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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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ReMax Housing Market Outlook Report

Ontario markets expected to continue to lead home price growth in 2020

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Ontario markets expected to continue to lead home price growth in 2020

ReMax Housing Market Outlook Report

Housing markets in Southern Ontario will lead in home price growth this year, and are expected to continue to do so in 2020, according to a new report from ReMax.

ReMax is expecting a leveling out of the highs and lows that characterized the Canadian market in 2019, particularly in Vancouver and Toronto, as we move into 2020. Healthy price increases are expected next year, with the ReMax 2020 Housing Market Outlook Report estimating a 3.7 per-cent increase in the average residential sales price.

Some regions in Ontario continue to experience higher-than-normal year-over-year gains from 2018 to 2019, including London (10.7 per cent), Windsor (11 per cent), Ottawa (11.7 per cent) and Niagara (12.9 per cent).

“Southern Ontario is witnessing some incredibly strong price appreciation, with many regions still seeing double-digit gains,” says Christopher Alexander, Executive Vice-President and Regional Director, ReMax of Ontario-Atlantic Canada. “Thanks to the region’s resilient economy, staggering population growth and relentless development, the 2020 market looks very optimistic.”

As more Canadians have adjusted to the mortgage stress test and older Millennials move into their peak earning years, it is anticipated that they will drive the market in 2020, particularly single Millennials and young couples. A recent Leger survey conducted by ReMax found that more than half (51 per cent) of Canadians are considering buying a property in the next five years, especially those under the age of 45.

Ontario leading the way

Toronto is set to experience a strong housing market in 2020. Lower unemployment rates, economic growth and improved overall affordability in the GTA are expected to drive the market forward. ReMax is forecasting average sale price growth for 2020 of six per cent, two points higher than the increase from 2018 ($835,422) and 2019 ($880,841 ). While Toronto is experiencing a busy construction season this year, housing supply still falls short of the demands of the city’s rapidly growing population.

ReMax Housing Outlook Report

 

Cities such as Ottawa and Windsor are seller’s markets, showing substantial increases in average residential sale price at 11.7 and 11 per cent, respectively. This strong growth is expected to continue into 2020, with Ottawa’s new LRT system impacting surrounding development and Windsor’s continued affordability attracting young professionals to the area. Buyers are also not burdened by the mortgage stress test, as they were in 2018, ReMax says.

The Niagara region is also showing strong growth, with average residential sale price increasing almost 13 per cent, from $378,517 in 2018 to $427,487 in 2019. Value-conscious consumers from the GTA are buying in droves, with many choosing to live in the region and commute to Toronto.

REGIONAL HIGHLIGHTS ACROSS CANADA:

BC

Consumer confidence in regions such as Vancouver West in early 2019 was extremely low and remained relatively shaky throughout the year, resulting in an average residential sale price drop of 7.5 per cent, from $2.27 million in 2018 to $2.10 in 2019. However, consumers have acclimatized to the mortgage stress test, and confidence has begun to return and will prevail in 2020, with prices expected to rise four per cent.

ReMax Housing Outlook Report

Fraser Valley also experienced a price drop of almost four per cent year-over-year, from $724,740 to $696,502. However, the region is also expected to witness substantial growth, particularly in downtown Surrey, due to the high number of real estate developments catering to businesses and educational institutions. First-time buyers are expected to drive the market in 2020 due to the relative affordability of the region compared to Vancouver proper.

“The drop in sales in some key British Columbia markets represents the last of the ‘down’ market spillover from 2018,” says Elton Ash, regional executive vice-president, ReMax of Western Canada.

“Consumer confidence is poised for a comeback, leading to more healthy and sustainable growth, as more buyers come to terms with the stress test and interest rates are unlikely to increase in any meaningful way in 2020.”

Prairies

ReMax Housing Outlook Report

Alberta continues to experience slowing economic conditions, leading to a decrease in average residential sale prices in Calgary, from $478,088 in 2018 to $460,532 in 2019. Condos are the easiest way for first-time homebuyers to get into the market, with starter units going for as low as $150,000. While the city’s unemployment rate continues to remain high compared to the rest of Canada, the population is increasing, with more people moving to the city from other parts of the province.

