Tag Archives: homebuyer


Buyer confidence remains high

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Buyer confidence remains high

In December 2019, residential sales reported through TREB’s MLS System by Greater Toronto Area realtors were up by 17.4 per cent year-over- year to 4,399. Total sales for calendar year 2019 amounted to 87,825 – up by 12.6 per cent compared to the decade low 78,015 sales reported in 2018. On an annual basis, 2019 sales were in line with the median annual sales result for the past decade.

We certainly saw a recovery in sales activity in 2019, particularly in the second half of the year. As anticipated, many homebuyers who were initially on the sidelines moved back into the market place starting in the spring. Buyer confidence was buoyed by a strong regional economy and declining contract mortgage rates over the course of the year.

While sales were up in 2019, the number of new listings entered into TREB’s MLS system was down by 2.4 per cent year-over-year. For the past decade, annual new listings have been largely in a holding pattern between 150,000 and 160,000, despite the upward trend in home prices over the same period.

I asked Jason Mercer, TREB’s chief market analyst, for his thoughts on the latest numbers.

“Over the last 10 years, TREB has been drawing attention to the housing supply issue in the GTA. Increasingly, policy makers, research groups of varying scope and other interested parties have acknowledged that the lack of a diverse supply of ownership and rental housing continues to hamper housing affordability in the GTA. Taking 2019 as an example, we experienced a strong sales increase up against a decline in supply. Tighter market conditions translated into accelerating price growth. Expect further acceleration in 2020 if there is no relief on the supply front.”

The MLS Home Price Index Composite Benchmark was up by 7.3 per cent on a year-over-year basis in December 2019. From June 2019 onward, the annual growth rate in the MLS HPI Composite Benchmark accelerated. The average selling price in December 2019 was $837,788 – up almost 12 per cent year-over- year. For calendar year 2019, the average selling price was $819,319 – up by four per cent compared to $787,856 in 2018.

I asked TREB’s CEO John DiMichele what the new year has in store for the GTA real estate market.

“TREB is committed to conducting and sponsoring evidence based, empirical research on housing market and broader regional economic issues. We share this research in order to contribute to the policy debate. On February 6, 2020, TREB will be releasing its Market Year in Review and Outlook report, which will contain consumer polling results, market overviews and forecasts, and new third-party research on housing and the economy in the GTA.”

Michael Collins is president of the Toronto Real Estate Board, a professional association that represents 54,500 professional realtor members in the Greater Toronto Area. You can contact him at trebpres@trebnet.com. For updates on the real estate market, visit trebhome.com.


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2020 must be the year of action on housing in the GTA

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2020 must be the year of action on housing in the GTA

“May you live in interesting times,” goes the expression, and we may well live through very interesting times in 2020 when it comes to housing and the economy. The coming year needs to be the year that governments and citizens focus on dealing with the housing supply shortage in the GTA. Fortunately, 2020 may provide several opportunities to start to address this generational challenge.

Let’s first look at some of the challenges we face in the housing market and in the economy. Sales data for the GTA’s new home and resale markets for the last two quarters of 2019 show a return to inflationary pressure on prices, after a moderation in 2018 and persistent housing supply shortages. Simply put, demand is picking up, prices are responding and supply continues to fail to keep up with demand.

The Canadian economy is showing signs of slowing, including the shedding of more than 70,000 jobs in November and the slowing of GDP growth due in part to trade tensions amongst large Canadian trading partners. Interest rates lowered somewhat in 2019, lowering mortgage rates. With the economy slowing, the Bank of Canada is likely to maintain its neutral to negative bias. Shortages of skilled labour and trades are a persistent issue for the building and land development industry in our effort to increase supply.

Still, I am optimistic for 2020, because I believe these challenges will also present opportunities to close the housing supply and affordability gap. First of all, there is now a broad consensus that the building of much-needed new housing supply has been inhibited by layers of time-consuming bureaucracy and slow approvals. These barriers should start to lessen in 2020, as municipalities update their policies to meet new requirements under the Ontario government’s Housing Supply Action Plan and changes to expedite Local Planning Appeal Tribunal (LPAT) hearings, which aim to increase housing supply by cutting red tape and speed up approvals.

