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BILD Outlook 2020

Outlook 2020 – what’s in store for GTA housing next year?

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Outlook 2020 – what’s in store for GTA housing next year?

Global and even some Canadian economic and political uncertainty shouldn’t derail growth in the GTA housing market next year, according to experts at the Building Industry and Land Development Association’s (BILD) recent Outlook 2020 event.

Craig Wright, senior vice-president and chief economist at RBC, and Peter Donolo, political and communications strategist with Hill + Knowlton Canada, said that overall, the fundamentals for the economy and housing market in Ontario and the GTA bode well for 2020. There are some challenges, however – namely the ongoing new home supply issue.

With Justin Trudeau’s Liberals re-elected as a minority government, Canada will see a relatively stable left-leaning federal government that will focus on environmental issues, affordability and redistribution rather than on economic growth, Donolo says.

BILD Outlook 2020
Left to right, Dave Wilkes, Peter Donolo and Craig Wright

Globally, geopolitical uncertainty and softening economic growth mean that Canada faces challenges with export and investment, leaving the heavy lifting to the consumer, according to Wright. Economic growth is expected to be modest and in line with employment and income, at about 1.7 per cent, and interest rates will likely continue to be low.

Strong employment growth

For Ontario, GDP growth will likely be a notch below, about 1.5 per cent, with housing starts for 2019 and 2020 at about 72,000 units, compared to about 79,000 in 2018, Wright says.

“That reflects a number of factors,” Wright told HOMES Publishing. “We continue to see strong employment gains, Ontario is leading Canada in terms of employment growth on a year-over-year basis, and strong population growth. So, strong fundamentals supporting it, in a low rate environment.”

BILD Outlook 2020 Craig Wright
Craig Wright, senior vice-president and chief economist, RBC

The GTA’s robust population growth will continue to drive demand for both ownership and rental housing, Wright says. Municipal and provincial governments are shifting to supply-side solutions for balancing the housing market.

“As you look at the structural reality of the GTA market, where we have immigration coming in… we have 140,000 to 150,000 people coming to this region each and every year,” adds BILD President Dave Wilkes. “That really does bode well for our industry.”

The mortgage stress test needs to be revisited in light of the continued low interest rates, Wright says.

Millennial attitudes

Another issue that might affect the Canada and the building industry is Millennials and their views on the environment and the economy – attitudes Donolo describes as “absolute.”

BILD Outlook 2020 Peter Donolo
Peter Donolo, political and communications strategist, Hill + Knowlton Canada

“When I say absolute, you talk about the oil sands and it’s like you’re talking about the Medellin drug cartel,” he says. “They’re not conscious or interested in the fact that the oil sands and Canada’s oil and gas sector is a kind of the backbone of the Canadian economy, that millions of jobs depend on it… They’re not interested in a kind of slow transition or weaning away from it. They think it’s immoral… and this is a very widespread view.”

Millennial views on homeownership are also different, Donolo says.

“Do Millennials look differently at what homeownership is about? Are they less interested in owning a traditional detached house with a backyard and property? If you look at rates of drivers licenses among Millennials, there is perhaps an indication.”

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Examining the GTA affordable homeownership crisis

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Examining the GTA affordable homeownership crisis

A definitive new book providing a deeper insight and understanding

A book titled “The GTA Affordable Home Ownership Crisis: A Deeper Understanding and the Pathway to the Solution” has just been released and is available to download online at affordablehomeownership.ca.

It is no secret that the problem of affordable homeownership in the GTA is out of control, and is especially a concern for the millennial population. A recent OREA/Nanos survey found that 58.7 per cent of nonmillennial Ontarians agree or somewhat agree that homeownership is unaffordable in their neighbourhood, while 41 per cent listed saving enough for a down payment as the most important barrier to owning a home.

With average new GTA condo prices at $500,000, average new GTA house prices at $1 million and resale at about $800,000, generally speaking, the next generation has little chance at homeownership without a significant financial contribution from their parents.

The book’s aim is to bring an understanding of the relevance and implications by exposing the drivers behind the problems and pointing towards a pathway to the solutions so that our children, and their generation, will not have to face a future without affordable homeownership.

The majority of GTA residents count their home as their largest asset. A future without affordable homeownership could hollow out the wealth of the middle class and have a catastrophic effect on the economy, for a generation.

