the three DelZotto brothers).

The DelZottos have always been known as innovators and built their first rental apartment complex in 1961, featuring twin towers, a swimming pool, a recreation centre and landscaped grounds — quite luxurious for the times — the forerunner of today’s modern condo.

Today, the DelZotto brothers and their lifelong business partner Harvey Fruitman — along with their families — have carried on the tradition set by Jack of complete communities, environmental awareness and technical innovation. And it has grown.

As Ritchie tells me, Tridel manages every part of the development of a condominium project.

“We handle the entire process — land purchase, planning, approvals, marketing, selling, building, customer service and management. Overall, we control the customer experience from purchase to residency.”

In fact, in addition to Tridel, the Tridel Group of Companies consists of Deltera (construction services and management), Del Realty (real estate brokerage), Del Property Management (condominium property management), DelSuites (long-term furnished executive accommodations), Del Condominium Rentals (full-service condo rentals), Delmanor Retirement Living (seniors’ accommodations), Delcare (long-term seniors’ care facilities) and Del Management Solutions (residential and commercial property management).

Q: Did Tridel make a conscious decision to move from ground related housing to apartments and condominiums?

A: The transition from single-family homes to building rental apartments was an evolution. Tridel built a rental apartment complex complete with amenities and landscaping, which essentially became a model for the condominium we know today.

In 1967, when condos became a legal entity in Ontario, Tridel embraced the concept and started developing its first condominium the following year.

Q: What are your thoughts on the condo market in the GTA?

A: Toronto has the largest new condo market in North America. The market was outstanding in 2017, which was an exceptional year fuelled by many factors. But that record-breaking year couldn’t be sustained, and with a number of government interventions, including new mortgage rules, the market has levelled somewhat as compared to previous years.

We see consistent and long-term growth in the GTA housing market, especially with a strong economy and continuing growth in population. But it’s really very difficult to make predictions.

The success of the industry is predicated on relative affordability and more recently condos have become very popular because of the increasing cost of other forms of housing — 25 per cent of the cost of a home is various fees and taxes.

Q: What is Tridel’s philosophy of building condo communities?

A: We are city builders — actually all highrise builders are city builders — and at Tridel we put more focus on architecture and the public realm. Architecture matters and consumers understand that. Today’s consumers are well informed on these matters.

But it’s not easy, there are no easy projects anymore. No longer can we raze a parking lot and build a condo. There just aren’t any of these types of sites left. And creating real communities, which means mixed-use developments, brings more complexity.

Q: How have you seen suite design and amenity space changed over the years?

A: Architecture matters to Tridel and that includes suite designs that can optimize the use of space, and user-friendly amenities, which have changed over the years and now include more family-oriented spaces.

Evermore at West Village in Etobicoke offers some of the most current amenities and suite designs, including two- and three-bedroom suites for family living with larger entrances and bigger laundry rooms with more storage.

Some of the more in-demand amenities include shared workspaces and study pods, kids and youth zones and large outdoor terraces.

We’ve also found that putting the larger units in one area of the building — at Evermore they are in the podium — means that families can live near each other and that creates a sense of community.

Q: Tridel has a reputation for being in the forefront of green technology. Has that always been the case?

A: Tridel has always been on the leading edge of new construction methodology and energy-efficient building practices. These include the fundamentals of building design, including the building envelope and mechanic al systems. In 2005, we brought our first LEED building into the marketplace, and now we lead sustainable residential condominium development in Canada.

Q: What new innovations does Tridel have in the works?

A: I’m very excited by Tridel Connect, an innovative range of integrated smart home features, which we recently rolled out very successfully at our Ten York community. Some of the features of Tridel Connect include the ability to set the temperature, security alarm and receive notifications about community events through an in-suite wall pad or remotely with a smartphone app. Suite locks are also dig ital, opened with a personalized code, and additional codes can be programmed for service people, like a cleaner or dog walker.

You can also use the wall panel to connect visually with the concierge and select common areas, and you can open common-area doors with your smartphone, so no more key fobs. That also applies to the garage door, where a camera uses license plate recognition to provide entry.

We had this technology developed about six years ago, but we wanted to make sure we had worked out all the kinks before announcing it. It will be included in many Tridel condos going forward.