Winnipeg, on the other hand, has shown a small increase in average residential sale price, both for freehold and condominium properties, by 1.5 and 0.8 per cent, respectively. Immigration to the city, in combination with reasonable prices and ample supply, is expected to drive sales going into 2020.

Atlantic Canada

ReMax Housing Outlook Report

Halifax, NS and Saint John, NB have experienced solid price appreciation of six and five per cent, respectively. Affordability continues to attract many buyers in the region, most of whom are buying single-detached homes. At the same time, the region’s condominium market is being driven by retirees. Conversely, the market in St. John’s, Nfld. is expected to recover in 2020, with increased consumer confidence expected to bring about stabilization. However, the city’s aging population and high rate of outbound migration is expected to have an impact on housing market activity at some point.

RELATED READING

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

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Lessons from Tokyo

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Lessons from Tokyo

Exploring how other cities and countries approach housing, planning and development can often provide us with insight to enable us to better meet the housing needs of the residents of the Greater Toronto Area (GTA). In early June, a Building and Land Development Association (BILD) delegation visited Tokyo and came away with quite a few impressions.

The population of the city of Tokyo is just shy of 10 million people and the population of the Greater Tokyo Area is approximately 38 million with a population density of 6,158 people per sq. km. This would be compared to Toronto’s three million and the GTA’s 6.4 million with a population density of 4,457 people per sq. km. So, while we have challenges in the GTA you can you can well imagine the magnitude of the task of housing, moving and providing places to work, shop and play for 38 million residents.

One of the first impressions of Tokyo is the transportation infrastructure. It is simply humbling to behold. Thirteen subway lines carry 8.7 million riders daily, by elevated trains and mono-rails, an integrated commuter rail system that fans out from multiple stations to all corners of the region and tripled stacked highways that snake through the heart of the city and bypass sensitive areas with tunnels. It’s enough to leave the average Ontarian with infrastructure envy. Tokyo makes it work. Their transportation system is efficient and it’s amazing.

The second impression is the typical built form for housing. There is literally housing that we refer to as missing middle in the GTA, everywhere in Tokyo. Midrise apartment buildings are the dominant housing type; the average building is about eight stories high and is spread throughout the neighbourhoods and regions of Tokyo. In the GTA, we refer to this type of housing as the “missing middle” because of the almost total absence of this type of housing that includes stacked townhomes and midrise buildings. The key feature of this type of housing is its ability to provide gentle density and increased housing supply when land is at a premium.

The third lesson is how transportation infrastructure and housing work together seamlessly. Homes are built near transit stations that form hubs around neighbourhoods. Everything is within walking distance of rapid transit of one form or another and balances the impact of the movement of people between automobiles and public transportation. While traffic congestion occurs, it’s nowhere near what we experience across the GTA on a daily basis.

Lastly, is the approach of the Japanese toward land use and built forms. At the risk of gross oversimplification, land use is flexed to requirements and when needs change so too do the buildings, torn down and rebuilt to accommodate a differing or changing need. It means there is change in housing stock, urban renewal and the concept of a “stable neighbourhood” like we have in Toronto doesn’t generally exist.

There are many lessons to take from Tokyo, and as our region’s population grows by almost 40 per cent through 2041, these lessons should be kept in mind as the GTA plans to house these people in the future.

DAVE WILKES is President and CEO of the Building Industry and Land Development Association (BILD).

bild.ca

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Hombuyer incentives web

Federal government releases details on homebuyer incentive programs unveiled in Budget 2019

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Federal government releases details on homebuyer incentive programs unveiled in Budget 2019

 

Hombuyer incentives web

The federal government has released the details of the first-time homebuyer incentive programs promised in March in the 2019 budget.