The book identifies drivers of the crisis, such as excessive taxes on new homes and condos, excessive mortgage regulation, and the imbalance between supply and demand, but also offers creative solutions that can be applied in order to address the crisis in a responsible and timely way.

Written by R. Scott Davie, a leader in the sales and marketing of GTA new homes and condos for decades, and a trusted advisor to many of the GTA’s top developers, this book is rich with ideas and breaks down the elements of the crisis in an interesting way.

“The solution of the GTA homeownership crisis will only grow through understanding, resonating from professionals in the development Industry to the public, and it is only through public awareness that government and non-governmental organizations will have the motivation, and the ability, to make the needed changes,” says Davie.

“I wrote this book to make a relevant personal contribution towards solving the serious crisis of affordable homeownership by bringing awareness to the public, developers, their employees and consultants, and politicians. The hope would also be to generate a potential spark for additional creative solutions, not to make a profit of any kind,” he adds.

Recognizing that we live in an age that we are inundated with information, the book takes a concise and approachable magazine style format with pictures and infographics and is about a 30-minute read.

Written by R. Scott Davie, a leader in the sales and marketing of GTA new homes and condos for decades, for a limited time you can download a free copy at affordablehomeownership.ca.

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GTA waterfront homes

Budget 2019 comes up short

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Budget 2019 comes up short

GTA waterfront homes

The federal government released the much-anticipated Budget 2019 this week, with homebuyers, builders and others awaiting measures to address housing issues.

And in short, it comes up, well… a little short.

First-time homebuyer help

Much of the housing focus in Budget 2019 was on addressing the needs of first-timers, namely with a new First-Time Home Buyer Incentive.

  • The Incentive would allow eligible first-time homebuyers who have the minimum down payment for an insured mortgage to apply to finance a portion of their home purchase through a shared equity mortgage with Canada Mortgage and Housing Corp. (CMHC).
  • About 100,000 first-time buyers would benefit from the Incentive over the next three years.
  • Since no ongoing payments would be required with the Incentive, Canadian families would have lower monthly mortgage payments. For example, if a borrower purchases a new $400,000 home with a five-per-cent down payment and a 10-per-cent CMHC shared equity mortgage ($40,000), the borrower’s total mortgage size would be reduced from $380,000 to $340,000, reducing the borrower’s monthly mortgage costs by as much as $228 per month.
  • CMHC to offer qualified first-time homebuyers a 10-per-cent shared equity mortgage for a newly constructed home or a five-per-cent shared equity mortgage for an existing home. This larger shared equity mortgage for newly constructed homes could help encourage the home construction needed to address some of the housing supply shortages in Canada, particularly in the largest cities.
  • The First-Time Home Buyer Incentive would include eligibility criteria to ensure that the program helps those with legitimate needs, while ensuring that participants are able to afford the homes they purchase. The Incentive would be available to first-time buyers with household incomes of less than $120,000 per year.
  • Budget 2019 also proposes to increase the Home Buyers’ Plan withdrawal limit from $25,000 to $35,000, providing first-time buyers with greater access to their Registered Retirement Savings Plan savings to buy a home.

Noticeably absent from the housing measures was any adjustment to the stress test, which a number of experts say is necessary.

Industry reaction

“The Building Industry and Land Development Association (BILD) agrees with (Federal Finance Minister Bill Morneau’s) comments that there aren’t enough homes for people to buy or apartments for people to rent,” says Dave Wilkes, president and CEO.

“BILD feels the policies presented in (the) budget are a step in the right direction to help first-time homebuyers. We will continue to advocate for a review of the stress test so that first-time homebuyers can realize the dream of homeownership. Supply challenges still exist and are at the centre of the current unbalanced market, and we call for action on these by the provincial and municipal government.”

Supply challenges in the Greater Golden Horseshoe are serious, and Budget 19 fails to address them.

“This was a re-election budget that didn’t move the dial for new-home buyers in the GTA,” Richard Lyall, president of the Residential Construction Council of Ontario (RESCON) told HOMES Publishing. “While increasing RRSP borrowing for first-time homebuyers is helpful, creating The First-Time Homebuyer Incentive at a maximum of $500,000 doesn’t help many Torontonians or GTA residents.”

The Canadian Home Builders’ Association (CHBA) had been recommending a shared appreciation mortgage approach for some time, as a tool to help those who can’t get into homeownership but have the means to pay rent.

