Tag Archives: housing market

Securing a mortgage

Looking to secure a mortgage? Now is the best time to negotiate

Latest News


Looking to secure a mortgage? Now is the best time to negotiate

 

Securing a mortgage

The Bank of Canada again held its influential overnight lending rate today at 1.75 per cent, signalling the continuation of a stable interest rate environment – and underlining that now may be the best time to negotiate a mortgage.

Why? We’ll get to that in a second.

First, the BoC held the rate for the fifth straight announcement – it’s been at 1.75 since October 2018 – citing growing evidence that the Canadian economic slowdown in late 2018 and early 2019 is now being followed by a pickup in the second quarter this year. Housing market indicators point to a more stable national market, albeit with continued weakness in some regions.

In addition, the Bank says, continued strong job growth suggests that businesses see the weakness in the past two quarters as temporary, with recent data supporting an increase in both consumer spending and exports in the second quarter, and it appears that overall growth in business investment has firmed.

“The Bank’s language indicates that things will need to change to the positive or negative in order to move from their current rate strategy,” says James Laird, co-founder of Ratehub Inc. and president of CanWise Financial. “Therefore, Canadians can expect a stable rate environment for the foreseeable future.

“This announcement should bring peace of mind to consumers currently in a variable rate mortgage because it is unlikely that the prime rate will increase anytime soon,” he adds. “Going forward, a decrease seems as likely as an increase, which is also good news if you’re in a variable rate.”

Mortgage seasonality

Canadians may also be able to take advantage of seasonality in the mortgage industry to score the best deal on their lending rate. Just like spring is known as traditionally the busy season in real estate, it’s also a very good time of year to secure a mortgage.

Securing a mortgage to buy a condo in Toronto

Ratehub.ca, for example, analyzed historical rate data from 2016 to 2019 to identify the best times of year for Canadians to lock in to a rate, or refinance an existing mortgage.

According to Ratehub.ca’s historical data on the best five-year fixed and variable rates, Canadians have access to the lowest rates during the spring homebuying season – between April and July – every year. The second most competitive time period for mortgage rates occurs between October and December.

A similar story played out in 2017 when the average best five-year fixed rate fell to 2.4 per cent from 3.32 per cent, and the average variable rate dropped from 2.09 per cent to 2.04 per cent.

ALSO READ: Ontario releases plan to address housing affordability and supply issues

ALSO READ: Variable vs fixed mortgages? It’s complicated

A year later, 2018 proved that while a rising rate environment can override the benefits any spring mortgage deals, mortgage holders still benefited from certain promos. The average best five-year fixed rate increased from 2.94 per cent from January to March to 3.07 per cent, but the average best variable rate fell from 2.17 per cent to 1.96 per cent. Lenders actually slashed fixed rates over that period.

Spring promotions

“Lenders and mortgage providers come out with their strongest promotions during the busy spring and summer homebuying season,” Laird says. “Regardless of the interest rate environment, springtime is when lenders are willing to make the smallest margins in order to win business.”

During this period, many lenders will choose at least one rate and term to price very aggressively in order to attract attention to all of their mortgage products. Lenders also come out with special promotion offers to incentivize borrowers to lock in a rate. Consumers can expect to see cash-back deals to help with closing costs and refinance fees. Some lenders offer extra-long rate holds during this period. For example, BMO is currently offering a 130-day rate hold. The “30-day quick close rate” is another promotion many lenders opt for – this is a discounted rate that applies if your mortgage is closing in the next 30 to 45 days.

It’s crucial that lenders remain competitive through the spring market, Ratehub says, to hit their annual mortgage volume targets. In most cases, lenders will hit their targets during the second quarter (April to June) and, as a result, tend to be less competitive with promotions during the latter half of the year.

Consumers will typically see rates fall again in October, in the lead up to Oct. 31, when all of Canada’s major banks end their fiscal year. Lenders that want to get an early start on their targets for the following year often come out with promotions during this time period.

Bank results

Further benefiting the mortgage landscape for Canadians is that Canada’s big banks this week are reporting lower second quarter profits than expected.