Lower interest rates provide prospective homebuyers with lower borrowing costs, easing the barrier to entry. In a slowing economy, government spending on infrastructure and job skills training provides stimulus and a bridge back to growth and job creation. All three levels of government have the perfect opportunity in 2020 to focus on city-building infrastructure such as transit, water main enhancement and waste water capacity and treatment, which in turn supports and enables housing creation.

To help more Canadians find good jobs, governments could give more support to training for the skilled trades. The building industry is one of the few where well-paying jobs are unlikely to be moved offshore. Building houses, townhouses and condo apartments provides jobs, tax revenue and investment opportunities, in addition to providing the housing supply required to ensure the GTA remains an attractive and desirable place to live.

The signals in our economy and the housing market point to interesting times in 2020. Let’s seize all opportunities to make this year the year of housing.

Dave Wilkes is President and CEO of the Building Industry and Land Development Association (BILD).



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Mortgage web

Homebuyers undeterred by changes in mortgage landscape

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Homebuyers undeterred by changes in mortgage landscape

Mortgage web

Though 2018 was not the best year for the mortgage landscape, Canadians remain hopeful about buying a home.

A new survey from mortgage rate comparison site Ratehub.ca survey found that, despite recent regulatory changes and interest rate hikes,71 per cent of current non-owners plan to buy a home in the future. And 59 per cent of prospective first-time homebuyers plan to purchase a home within the next two years.

This year saw a number of changes that affected the costs of ownership. In January, the mortgage stress test came into effect, which lowered affordability for Canadians with conventional mortgages by around 20 per cent, Ratehub.ca says. In addition, through 2018, the Bank of Canada announced three 25-basis-point interest rate hikes. (These increases are almost always immediately followed by mortgage rate hikes at Canada’s major banks.) Meanwhile, home prices in large cities continued to edge upwards.

Young Canadians most optimistic

Ratehub.ca, however, says younger Canadians remain the most optimistic about the prospect of homeownership, with Millennial and Generation Z Canadians leading the charge in homebuying intent. According to the survey, homeownership is a goal for:

  • 87 per cent of Generation Zers
  • 81 per cent of Millennials
  • 64 per cent of Generation Xers
  • 54 per cent of Baby Boomers

Canadians’ high intent to purchase is tempered by several possible homeownership hurdles. When first-time buyers were asked about their primary barrier to entering the housing market:

  • 44 per cent cited insufficient down payment funds
  • 17 per cent cited housing market uncertainty
  • 12 per cent said their household income was too low to enter the housing market
  • 9 per cent preferred to maintain housing flexibility
  • 6 per cent said their credit score was too low to qualify for a mortgage

Many Canadians also expect home prices and mortgage rates to continue their upward trend in 2019. Among Canadians who plan on entering the housing market in 2019, 68 per cent believe mortgage rates will increase next year, while 58 per cent believe home prices will rise.

Better understanding needed

An eagerness to enter the housing market, however, hasn’t resulted in a better understanding of mortgage regulations amongst first-time homebuyers, Ratehub.ca says. Forty-seven per centof prospective first-time homebuyers are unaware of mortgage qualification rules that came into effect in 2018.

“The biggest hurdle for first-time homebuyers is saving up for a down payment,” says James Laird, co-founder of Ratehub Inc. and president of CanWise Financial. “While first-time buyers can take advantage of programs like the RRSP Home Buyers’ Plan which are tailored for their needs, buyers can also benefit from building a realistic savings plan to hit their goals.”


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

Higher rates and new rules cooling the condo market




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Keeping homebuyers satisfied

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Keeping homebuyers satisfied

By Howard Bogach

If you’re buying a car for the first time, you’ll do your research – read reviews, talk to other owners of the brand you’re interested in and visit dealerships. But once you’ve made the purchase, your decision on whether to buy that brand again will be determined not only by the quality of the car itself but also by the purchase and after-sales experience.