The modification to the RRSP Home Buyers’ Plan will help get Canadians into their first home, but will also act as a burden because the loan has to be repaid within 15 years, including a minimum of 1/15th per year.

“This means that, in the years following their home purchase, a homeowner has the additional financial responsibility of repaying their RRSP,” says James Laird, co-founder of Ratehub Inc. and president of CanWise Financial.

Important details of the First-Time Home Buyer Incentive program have yet to be released. For example, says Laird, it remains unclear whether the government would take an equity position in homes, or whether the assistance would act as an interest-free loan.

“This is an important distinction because if the government is taking an equity stake in a home, the amount the homeowner would have to pay back would grow as the value of the home increases,” he says.

The very launch of the program is surprising, Laird says, given that the BC Government implemented a similar measure a couple years ago, with unsuccessful results, and it was terminated in 2018. First-time home buyers found it difficult to understand and unappealing to have the government co-own their home.

Let’s do the math

Under existing qualifying criteria, including the stress test, homebuyers can qualify for a house that is 4.5 to 4.7 times their household income.

Under the new First-Time Home Buyer Incentive, however, the government has set a purchase limit of four times household income for the mortgage, plus the amount provided by the government, according to Ratehub.

By participating in this program, first-time homebuyers effectively reduce the amount they can qualify for by about 15 per cent, and their monthly mortgage payment naturally decreases in lockstep.

A household with $100,000 of income, putting a minimum down payment of five per cent, can currently qualify for a home valued at $479,888 with a $2,265.75 monthly mortgage payment.

Affordability calculations

The maximum purchase price for the same household, if they participate in the first-time homebuyer incentive, drops to $404,858.29 with a five-per-cent minimum down payment. The total mortgage amount would then be $400,000 (or four times their household income).

Mortgage payment calculations

If the household took a five-per-cent incentive from the government (for resales), their mortgage amount goes to $378,947.37, and monthly payment is now $1,810.90.

If the household took a 10-per-cent incentive, (for new homes) their mortgage amount goes to $357,894.73, and  monthly payment is now $1,710.29.

Stress test modifications

The CHBA is among the industry groups that is pushing for modifications to the existing mortgage stress test, which has served to lock out too many well-qualified Canadians due to the market and interest rate changes of the past year.

“The First-Time Home Buyer Incentive, if coupled with immediate adjustments to the stress test, has the potential for getting the housing continuum functioning again,” says CHBA CEO Kevin Lee. “It is essential that these changes come quickly, though. Current restrictions on mortgage access mean that many millennials and new Canadians are seeing homeownership slipping away, and in many markets the economic impacts are substantial.”

Looking ahead to the 2019 federal election, CHBA will be encouraging all federal parties to address housing affordability in very meaningful ways in their respective platform documents.

Budget 2019 housing measures

Budget 2019

 

 

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Survey Says…!

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Survey Says…!

In April, the CHBA surveyed 1,500 Canadians across the country for their thoughts on homeownership. Some of the key findings were that:

  • 75% of Canadians view homeownership as a key to financial security
  • 80% feel becoming a homeowner is more difficult than it used to be
  • 80% of renters would like to own
  • 50% of renters don’t think they’ll ever be able to afford to buy
  • 76% think that ultimately only the “very rich” will be able to afford to live where they want to
  • 2/3rds think the government has an important role to play in helping Canadians become homeowners
  • Only 10% think the government’s doing a good job at that.

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Millennials the engine of the real estate market

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Millennials the engine of the real estate market

According to a national study commissioned by Genworth Canada, six in 10 (59 per cent) millennials have already achieved their homeownership dreams. Among those who own their homes, three in 10 (30 per cent) millennials bought their first home or a home that was not their first in the past two years, compared to just 9 per cent of older Canadians. And over the next two years, among non-owners another 30 per cent of millennials plan on making their first home purchase, making them the engine of the real estate market.

The annual poll, completed in conjunction with the Canadian Association of Credit Counselling Services (CACCS) from February 8 to March 27, asked 2,000 Canadians questions about their financial well-being, homeownership intentions and preparedness for the future.