Beginning Sept. 2, 2019, the First-Time Home Buyer Incentive will help middle class families take their first steps towards homeownership by reducing monthly mortgage payments required for first-time homebuyers, without increasing the amount they need to save for a down payment. This program complements other measures taken in Budget 2019 to support first time homebuyers with their down payment such as increased RRSP withdrawal limit from $25,000 to $30,000 The government has allocated $1.25 billion over three years for the program. The incentive will be available to first-time homebuyers with qualified annual household incomes up to $120,000.

Budget 2019 also previewed the Shared Equity Mortgage Provider Fund, a five-year, $100-million lending fund to assist providers of shared equity mortgages to help eligible Canadians achieve affordable homeownership. This will support an alternative homeownership model targeted at first-time homebuyers, help attract new providers of shared equity mortgages and encourage additional housing supply. The fund will launch on July 31, 2019, and will be administered by CMHC.

 

ALSO READ: Budget 2019 comes up short

ALSO READ: How the Liberals missed the boat on affordable housing

“Through the National Housing Strategy, more middle-class Canadians – and people working hard to join it – will find safe, accessible and affordable homes,” says Jean-Yves Duclos, Minister of Families, Children and Social Development and Minister Responsible for CMHC.“Our proposed measures will reduce the monthly mortgage for your first home by up to $286. This will mean more money in the pockets of Canadians and will help up to an estimated 100,000 families across Canada.”

First-Time Homebuyer Incentive facts

  • Canada’s First-Time Home Buyer Incentive will help qualified first-time homebuyers purchase their first home as the incentive reduces their monthly mortgage payment, without increasing the amount that they must save for a down payment. The program will launch on Sept. 2, 2019, with the first closing on Nov. 1, 2019.
  • The incentive will allow eligible first-time homebuyers who have the minimum down payment for an insured mortgage with CMHC, Genworth or Canada Guaranty, to apply to finance a portion of their home purchase through a form of shared equity mortgage with the Government of Canada.
  • For the purchase of an existing home, an incentive amount of five per cent may be available. For the purchase of a newly constructed home, an incentive amount of five or 10 per cent may be available.
  • Doubling the incentive for purchasers of new homes encourages new housing supply.
  • No on-going repayments are required, the incentive is not interest bearing and the borrower can repay the incentive at any time without a pre-payment penalty.
  • The buyer must repay the incentive after 25 years, or if the property is sold.

 

These details confirm that the First-Time Home Buyer Incentive program will be an ownership stake in the property of qualified homebuyers, whereby the government will participate in appreciation of the property and – in the case of the property devaluing – depreciation as well.

“The key issue remains qualifying, and this program diminishes the amount that a first-time homebuyer can qualify for by about 15 to 20 per cent,” says James Laird, co-founder of Ratehub Inc. and president of CanWise Financial. “This is because the program limits the mortgage amount to four times the households’ income, whereas those not participating in the program can actually qualify for a mortgage that is 4.5 to 4.7 times their income. Household income for qualified homebuyers is also capped at $120,000.”

Those who would be attracted to the program would be Canadians who are trying to purchase at their maximum qualification, Laird adds. “However, because the program diminishes how much they can qualify for, it doesn’t serve the needs of the group it is targeted at. Canadians can get a larger loan by not participating in the program.”

 

Maximum affordability calculations

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 monthly mortgage payment.

The maximum purchase price for the same household, if they participate in the First-Time Home Buyer Incentive program, drops to $404,858 with a five-per-cent minimum down payment. The total mortgage amount would then be $400,000 (or four times their household income).

Source: Ratehub.ca 

 

Mortgage payment calculations

If the household took a five-pre-cent incentive from the government (for resales), their mortgage amount goes to $378,947, and monthly payment is now $1,810.
If the household took a 10-per-cent incentive from the government (for new homes) their mortgage amount goes to $357,894 and  monthly payment is now $1,710.