It’s the same with a new home. If you are a builder, the relationship with your homebuyer may begin in the sales office but it lasts for the full seven years of warranty coverage and beyond. The goal is to have it be an experience that your buyer will want to repeat or recommend to family and friends.

An informed homebuyer has a greater likelihood of being a satisfied homeowner. Many new homebuyers have never bought a pre-construction home before so they rely on the expertise of the builder to help them through the process of choosing a floorplan, selecting finishes and making the countless other decisions required.

As the warranty authority, we have seen disputes arise from what is essentially a difference in expectations over something like tile or breakdowns in communication that could easily have been avoided with better follow-up.

This is where Tarion can help. Education is a key part of our mandate and we offer a variety of education sessions for builders that covers everything from best practices in customer service and Pre-Delivery Inspections to individualized workshops based on homeowners’ survey feedback.

We also offer specialized training on Builder Bulletin 19 and 49 for condo builders, as well as delayed closing and occupancy training.

Builders aren’t the only ones who can benefit from our training sessions. Tradespeople are key to a builder’s quality control and so we encourage builders to invite their trades to hands-on tutorials, like Understanding Tarion’s Construction Performance Guidelines, where, using a model home, Tarion staff walks attendees through how defects are measured and assessed for warrantability.

When warranty issues do arise, it’s important that both homeowners and builders understand how the process works. We have recently created a new warranty process guide that outlines all the steps in the claims process including at what points homeowners or builders can request dispute resolution assistance. This tool is available to builders via our BuilderLink portal and will be incorporated into our regular Tarion overview training sessions.

I often say that a new home is one of life’s biggest purchases – and we want to help builders ensure that buyers are satisfied with both the purchase and the ownership experience. Our Stakeholder Relations Representatives can deliver a variety of current education sessions for you and your trades/suppliers. Contact your representative to learn more about how they can be customized to your needs, or to book a session.

Howard Bogach is president and CEO of the Tarion Warranty Corp


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First-time homebuyers face new challenges in 2018

First-time homebuyers face new challenges in 2018

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First-time homebuyers face new challenges in 2018

There are still plenty of opportunities for first-time homebuyers to enter the real estate market.

by Matthew Ablakan

Last year, we experienced many significant changes with regards to qualifying for a mortgage. In addition, the Bank of Canada increased their overnight rate twice for the first time since 2008. What does this mean for first-time homebuyers? A more difficult process to qualify for a mortgage, less purchasing power and more compromise.

As of January 1, 2018 buyers that have a down payment of less than 20 per cent will have to qualify using the Bank of Canada’s Benchmark Rate, which is currently at 4.99 per cent, or 2 per cent more than the interest rate they are being offered by their lending institution (whichever is higher). And the Bank of Canada has already signaled that Canadians should prepare for a series of interest rate hikes in 2018.

Matthew Ablakan, founder of Millennial’s Choice
Matthew Ablakan, founder of Millennial’s Choice

So, it seems, that this year will be filled with optimism as well as uncertainty. But there are still plenty of opportunities for first-time homebuyers to enter the market. With financial support such as the Land Transfer Tax rebate, HST rebate, Home Buyers’ Tax Credit and the ability to use your RRSPs for your down payment, there is still a lot of hope.

I recommend using a licensed broker who has great relationships with builders as well as banks and alternative lending institutions. This will give first-time buyers more flexibility, as well as options when it comes to making a purchase.

Some lending institutions — not the big banks — have more flexible guidelines that allow them to make certain exceptions when it comes to qualifying for a mortgage. And some builders offer incentives especially for first-time homebuyers.

Purchasing pre-construction real estate, whether a condo or a new home, offers flexibility as well as different options for first-time homebuyers. You have the opportunity to enter into the marketplace without having to dish out money for a mortgage and other expenses right away. All you need to worry about is the deposit the builder requires, as well as a mortgage pre-approval. This gives you lots of time to prepare for your final closing.