PORTFOLIO

  • Evermore at West Village, Eva Road & Hwy. 427
  • Aqualuna at Bayside, Queens Quay & Sherbourne
  • Auberge on the Park, Leslie & Eglinton
  • Auberge II on the Park, Leslie & Eglinton
  • Bloor Promenade, Bloor & Islington
  • Bloorvista, Bloor & Islington
  • Islington Terrace, Bloor & Islington
  • Bianca, Dupont & Bathurst
  • Via Bloor, Bloor & Parliament
  • Via Bloor 2, Bloor & Parliament
  • Aquabella at Bayside, Queens Quay & Sherbourne
  • Ten York, York & Harbour
  • Alto and Parkside at Atria, Sheppard & Hwy. 404
  • Trio at Atria, Sheppard & Hwy. 404
  • Parfait at Atria, Sheppard & Hwy. 404
  • Aqualina at Bayside, Queens Quay & Sherbourne
  • Aquavista at Bayside, Queens Quay & Sherbourne
  • Alter, Church & Carlton
  • 101 Erskine, Yonge & Eglinton
  • Avani 2 at Metrogate, Kennedy & Hwy. 401
  • Selene at Metrogate, Kennedy & Hwy. 401
  • SQ2 at Alexandra Park, Spadina & Queen
  • FORM, Queen & McCaul
  • Scala, Leslie & Sheppard
  • Sherwood at Huntington, Bayview & Lawrence

Tridel.com

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Approval web

Delays in approval process contributing to housing affordability issue in GTA

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Delays in approval process contributing to housing affordability issue in GTA

Approval web

The former Ontario government’s growth policies have had the unintended consequences of lengthening the land development and approval process in the Greater Toronto and Hamilton Area (GTHA), negatively impacting housing supply and affordability.

This is among the key findings in the Greater Toronto and Hamilton Area Land Supply Analysis from the Building Industry and Land Development Association (BILD) and Malone Given Parsons Ltd. (MGP).

“Growth policies implemented by the former provincial government from 2006 and 2017 have reduced the amount of available land for new housing communities, increased land prices and have caused home prices to skyrocket,” says Dave Wilkes, president and CEO, BILD, referring to the 2006 and 2017 Growth Plans.

Read more: 5 steps to solving the housing affordability issue in Ontario

Read more: Pent-up demand for townhomes building in the GTA

Read more: GTA new home market shows some improvement in September

“Land use in the province of Ontario is highly regulated  and the 2006 and 2017 Growth Plan changes have slowed down the approval process to bring new land on stream for new communities,” adds Matthew Corey, principal, MGP. “Increasing the supply of new land for housing is subject to a process that can take as long as a decade or more.”

The analysis is intended to provide an accurate accounting of greenfield land supply in the GTHA and Simcoe, to determine if the 2031 population and job forecasts of the Growth Plan will be achieved.

Key observations

  • The percentage of available land that has been approved for new housing communities in the GTHA is 4.5 per cent and decreasing.
  • Some municipalities in the GTHA have yet to conform to the 2006 Growth Plan requirements, missing the 2009 target by nearly a decade, resulting in less housing being built across GTA municipalities versus Growth Plan forecasts.
  • As land supply dwindles and as municipal delays increase, the value of serviced land has increased by more than 300 per cent since 2006.
  • Existing low density neighbourhoods in the GTHA are resistant to intensification, pushing density to urban cores and to new communities near the fringes of the GTHA. The latter are far away from transit and infrastructure, putting a greater reliance on cars and increasing traffic congestion.
  • More gentle density homes (stacked-townhouses and lowrise apartments) should be built within walking distance of transit in built-up areas of the GTHA. This will maximize investment in infrastructure and transit. However, community resistance to increased density makes building in this area time-consuming, expensive and subject to intervention at the municipal level.

Recommendations

BILD and Malone Given Parsons offer six recommendations to help solve the issues:

  1. Make more vacant land available for new communities
  2. Cut bureaucratic red tape and reduce duplication in the planning and approval process
  3. Avoid pushing too much density to fringe areas and away from transit and existing infrastructure
  4. Encourage moderate or gentle intensification across the region by clarifying and amending Growth Plan policies to encourage intensification across the GTHA
  5. Maximize investment in transit and infrastructure
  6. Provide greater certainty for future development by identifying the agricultural and rural lands in the inner-ring (Whitebelt) as future urban areas in the Growth Plan.

 

 

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