Source: Ratehub.ca 

 

 

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Development in the GTA

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Development in the GTA

Recently I completed 16 months as the President and CEO of the Building Industry and Land Development Association of the Greater Toronto Area (BILD). With 1,500 member companies, BILD GTA is amongst the largest local home building associations in Canada, and with the level of residential and commercial construction occurring across the region, the time has flown by. A consistent occurrence during this period, however, has been the number of questions I get from members of the public about development and homebuilding in the region. Residential and commercial construction is highly visible, cranes dot the skyline from Mississauga to Pickering, and so it’s only natural that residents want to know what’s happening in their communities and why change is occurring. They have questions, such as “Is all this development necessary?” (Yes, we have a housing shortage in the GTA), “Who decides what gets built where?,” “Why in my neighbourhood?,” and perennially “Why is new development so dense?”

After all, that is a primary role of an industry association, to act as conduit between media, the public and the industry. Invariably, two things come out of these interactions. The first is that we get a better understanding and appreciation of the perspectives, concerns and questions of the nearly seven million residents of the region. We use this to inform our communications, columns, and interviews, as chances are the perspectives and questions are more broadly shared. In fact, we often reflect these perspectives in our interactions with municipal and provincial governments. The second is, in our responses we are able to provide answers and information. The development and construction process is complex, lengthy and highly regulated, and more often than not these inquiries are informed by perceptions and information people have gathered through the “grapevine.” Following our interactions, BILD GTA frequently receives a follow-up thanking us for the response, indicating we provided information that was not previously known. While the interaction may not change the concerns that gave rise to the inquiry in the first place, it always leads to a more informed discussion and debate.

The reality is that while the pace of development will ebb and flow year to year with economic cycles and other factors, the long-term trajectory will be for more residential and commercial development across the region. With the population of the GTA expected to grow 40 per cent by 2041 or approximately 115,000 new residents every year, providing places for all these new residents to live, work and play will require a concerted and prolonged development effort. This will require unprecedented levels of co-ordination and partnership between all levels of government, the industry and residents, and key to that is informed discussion and debate. The past 16 months have gone by in the blink of an eye, and I look forward to continuing to work with this dynamic industry for many years to come. Please keep asking us your questions and we will continue to answer them to the best of our ability. Together, we can have constructive dialogue that ultimately helps to inform and shape our region as it assumes its rightful place as a world class city.

DAVE WILKES is President and CEO of the Building Industry and Land Development Association (BILD). Bild.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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Arie-Buzilo_fi

GTA moving into balanced market for 2019

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GTA moving into balanced market for 2019

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

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

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

Glass half full

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

Also read: GTA home prices continue to rise

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

Also read: GTA condo sales and prices hit record levels

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

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

Rising rates

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

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

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

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EDITOR'S CHOICE: Podium Developments

New home buying opportunities abound in Oshawa and Durham Region

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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

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Toronto Oct 25 18

GTA new home market shows some improvement in September

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GTA new home market shows some improvement in September

Toronto Oct 25 18

The GTA new home market saw increases in September over the previous month, both in terms of new project openings and new home sales, particularly sales of condominiums, according to the Building Industry and Land Development Association (BILD).

There were 1,747 new homes sold in September, according to Altus Group, BILD’s official source for new-home market intelligence – a sizeable increase over August’s 974 new home sales. Condominiums in low-, medium- and highrise buildings, stacked townhouses and loft units accounted for 1,494 new home sales in September, down 20 per cent from September 2017 and down 20 per cent from the 10-year average. Single-family home sales, with 253 detached, linked and semi-detached houses and townhouses (excluding stacked townhouses) sold, were down 28 per cent from last September and down 77 per cent from the 10-year average.

MORE PROJECT OPENINGS

With 10 condominium apartment projects and seven single-family home projects opening in September – a significant increase from August’s two project openings – remaining inventory increased to 13,952 units, comprised of 8,820 condo apartment units and 5,132 single-family units. Remaining inventory includes units in preconstruction projects, in projects currently under construction, and in completed buildings.

“It appears more buyers – and builders – are starting to come in from the sidelines,” says Patricia Arsenault, Altus Group’s executive vice-president, Data Solutions. “The increase from August in both new condominium apartment sales and the number of units in new projects launched was somewhat stronger than the typical September bump alone would suggest.”