“The poor results reported by Canada’s big banks in Q2 2019 could be good news for mortgage consumers,” Laird told Homes Publishing. “In light of these results, it would be unsurprising if the banks aggressively try to win mortgage business by offering lower rates to consumers or promotions to attract more business in the latter half of 2019.”

RELATED READING

Ontario releases plan to address housing affordability and supply issues

Three important questions facing the GTA housing market this year

 

SHARE  

Featured Products


condo_market_gta_logo

Three important questions facing the GTA housing market this year

Latest News


Three important questions facing the GTA housing market this year

As I predicted last year, our paradigm has shifted due to the government intervention of the stress test as interest rates increased. In a nutshell, the GTA real estate market has since slowed on both the buying and selling sides. All but condo prices have slowed. There is a high demand for the smaller properties, and it appears that first-time homeowners are grasping at the cheapest properties they can get.

There are still three big questions that will determine the playing field for 2019.

1. Where are interest rates going?

The answer is not so simple. In fact, it is almost impossible to answer. Interest rates are the product of the Bank of Canada lending rate, and the BoC determines the lending rate based on the economy. To figure out the economy is like trying to figure out a lock combination with a million different variables. My advice is to play it safe, and if you take a risk, make it a calculated one. I always use the inflation rate for appreciation and worst-case scenarios with my clients.

2. Will the federal government reconsider the stress test?

The stress test was introduced to prevent homebuyers from defaulting on their mortgages in case of an interest rate hike.

Since the stress test was introduced, the real estate market has slowed substantially due to qualification and affordability. This type of government intervention shouldn’t be taken lightly. Although the test was implemented in good faith, the government should have put some measures in place before implementing such a heavy-handed rule. Let me explain why.

Say the stress test was set up when the interest rate was in the low two-per-cent range. The stress test would mean that the qualifying rate was slightly more than four per cent at that time. Fast forward approximately 12 months and at least five interest rate hikes, and we are at a qualifying rate of slightly more than six per cent. Now the same person who qualified a year ago, will have a much lower borrowing power.

Who does this hurt? For starters, buyers who purchased pre-construction and are looking to close in the near future. The original pre-approval they once obtained is no longer valid, and if they can’t borrow the difference or get a co-signer, they won’t be able to close. As a real estate broker, I always warn my clients against such situations, as well as the potential reward if done right.

3. Where is 2019 headed?

Uncertainty is still the driver, but it’s safe to say this is our new normal. Last year, it was pretty shocking for everyone who got caught in the middle of all these new rules and rate hikes. Sellers were refusing to realize price drops, and every few weeks they would slowly introduce a price reduction.

Buyers experienced a harsh reality and were forced to revisit expectations. Although prices dropped, so did borrowing power, which led buyers to go back to renting and attempt to save some more or, as mentioned, lower expectations and purchase the next best property they can afford to get into homeownership.

There are still those who are waiting to close on a purchase and will have to come up with the difference, get a co-signer or go to a B lender and pay higher interest. However, as the dust settles, buyers are finding their confidence again. Sellers are being more realistic, and buyers also have a more practical approach.

Unless we keep seeing interest rate hikes, there is only one way to go, and that is up – as long as the government re-visits the stress test and configures it to adapt to the ever-changing interest rate environment.

ARIE BUZILO is a real estate broker and an investor specializing in buying and selling properties all over the GTA. He works out of Century 21 Leading Edge Realty.

SHARE  

Featured Products


cl_may19_condo_market2_fi

When the Elite purchase condos

Latest News


When the Elite purchase condos

When people shop for a new condominium, I always advise them to make a list of must-haves and nice to-haves. It can also be fun to make a wish list of everything you would like to have if money was no object. Of course, nowadays, price looms large in most people’s consideration, but there are many buyers who can afford absolutely everything they desire. Imagine what an experience that must be!

So, what can money buy? The first thing that comes to mind is the opportunity to customize a penthouse extensively. Let’s say a purchaser starts with a 5,000-sq.-ft. design. Depending on preferences, that buyer might want a traditional layout with separate living and dining rooms. Those with more contemporary tastes may opt instead to have an open concept main living area with plenty of space for entertaining on a grand scale. This ballroom-inspired space could hold tables for dining or could be kept open, depending on the event.