The national Financial Fitness and Homeownership Study shows that Canadians remain committed to homeownership and those who own a home have better financial outcomes than those who do not. Homeowners are far more likely to say they are in great/good financial fitness versus non-homeowners. Heres the breakdown of those who say they are in great/good financial shape:

  • 68 per cent of first-time buyers;
  • 58 per cent of first-time intenders;
  • 59 per cent of repeat buyers;
  • 62 per cent of repeat intenders.

“It is encouraging to see the high level of financial confidence coming from first-time homebuyers and homeowners. As a company that is committed to providing financial literacy education to aid those looking to achieve homeownership, these results demonstrate that this segment of Canadians are doing the necessary homework to support their financial future,” said Stuart Levings, president and CEO of Genworth Canada.

Homeownership is a mainstay for many Canadians’ financial wellbeing and homeowners demonstrate greater financial discipline and report greater long-term confidence in their financial outlook.

Here is a look at how homeowners and first-time buyers/intenders feel about their financial shape:

“Being intentionally aware of the state of your personal finances is especially important when considering the purchase of a home,” said Henrietta Ross, CEO of the CACCS. “Understanding how financially fit you are by exploring your Financial Fitness score at www.caccs.ca is quick, easy and free – but rich in value because it can help guide wise financial choices.”

This score is based on attitudinal, behavioural and outcome measures that were developed from Financial Fitness index benchmark data.

To read the full 2018 Financial Fitness and Homeownership Study report, visit http://genworth.ca/en/index.aspx

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Industry Report: Building Industry Continues to be Undervalued by Government

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Industry Report: Building Industry Continues to be Undervalued by Government

Despite considerable efforts, we have not succeeded in achieving a full, public understanding of the reasons why housing prices are so high

Writing this — my last column for HOMES Publishing Group — conjures bittersweet feelings for me since I retired from the Building Industry and Land Development Association (BILD) on January 1.

What brought me to BILD was the desire to have a positive impact on public policy. I thought this industry should have a voice that is heard by government decision makers. I wanted to elevate the debate that public policy is contributing to the cost of homes in the GTA.

As the president and CEO of BILD, I had the constant support of the members, the board of directors and BILD staff, all who allowed me to tell the industry’s story and do what was right. Their patience allowed me to persevere and to execute my vision, while having fact-based discussions.

I am proud of the progress we have made over the past five years. However, my biggest frustration is how undervalued the industry continues to be perceived by the province of Ontario and many municipalities.

Despite our considerable efforts, we have not succeeded in achieving a full, public understanding of the reasons why housing prices are so high in this region. Housing affordability and the ability to own a home are important components in quality of life, which — along with livelihood — are at risk for our future generations.

The residential and land development industry is one of the most regulated in the country and the prices of homes reflect the policy our industry must follow, and how those policies are implemented. At some point, policy makers will have to say “our policies are creating outcomes that are not in the public interest,” and they will have to listen to the experts that are responsible for building communities. Because what the development and building industry wants to do is to build homes people can afford to purchase — especially first-time buyers.

I have advocated for a streamlined approvals process, shovelready land with proper infrastructure and to update out-of-date zoning bylaws. It is time for all governments to show a true commitment to their promises to make things happen and enact policies that meet the challenges of the rapidly growing population. With that, housing people can afford to purchase may continue to be a reality.

I want to leave this message for young people and new residents who choose to make their homes in this great region: No matter how difficult the situation may seem, continue to maintain the dream of homeownership.

Looking back, what I am most proud of is that BILD has never been more stable from a business perspective with the purchase of the home shows in the GTA. This will enable the organization to be a champion of the industry and have an impact on public policy in Ontario for years to come.

Another important advancement for the building industry occurred on January 1, 2015, when our advocacy efforts were rewarded when the provincial government approved the construction of six-storey wood buildings. It will take time to see the true impact of this policy change, but initial results are very encouraging.

In closing, the best part of my five years has been the amazing people I have met and the wonderful relationships I forged. We really do work in the best industry, in the best city, in the best province and in the best country in the world.

BRYAN TUCKEY is President and CEO of the Building Industry and Land Development Association (BILD) and is a land-use planner who has worked for municipal, regional and provincial governments. He can be found on Twitter (twitter.com/bildgta), Facebook (facebook.com/bildgta), and BILD’s official online blog (bildblogs.ca).