With that being said, if you purchase a condo that is going to be ready in three to four years, you might be able to afford something a little more expensive than if you were to purchase it right now. In the intervening years, you may be more established in your career, have a spouse who can contribute and you may be starting a family. All of these factors play a role in purchasing a home. Purchasing a new home or condo gives you flexibility in the event these things change.

But it is important not to overextend yourself when making a purchase. There are more costs to owning a home then just your mortgage payment. You must be prepared for things like property taxes, utilities, maintenance and upkeep, as well as things like cable, Internet and phone bills.

Another helpful tip is to move away from your parent’s way thinking. What your parents were able to purchase just doesn’t exist anymore. That is a fact. That is the reality that first-time buyers are faced with today. There is nothing wrong with purchasing a one-bedroom condo to get your foot in the door. This will allow you to build wealth and help you get one step closer to that dream home.

When it comes to purchasing real estate, there are many different factors involved. I strongly recommend you do your own research as well as consult with different professionals. There are some professionals who offer things like buyer seminars. It is also important to know what you qualify for before you start your search. This will save you lots of time. Also, ask your broker if he/she can recommend a lawyer as well as a mortgage broker. This will save you the hassle of finding someone that is trustworthy and reliable. Always remember that a real estate salesperson or broker cannot provide you with legal advice. The onus is on you to show your contract to a lawyer, who can then provide you with that peace of mind.

Purchasing a home is supposed to be fun. It represents the start of a new chapter and adventure. Compromise does not mean settlement. When you are in your home, it should feel like home.

Matthew Ablakan is the founder of Millennial’s Choice, a team of experienced real estate and mortgage brokers dedicated to serving the millennial generation.


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Record October 2017 for new condo sales

Record October 2017 for new condo sales

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Record October 2017 for new condo sales

Average price for available new detached homes rises to $1,548,888

New construction home sales soared in the GTA in the month of October, primarily driven by sales of multi-family homes, condo apartments in highrise and midrise buildings and stacked townhomes, the Building Industry and Land Development Association (BILD) announced November 24.

There were 5,377 new homes sold in October, according to Altus Group, BILD’s official source for new home market intelligence. About 91 per cent of them (4,884 units) were multi-family homes and only 9 per cent (493) were lowrise single-family homes such as detached and semi-detached houses and townhomes. Condo sales for October were 81 per cent above the 10-year average of 2,697, and the highest October yet recorded, while lowrise sales were 64 per cent below the 10-year average of 1,388.

As of the end of October, 39,476 new homes have been sold in the GTA in 2017, 82 per cent of them condo apartments in highrise and midrise buildings and stacked townhomes.

“October data shows that the new homebuyer is left with very little choice when it comes to purchasing a new home,” said BILD president and CEO Bryan Tuckey.

“Provincial intensification policy has our members building more high and midrise dwellings making housing choices a challenge. The cost of a single-family home is out of reach for many consumers pushing them to buy a condo over a house. As a result we are seeing record-breaking condo sales and higher prices this year for new lowrise homes.”

While supply of new housing increased again in October and reached 12,500 units, it is still well below what is considered a healthy level. Supply of new housing is typically measured by the number of new homes available for purchase in builders’ inventories at the end of the month. At the end of October, there were 9,308 multi-family homes and 3,192 single-family homes available in the GTA.

“Demand for newly-built condominium apartments is being fueled by three key buyer groups – small investors who have become the de facto providers of new rental housing supply in the GTA; end user buyers who might prefer a single-family home but are seeking out more affordable options; and the more traditional end users who value the lifestyle and amenities of well-located projects,” said Patricia Arsenault, Altus Group’s executive vice president of research consulting services.

Prices of available new homes in October increased slightly for both single-family lowrise homes and multi-family homes. The average for available new single-family homes was $1,217,428 up from $1,204,829 in September, and 29.8 per cent above last October’s average price of $937,689. The average price for available new detached homes was $1,548,888 and the average for available new townhomes was $995,571.

Meanwhile the average price of available new condo apartments in highrise and midrise buildings and stacked townhomes was $677,456 in October, up from September’s $661,188. The average price per square foot was $791 and the average unit size was 857 square feet.

October 2017










































































Source: Altus Group


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