Another benefit of money-is-no-object shopping is the ability to incorporate things such as exercise facilities, a home theatre, media room and whirlpool into the suite, rather than sharing these amenities with other residents. Talk about pure luxury! Even a private landscaped rooftop terrace with a pool is a possibility. Some of the most elite penthouses include space for staff quarters and a separate entrance as well, sometimes a private elevator. Multiple balconies and terraces may also be part of the suite’s layout to maximize views and the ability to enjoy the outdoors when the weather is pleasant.

Today’s new condos all come with outstanding features and finishes, but purchasers who can afford it all can have sumptuous appointments brought in from around the world. Kitchens alone can feature items such as a barbecue stove, vegetable steamer beside the sink, pasta tap at the back of the stove and an exotic backsplash. Maybe buyers want appliances to rise out of the counter with the press of a button.

And let’s talk master bedrooms and ensuites. The possibilities are positively elegant, from marble counters to lavish oval soaker tubs, spa features and steam rooms. A special wall designed specifically to fit an art collection, multiple fireplaces, backlit coffered panels on high ceilings, elegant chandeliers… if you can imagine it, a developer can likely source and install it. Think of these as the most upscale of upgrades imaginable.

There is another way to live an ultra-pampered lifestyle in a condominium – purchase in a residence situated above a five-star hotel. Suite owners can tap into the world-class amenities of the hotel below. How wonderful it must be to simply hop on an elevator to indulge in spa treatments or dine at a superb restaurant.

For some elite buyers, a penthouse in Toronto is one of two or more residences they own. They may consider it a home base during business trips or vacations. Yes, this is a dream scenario for most of us, but isn’t it grand to know that a condominium wish list can become reality for those who can afford it?

BARBARA LAWLOR is president and CEO of Baker Real Estate Inc., winner of the pinnacle 2017 Riley Brethour Award from BILD, and an indemand columnist and speaker. A member of the Baker team since 1993, she oversees the marketing and sales of condominium developments in the GTA and overseas. Keep current with The Baker Blog at blog.bakerrealestate.com

SHARE  

Featured Products


cl_mar19_condo_market_fi

Look for the condo market’s hidden gems this spring

Latest News


Look for the condo market’s hidden gems this spring

We can almost see the end of winter, and with spring tantalizingly around the corner, perhaps this is the year to buy your new home.

The market is changing daily; our city continues to grow and the shortage of new homes and new condos continues; demand still far outweighs supply. New detached housing took it on the chin a little, although there is little available, and little on the horizon. Average pricing across the GTA still exceeded $1 million.

With my three kids still to buy their first new home, I guess retirement isn’t on the horizon for me and many others as soon as I expected. They’ll need help getting into the market. Rents are forecasted to increase about 11 per cent citywide, so owning will still look like a better option if you can get in. I predict a return to a strong detached new home market in the not so distant future. Builders are feeling the pain of the buyers’ inability to get in; new mortgage rules are good in a general sense, but not making it any easier for would-be buyers. Still, we need more housing and it will bounce back and get absorbed faster from the buying public.

The condo market remains robust, although pricing has crept up significantly in recent years. Pricing is still well below the average freehold home that’s out there for the taking. Look for continued interest on all of the condo apartment projects that get launched or reintroduced to the market. While the builders have to protect themselves for the future by building in anticipated increases in costs of all kind, the market remains competitive and perhaps more of a buyers market than we’ve seen in some time. Lots of great choices are expected; make sure you do your homework and see what’s out there before you buy.

Winlock townhomes
Winlock townhomes

Look for some hidden gems out there as well. The urban townhome, or stacked townhome continues to grow in popularity. For those who want more space than a typical highrise condo, yet less than, a typical detached house, these fall nicely in the middle. There are lower maintenance fees and a larger space spread out over two or three floors, separating the living areas from the sleeping areas, all the bells and whistles you’ll find in our highly competitve marketplace and, perhaps most importantly to many, certainty as to timing. Builders can start them earlier as the presale requirements are smaller; the buildings or clusters of buildings have far fewer units than a typical highrise. And the construction process is simpler and much shorter. This provides more certainty as to when they will start and, more importantly, when they will be completed.