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Housing market in GTA sees price gains

Housing market in GTA sees price gains

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Housing market in GTA sees price gains

The Greater Toronto Area’s housing market sees double-digit year-over-year price gains in fourth quarter of 2017

The Royal LePage House Price Survey released January 10, 2018 revealed double-digit growth across the GTA in the fourth quarter of 2017 compared to the same quarter last year. Home values continue to be influenced by an exceptionally strong start to 2017. During the quarter, demand continued to slow in many suburban regions across the GTA. With the exception of condominiums, all housing segments studied depreciated on a quarter-over-quarter basis, as poor winter weather, growing affordability constraints and the threat of a new stress test caused many prospective homeowners to sit on the sidelines, waiting to see if prices would soften.

In the fourth quarter of 2017, the aggregate price of a home in the region grew 14 per cent year-over-year to $837,873. When broken out by housing type, the median price of a two-storey home in the GTA climbed 13.9 per cent year-over-year to $982,637, while the median price of a bungalow increased 8.3 per cent year-over-year to $806,183. During the same period, the median price of a condominium within the region saw the most significant price hike, surging 19.5 per cent to $476,421.

“Over the last decade, condominium prices have tended to be less volatile when compared to other property types, maintaining strong upside appeal while demonstrating resilience in the face of varied market conditions,” said Kevin Somers, COO, Royal LePage Real Estate Services Limited. “When markets soar, prospective homeowners will increasingly look to more affordable property types, like condos, as a result of their diluted purchasing power. This causes pricing and sales activity to ramp up in these categories.

“Even when overheated, condominium price growth is often more manageable relative to other property types given its lower price point,” added Somers. “When prices skyrocket, detached homes are far more likely to overshoot their mark, and because they are considerably more expensive, any decline in market characteristics will be far more pronounced within the segment, especially when home values are already placed out of the reach of many potential purchasers.”

On a quarter-over-quarter basis, the aggregate price of a home in the GTA fell 1.7 per cent, while the median price of a two-storey home and bungalow declined by 2 per cent and 2.4 per cent, respectively, when compared with the previous three-month period. Condominiums were the only segment to witness a slight gain on a quarter-over-quarter basis, rising 0.4 per cent.

Since the beginning of the quarter, continued affordability constraints and waning consumer confidence kept many purchasers on the sidelines in the hopes that prices would soften, especially in suburban regions outside of the core where rates of appreciation far surpassed those experienced in the City of Toronto. When compounded with the Office of the Superintendent of Financial Institutions’ (OSFI) most recent policy announcement, which will require that all new uninsured mortgages undergo a stringent stress test, sentiment softened further as prospective homeowners continued to process the new regulation’s effect on the market and their purchasing power.

“Many potential purchasers believe that there may be one final act remaining in the Greater Toronto Area’s most recent housing cycle and they are willing to hold off and see if a significant price adjustment is just over the horizon,” Somers said. “However, while hope remains eternal, prices are still very much comparable to the recent peak of the market, and frankly, it would be a very big surprise if the Greater Toronto Area completely shifted to a buyer’s market. External demand for housing across the metropolitan area is expected to remain strong thanks to the region’s robust economy luring many buyers into its jurisdiction from across Canada and around the globe.

“Peak millennials, who are also increasingly reaching the age of homeownership, will also place a significant strain on inventory across the region, turning the process of finding a home into an exercise in adjusting expectations,” concluded Somers. “As with Vancouver and many other major cities around the world, the trade-off between housing type and location will likely become more prevalent in the future across the GTA.”

According to Royal LePage’s most recent Market Survey Forecast, the company predicts that the aggregate price of a home in the GTA will appreciate by 6.8 per cent by the end of 2018, as many purchasers acclimate to the new mortgage rules and continue to compete over low inventory levels.

Market Summaries

City of Toronto

Market trends began to heat up slightly in the Toronto, with the region’s robust economy luring many purchasers from across the GTA into the region, seeking to live and work downtown. As opposed to many suburban cities across the metropolitan area, desirable properties that were priced correctly tended to sell quite quickly within the region and would often receive multiple offers. During the quarter, the median price of a home in the area rose 17.7 per cent year-over-year to $850,899.

Buyers have taken a wait-and-see approach in Scarborough, causing the region to transition towards more of a balanced market. Yet, despite recent trends increasingly favouring purchasers, prices still remain high, causing many prospective homeowners to look to the condominium segment or leave the city entirely for areas outside of the GTA where homes are more affordable. When compared to the fourth quarter of 2016, price appreciation remained strong within the region, with the median home value rising 8 per cent to $659,625.