NEW HOME SUPPLY

David Wilkes, BILD president and CEO, says it’s all welcome news, but points out that consumers still lack a range of options in the new home market, due to lack of supply. The 8,820 units remaining in the condo apartment inventory represent about five months’ worth of inventory, based on the pace of sales in the past 12 months. A healthy new home market should have nine to 12 months’ worth of inventory.

This shortfall in the supply of condominiums partly accounts for the closing gap between the prices of condos and single-family homes in the GTA. In September, the benchmark price for condo apartments rose again, to $789,643, up 19.4 per cent over the last 12 months. The benchmark price for single-family homes softened again to $1.12 million, down 7.1 per cent over the last 12 months.

MUNICIPAL PARTNERS

“In the lead-up to the municipal elections, BILD succeeded in raising housing supply and affordability as major election issues,” says Wilkes. “Now we look forward to working with our municipal partners to address the barriers that stand in the way of building the housing our region needs to accommodate growth. Some straightforward steps include making sure that government charges on new homes are fair, funding and building critical infrastructure, cutting red tape and speeding up building permits and inspections.”

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Toronto vote

Municipal candidates aware of housing needs – TREB poll

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Municipal candidates aware of housing needs – TREB poll

Toronto vote

With municipal elections only days away, the Toronto Real Estate Board (TREB) has released recommendations on what newly elected councillors, mayors, and regional chairs across the Greater Toronto Area (GTA) can do to ensure housing affordability and choice for homebuyers and renters.

TREB also released the results of responses received from more than 200 municipal election candidates from across the GTA. Candidates were asked to respond to a TREB survey asking for their views on key housing issues that are the subject of TREB’s recommendations.

Both the policy briefs and candidate survey responses can be viewed at UnlockMyHousingOptions.com

“A recent poll conducted by Ipsos Public Affairs showed that housing affordability was a top-of-mind issue for voters in this election,” says TREB President Garry Bhaura. “Housing affordability is a priority for voters, and they want it to be a priority for the incoming municipal councils. Based on the candidate survey responses that TREB received, it appears that housing affordability is also a priority for many candidates.”

SURVEY HIGHLIGHTS:

  • 95 per cent of responding candidates in Toronto, and 86 per cent of responding GTA candidates, indicated that, if elected, they would advocate for updating municipal zoning by-laws and policies to encourage more medium density housing.
  • 85 per cent of responding Toronto candidates indicated that they would be willing to consider reforms to the Toronto Land Transfer Tax to adjust it for inflation; 84 per cent of responding GTA candidates indicated that they would, if elected, oppose proposals for any new municipal land transfer tax.
  • 85 per cent of responding Toronto candidates, and 79 per cent of responding GTA candidates, indicated that they would support efforts to reduce planning approval times and red tape to facilitate new housing supply.
  • 97 per cent of responding Toronto candidates, and 96 per cent of responding GTA candidates, indicated that they would, if elected, advocate for funding from senior levels of government for infrastructure investments.

MISSING MIDDLE

TREB has also released three new policy briefs on “missing middle” housing supply, housing-related municipal red tape, and infrastructure needs for housing supply, in addition to a brief issued earlier in the campaign on the impact of municipal land transfer taxes. TREB’s recommendations call for newly elected municipal councils to support the creation of much needed housing supply and options.

TREB is calling on councils to:

  • Review municipal zoning by-laws and consider changes to allow for more mid-density development such as townhomes.
  • Resist community opposition and work with neighbourhoods  by improving communication strategies to articulate the ability of mid-density developments to be seamlessly integrated into existing neighbourhoods.
  • Prevent any new municipal land transfer taxes in the rest of the GTA.
  • Reform the Toronto Land Transfer Tax to adjust the first-time home buyer rebate, and the threshold price at which the higher tax rate kicks in, for inflation, so both keep pace with the current average home price in Toronto now sitting at around $800,000.
  • Conduct reviews of municipal planning approval processes for new housing applications with a goal of streamlining and shortening the process.
  • Recognize the importance of infrastructure as it relates to housing supply and affordability, and move ahead with critical projects and investments such as regional transit as a key part of strategies targeted to addressing housing needs.

 

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