Some of these new townhome opportunities are presenting themselves in prime locations, places you never thought had any room for more development. One prime example will rise soon in the prestigious Bayview and Finch neighbourhood. Crown Communities, a company with deep roots, is introducing Winlock Towns, a collection of 30 new homes, 20 urban towns and 10 more traditional. An opportunity to live in a neighbourhood that commands very high resale values, with older product in the one, $2 million to $3 million range. Winlock offers a good selection of two- and three-bedroom plus urban and traditional townhomes starting at less than $800,000, ranging to slightly more than $1.2 million. The builder has thrown in all those bells and whistles, with over height ceilings, the best in finishes, appliances, free parking and, unlike many of the townhomes on the market old and new, concrete construction. All this, right in the heart of an established neighbourhood, minutes from Bayview Village, Fairview Mall, North York Centre and public transit, GO, the 400 highways and everything you need. Look for this and other hidden gems this Spring. It will be an exciting one for sure.

Mark Cohen is a founding partner of The Condo Store Marketing Systems, a firm specializing in the design, marketing and sales of condo and new home communities in and outside of the GTA. condostorecanada.com mark@condostorecanada.com

SHARE  

Featured Products


cl_mar19_real_insight_fi

Behind the numbers , A deeper look into the 2018 GTA housing market

Latest News


Behind the numbers , A deeper look into the 2018 GTA housing market

The story of the GTA real estate market in 2018 was one of moderation, with improvement of market conditions in the second half of the year.

Sales, listings and average selling price were all down compared to 2017: there were 77,426 transactions (down 16.1 per cent), 155,823 new listings (down 12.7 per cent), and an overall average selling price of $787,300 (down 4.3 per cent).

In the first half of the year, it’s likely that many would-be buyers chose to delay purchasing a home due to higher borrowing costs and the new mortgage stress test, which could have contributed to the double digit decline in the number of transactions.

On the flip side, a decline in listings, contributed to increased competition between buyers looking to find a home that meets their needs. In turn, this fuelled a resumption of moderate year-over-year price growth in the second half of 2018.

It’s also true that certain segments of the market performed better than others from a pricing perspective. For instance, home prices were up slightly in the city of Toronto where a large proportion of sales were of condos. The condo market was the tightest market segment last year, with substantial competition between buyers who were searching for relatively affordable ownership housing options.

It is important to remember that TREB’s market area is made up of over 500 communities and market conditions obviously unfold differently across these communities. This is why it’s important to work with a professional TREB member realtor who is familiar with local market conditions in your areas of interest.

For information on the GTA real estate market in 2018 and in December, check out the infograph accompanying this article

GARRY BHAURA is president of the Toronto Real Estate Board, a professional association that represents 48,000 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. If commercial property is what interests you, contact a TREB realtor by visiting TREBcommercial.com.

SHARE  

Featured Products


Arie-Buzilo_fi

GTA moving into balanced market for 2019

Latest News


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.

SHARE  

Featured Products


EDITOR'S CHOICE: Podium Developments

New home buying opportunities abound in Oshawa and Durham Region

Latest News


New home buying opportunities abound in Oshawa and Durham Region

EDITOR'S CHOICE: Podium Developments
Ironwood Towns in North Oshawa by Podium Developments and Urban Capital

Despite the bad news this week that General Motors Canada plans to close assembly operations in Oshawa, there are some good new home buying opportunities in the city and elsewhere in Durham Region.

As various levels of government and the Unifor trade union vow to somehow keep the plant open or otherwise deal with the fallout of the decision, the housing sector in Oshawa is expected to shift into a buyers’ market.

That could mean deals for buyers in a market where home prices have already been under pressure.

 

Also read: What the GM plant closure means for Oshawa economy and housing

Also read: Oshawa housing to move into buyers’ market thanks to GM closure

 

For those looking to buy a new home, know that there are still plenty of good opportunities in Oshawa and surrounding area.

First, let’s look at recent new home buying activity in the area, courtesy of statistics from Altus Group, theofficial source for market intelligence for the Building Industry and Land Development Association (BILD).