York Region

Trends began to vary significantly across the York Region, with sales activity in Richmond Hill falling as a result of previously high levels of appreciation pricing many purchasers out of the market. While some buyers are trying to capitalize on current prices, many homeowners are not willing to list their properties as they believe that they should still fetch as much as they would have in the spring.

Meanwhile, at the opposite end of the spectrum, home values in Vaughan remained remarkably resilient during the quarter, as the region posted one of the strongest quarterly and year-over-year gains of any region within the GTA in both the bungalow and condominium market segments. As a result, in the fourth quarter of 2017, the median price of a home in Richmond Hill and Vaughan grew by 7.9 per cent and 16.5 per cent year-over-year to $1,246,771 and $1,080,366, respectively.

The Markham housing market sputtered in the fourth quarter of 2017, as sales activity and prices within the region’s high priced two-storey market segment declined. Newly built, larger condominiums served as a bright spot for the region, enticing a significant amount of interest from purchasers. Meanwhile, homeowners within the detached resale market decided to forgo listing their homes until conditions and pricing improved. While home values fell by 4.7 per cent on a quarterly basis, large gains witnessed during the spring caused the region’s aggregate home price to surge when compared to the same time last year, rising 11.2 per cent to $1,063,513.

Brampton

The relative affordability of the Brampton housing market enticed purchasers back into the market from the sidelines during the fourth quarter of 2017, as quarterly price changes helped home values align with prospective homeowners’ expectations, predominantly piquing the interest of many first-time buyers and residents already found within the city. As a result, the region witnessed a slight increase in sales activity, and the aggregate home price rose 14.7 per cent year-over-year to $709,071.

Mississauga & Oakville

While some purchasers jumped into the Mississauga and Oakville housing markets to find a property before the new OSFI stress test took effect, the majority of prospective homeowners elected to wait on the sidelines in order to gauge the impact of the new policies. This however did not translate into a large reduction in pricing, as inventory remained low across the regions. Existing residents are now also holding off on listing their homes, believing that pricing may be rekindled once new market conditions are absorbed. During the quarter the aggregate price of a home in Mississauga and Oakville increased by 12.7 per cent and 14.2 per cent year-over-year to $742,200 and $1,105,412, respectively.

Milton

The aggregate price of a home in Milton climbed 10.2 per cent year-over-year to $728,584 in the fourth quarter of 2017, as previous high home price appreciation caused market trends to slow within the region. On a quarter-over-quarter basis, the aggregate price of a home within the city fell 4.6 per cent, primarily as a result of eroded affordability.

Durham Region

During the quarter, Oshawa and Ajax experienced the largest aggregate home price increases of any area studied within the Durham Region, rising 10.9 per cent and 11.6 per cent year-over-year to $534,008 and  $689,325, respectively.

Pickering also saw a significant increase in price, with its aggregate home value rising 10.5 per cent this year over last to $718,336, while home values in Whitby grew by 8.9 per cent to $675,416 over the same period.

Nationally

Canada’s residential real estate market saw strong, but slowing year-over-year price growth in the fourth quarter of 2017. The Royal LePage National House Price Composite, compiled from proprietary property data in 53 of the nation’s largest real estate markets, showed that the price of a home in Canada increased 10.8 per cent year-over-year to $626,042 over the three-month period. When broken out by housing type, the median price of a two-storey home rose 11.1 per cent year-over-year to $741,924, and the median price of a bungalow climbed 7.1 per cent to $522,963. During the same period, the median price of a condominium appreciated faster than any other housing type studied, rising 14.3 per cent to $420,823 on a year-over-year basis.

“To prospective homeowners in our largest cities, condominiums represent the last bastion of affordability,” said Phil Soper, president and CEO, Royal LePage. “This is especially true for first-time buyers whose purchasing power has been reduced by tightening mortgage regulations.”

In line with Royal LePage’s previous Market Survey Forecast, Royal LePage predicts that the price of a home in Canada will increase 4.9 per cent by the end of 2018. Looking ahead, the company anticipates that the new OSFI stress test will slow the housing market in the first half of 2018, as buyers adjust their expectations and many market participants take a “wait and see” approach.

“The unsustainably high rates of home price appreciation witnessed in recent years in B.C. and Ontario were dangerous to the stability of not only the housing market, but to the broader economy itself,” said Soper. “Policy measures like the OSFI stress test will quell runaway housing inflation to an extent. However, we do foresee an upswing in demand in the latter portion of the year, as prospective buyers adjust to the new realities. To put it another way, the demand is still there.”

The Royal LePage House Price Survey provides information on the three most common types of housing in Canada, in 53 of the nation’s largest real estate markets. Housing values in the House Price Survey are based on the Royal LePage National House Price Composite, produced quarterly through the use of company data in addition to data and analytics from its sister company, RPS Real Property Solutions. Commentary on housing and forecast values are provided by Royal LePage residential real estate experts, based on their opinions and market knowledge.



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Consumer Protection: How Do You Know What’s Covered By Your Warranty?

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Consumer Protection: How Do You Know What’s Covered By Your Warranty?

The first year of homeownership is a critical time to report any problems

When you are buying a new home, you want everything to be perfect. Unfortunately, things can — and do — go wrong. Whether it’s something relatively minor, like unfinished trim around your bathroom door, or a potentially major issue like a crack in your foundation, your new home warranty is there to protect you.

Once you sign your purchase agreement, you should receive a New Homeowner Information Package from your builder. It will outline the package of warranties that protects new homeowners for up to seven years and $300,000 in coverage.

But how do you know if your faulty light switch or unfinished driveway is covered by warranty? It’s not always easy to tell, but our award winning customer service team is here to help answer your questions

As of June, our team had already fielded 23,960 phone calls, 10,734 emails and 1,064 online chats. Approximately two-thirds of all these inquiries came from homeowners, many of whom needed advice on how their warranty work.

When I talk with our call centre reps, they tell me that one of the most common questions they receive from homeowners is, “How do I know if items are covered by the warranty?”

Your new home warranty consists of one-year, two-year and seven-year warranties that cover various elements of your home’s construction. If you don’t know whether an issue will be covered under your warranty, you can consult the Construction Performance Guidelines, which are available on Tarion.com or via MyHome, Tarion’s online portal for managing your warranty. You can also call or email us to ask.

The first year of homeownership is a critical time to report any problems you have with your home. You can submit two forms in the first year after you take possession – one within the first 30 days and one within the last 30 days.

While Tarion’s acceptance of your form does not automatically mean that everything on the form will be covered by your warranty, it does provide a written record of your issues. This is why we recommend that you include everything on your form.

As a new homeowner, you obviously want to maintain a good relationship with your builder. If you’re worried about submitting your form, you should remember that you’re not being a tattletale – you’re protecting your rights.

Responsible builders will address warranty issues in a timely manner but if your builder doesn’t, the forms you submit help us help you.

The Tarion team is here to ensure your new home is safe and protected.

Our reward is comments like these from one happy homeowner: “Thank you so much for handling this so quickly. We appreciate the excellent customer service you have always given us!”

Howard Bogach is president and CEO of the Tarion Warranty Corporation. His column appears five times a year in HOMES Magazine. For more information about how Tarion helps new homebuyers, visit Tarion.com or find them on Facebook at Facebook.com/TarionWarrantyCorp

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Home Realty – How To Get a Foot In The Housing Market

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Home Realty – How To Get a Foot In The Housing Market

Sharing a home with other family members one way of beating sky rocketing prices.

The GTA housing market has gone wild with detached homes selling for hundreds of thousands of dollars over asking. Traditional single family houses are out of reach for most first-time buyers. Even move-up buyers looking to purchase an actual house might be feeling the pinch these days, given how sky high prices have soared.

The average price of a new detached house in the GTA has soared from $440,000 a decade ago to more than $1.2 million. It’s forcing many purchasers seeking single-family homes to head much farther afield, beyond the GTA’s borders, in order to be able to afford a home.

That doesn’t mean folks choosing to remain in the GTA have to give up on the idea of homeownership, mind you. In this vigorous market, where prices keep climbing higher, there are still ways to get a foot on the property ladder.

First, you could buy a house with family members, likely your parents. Borrowing from the Bank of Mom and Dad is how most first-time buyers are able to get into the market these days. Parents — or grandparents — might simply give the kids the down payment, helping them qualify for a mortgage. Or, in some cases, the parents might end up co-owning a home with their kids — and eventually grandkids — sharing the house, its responsibilities, as well as the equity gains.