 

Total new home sales, units

Oshawa Durham Region
Annual
2013          682       2,376
2014       1,108       3,130
2015          971       3,433
2016       1,149       5,344
2017          490       2,385
Jan-Oct
2017          483       2,262
2018            83       1,065
Source:  Altus Group

 

Naturally, the GM news is a sensitive topic to an industry such as home building, where companies dedicate years to planning and construction development projects. So don’t expect a comment any time soon from BILD, the voice of home builders in the GTA, or individual companies.

Might developers at some point offer deals – be they discounts or upgrades – in order to move an unsold inventory in a market not feeling the strongest at the moment?

It never hurts to ask.

 

A selection of new home and condo inventory

Ironwood in North Oshawa, Building Capital and Podium Developments, contemporary freehold townhomes

Harmony Creek, Conservatory Group, townhomes and detached homes

Daniels FirstHome Oshawa, townhomes

Brook Phase 2, Delpark Homes, detached homes

Fields of Harmony Phase IV, Greycrest Homes, detached homes

Harmony Gate, Sundance Homes, townhomes

Kingsview Ridge, Treasure Hill, 30-, 36- and 40-ft. singles

Park Ridge, Tribute Communities, detached homes from the low $900’s

U.C. Towns 2, Tribute Communities, townhomes form the low $600’s

Top of Townline, Woodland Homes, detached homes

For more new home buying opportunities, visit MyHomePage.ca

With files from Natalie Sicilia, New Home Research Manager & Map Editor

SHARE  

Featured Products


h_dj19_home_realty_fi

Don’t Doubt The Market

Latest News


Don’t Doubt The Market

There is no shortage of demand at the launches of new projects

The GTA housing market is as robust as ever and things have been humming along quite nicely for many years now.

And yet there will always be those who believe we are doomed, that the good times cannot continue for the GTA’s hot housing market — that it’s no doubt headed for an inevitable crash.

Well, that’s just not the sentiment we’re seeing at In2ition Realty as we’ve launched a series of successful projects across the region in recent weeks.

There was certainly no shortage of demand at the launch this summer of the first tower at Universal City, a Chestnut Hill Developments master-planned community in Pickering. The project enjoys lake views and is located just minutes from the GO Transit station. It sold out in record time and a second tower of 324 units just launched last month. The interest for tower two was equally as strong.

In Port Credit, on the other side of the GTA, it was the same story with the recent launch of Tanu Condos, a 204-unit tower and townhouse project by Edenshaw Developments. We had a lineup on the first day of launch!

Truth be told, Toronto condo builders can’t launch developments quickly enough to satisfy the insatiable demand.

It wasn’t all smooth sailing for the GTA housing market in 2018, mind you. The introduction of a new stress test on mortgage applicants certainly had an impact on home sales, sidelining some buyers.

And the GTA housing market faces considerable ongoing challenges, including trade labour shortages, development approval process and timing, project cost escalation, ability to secure financing, profit margins, land availability and cost … there are tons of hurdles for the building industry to contend with.

Although sales figures are down 40 per cent from last year, a portion is from lack of supply. In 2017 we saw 128 launches in highrise condos versus 56 in 2018.

The Toronto Real Estate Board (TREB) reported a 6 per cent uptick in regional home sales in October 2018, compared to the same month a year earlier. And the average sale price of a detached home in the GTA last month was up 3.5 per cent on a year-overyear basis, to $807,340. The average sale price for a condo in Toronto was $603,153, compared to $461,013 in the 905.

Renovation spending is also at an all-time high: $12.3 billion was spent on home alterations and improvements in Ontario in the first half of 2018, according to Altus Group.

Homebuying intentions are up, as well, despite affordability and qualifying challenges. An Altus Group survey of current homeowners and current renters showed that most GTA households are saying yes, they plan to buy a home in the next year or so.

The evidence doesn’t lie. Households and investors alike see the GTA housing market as a quality long-term investment. And why shouldn’t they? A thriving and diverse regional economy and a steady stream of 100,000-plus new arrivals in the GTA each year — more migration than any other city in Canada — will keep this market strong for years to come.

Debbie Cosic, CEO and founder of In2ition Realty, has worked in all facets of the real estate industry for over 25 years.

In2ition.ca

SHARE  

Featured Products


Oshawa

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

Latest News


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

Oshawa

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

And with good reason.

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

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

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

Durham Region home prices

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

 

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

Source: Canadian Real Estate Association

 

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

Oshawa median home prices

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

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

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

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

Source: Royal LePage National House Price Composite, October 2018

 

What we can expect in the housing market

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

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

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

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

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

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

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

RELATED READING

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

New home buying opportunities abound in Oshawa and Durham Region

Focus on Whitby and Oshawa

6 Ontario municipal elections to watch regarding housing

 

SHARE  

Featured Products


Canada Outlook NEW

Canadian housing market to moderate in 2019 but growth to continue in Ontario and Toronto

Latest News


Canadian housing market to moderate in 2019 but growth to continue in Ontario and Toronto

Canada Outlook NEW

 

By Wayne Karl

Canada’s housing market should see a moderation in both housing starts and sales, while home prices are expected to reach levels that are more in line with economic fundamentals such as income, job and population growth. This forecast for 2019 and 2020 is drawn from the 2018 Housing Market Outlook from the Canada Mortgage and Housing Corp. (CMHC).

Source: CMHC Housing Market Outlook
Source: CMHC Housing Market Outlook

Nationally, CMHC’s outlook for 2019 projects total housing starts to edge down and range between 193,700 to 204,500, with the downward trend expected for both single and multi-unit starts. MLS sales are expected to be between 478,400 and 497,400 units annually while MLS prices should lie between $501,400 and $521,600.

“Our key takeaway from this year’s outlook is moderation in Canada’s housing markets for 2019 into 2020,” says Bob Dugan, chief economist, CMHC. “Housing starts are expected to decline from the higher levels we’ve seen recently. We expect resales in 2019 and 2020 to remain below recent peaks while prices should reach levels that are more in line with economic fundamentals such as income, job and populations growth.”

Ontario recovery

After dampened market activity in 2018, existing home sales and housing starts in Ontario, particularly in single-family homes, will post a partial recovery in 2019. Buyers are expected to re-enter the market on the strength of stronger than expected job growth and in-migration, before the downward trend in starts and sales resumes in 2020.

Source: CMHC Housing Market Outlook
Source: CMHC Housing Market Outlook

GTA growth

With balanced conditions prevailing in the GTA, CMHC expects moderate sales growth and home prices growing in line with inflation. The rising costs of homeownership will result in strong rental demand, while new supply will add some upward pressure on vacancy rates. Toronto buyers should see more housing choices as builders concentrate their efforts on new highrise projects.

OTHER REGIONAL HIGHLIGHTS

BRITISH COLUMBIA
Housing starts activity and MLS sales in BC should moderate, as economic and population growth slows while MLS average prices are expected to see a flatter growth profile through 2020.

Vancouver
Over the next two years, Metro Vancouver’s resale market will see lower sales, higher inventories of homes for sale and lower home prices compared with recent market highs. Through 2018, demand and home prices softened across all market segments and local geographies.

PRAIRIES
Buyers’ market conditions in Alberta and Saskatchewan should gradually shift to a balanced market with gradual improvement in economic and demographic fundamentals. Balanced market conditions in Manitoba are expected to continue.

Calgary
Various factors will push and pull the demand for housing in Calgary in 2019 and 2020. Calgary’s economy will experience stronger growth in population and employment. This will help support demand and lift sales in 2019 and 2020. However, the average MLS price will continue to face downward pressure but is expected to stabilize in 2019 and modestly rise in 2020.

QUEBEC
Housing starts and sales of existing homes will both be sustained, however, slower economic growth and rising borrowing costs will moderate activity through 2020. Starts will continue to be dominated by the apartment market segment, while demand for resale single-detached homes will remain relatively strong.

Montreal
In 2018 and 2019, rental housing demand will increase slightly faster than supply in Montreal, which will put some downward pressure on the vacancy rate. Demand will be supported by rising net migration over the forecast horizon.

ATLANTIC CANADA
The Atlantic region will see sustained activity, notably in Nova Scotia, where existing home sales and average prices should trend higher while rental demand will drive growth in apartment construction.

RELATED READING

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

 

 

SHARE  

Featured Products