But a more comfortable option for some might be to buy a house with a friend. In this case, you can get what’s known as a mixer mortgage, which can be split into separate terms for the two owners with fixed and variable rates and different amortization periods.

You might also consider buying a bigger property with several friends and renting out part of it. Some ground oriented townhouses have finished basements, which can be ideal for use as rental suites. Renting a portion of your property to a third party is a great way to help cut down otherwise hefty mortgage payments.

Whether buying a home with family or friends, you must be sure to put together a legally binding agreement that outlines responsibilities for payments and contingencies. What happens if someone falls ill and can no longer handle payments? Or what if the situation sours and things need to be undone? It’s best to have this outlined in writing so there are no nasty surprises if circumstances change.

If you want to buy a home but not be tied to a partner in the purchase, remember that you have the option of taking money out of an RRSP via the Home Buyers’ Plan, and use that for a down payment. This could help to shore up your other savings and get you across the mortgage loan qualification line.

Multiple debts might be taking a toll on your personal finance profile, so before applying for a mortgage you might also want to consider having student loans and credit card debt consolidated into a single loan. This could help improve your prospects in the qualification process.

Don’t let the ever-climbing house prices freak you out. There are still ways to get into the homeownership game, it will just require a bit of creativity and flexibility.

Debbie Cosic, CEO and founder of In2ition Realty, has worked in all facets of the real estate industry for over 25 years. She has sold and overseen the sale of over $15 billion worth of real estate and, with Debbie at the helm, In2ition has become one of the fastest-growing and most innovative new home and condo sales companies. In2ition has received numerous awards from the Building Industry and Land Development Association and the National Association of Home Builders.

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Tim Hudak, OREA CEO

OREA calls on government to strike affordable homeownership task force

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OREA calls on government to strike affordable homeownership task force

(Marketwired) — The best way to ensure millennials have a good shot at achieving the Canadian dream of homeownership is by putting more homes on the market, the Ontario Real Estate Association (OREA) told the Standing Committee on Finance and Economic Affairs January 18, 2017. In its 2017 pre-budget consultation, OREA recommended the creation of an affordable homeownership task force to determine how government can best improve housing supply and expand consumer choice.

“We are facing a critical housing supply shortage that is putting homeownership out of reach for Ontario’s first-time buyers and young families,” said Valerie Miles, OREA government relations committee chair. “In some markets, housing inventory is at all-time lows and prices are at record highs. Increasing the housing stock is necessary to give buyers more options at affordable levels. We need industry leaders to come together on this issue before the supply problem gets any worse.”

The Building Industry and Land Development Association (BILD) recently reported that housing supply has plummeted over the past decade. The lack of housing supply is a main driving factor for increasing prices of new single-family detached houses and highrise condos in the GTA.

In its pre-budget consultation, OREA recommended several ways to increase housing stock, including: reducing the red-tape around getting building permits approved; dedicated funding to help service land designated for development to incent builders to start projects sooner; and moving away from the proposed one-size-fits-all intensification targets under the provincial growth plan to allow developers to build “missing middle” housing types, namely townhomes, duplexes and stacked townhomes.

Tim Hudak, OREO CEO
Tim Hudak, OREO CEO

“The government is asking Ontarians for ways to create jobs, grow the economy and help people in their everyday lives — a strong real estate market checks off all three boxes,” said Tim Hudak, OREA CEO. “Every home transaction generates $55,000 in economic spin-offs which creates jobs and supports local business, while homeownership offers endless social benefits for families and communities. If the goal of the pre-budget consultation is to build up Ontario’s future, then finding ways to make home ownership affordable is a great place to start.”

This month, Ontario increased the land transfer tax rebate to $4,000, which was previously $2,000, to help make homeownership more affordable for first-time buyers.

“The government deserves credit for taking positive steps to address affordability,” said Hudak. “We need more efforts like this to keep the dream of homeownership alive in Ontario. We look forward to continuing to work with policy makers on improving affordability even further.”

The Ontario Real Estate Association represents 70,000 brokers and salespeople who are members of the 39 real estate boards throughout the province. OREA serves its members through a wide variety of professional publications, educational programs, advocacy, and other services.

OREA.com


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