Tag Archives: Real Insight

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The July 2019 GTA housing market

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The July 2019 GTA housing market

With 8,595 sales reported through TREB’s MLS System in July 2019, up 24.3 per cent on a year over year basis, it’s clear that demand for ownership housing has certainly strengthened and that more buyers are coming online after coming to terms with the OSFI mortgage stress test over the course of the last year-and-a-half.

Yet, with new listings growth lagging far behind sales at just a 3.7 per cent when compared to this time last year, it’s clear that market conditions are tightening and we’re beginning to see a case of growing pent-up demand with more competition between buyers in many neighbourhoods.

Increased competition between buyers has resulted in stronger price growth for many home types. In July, the average selling price increased by 3.2 per cent to $806,755 compared to July 2018.

Building more housing key to addressing affordability issues

The disparity between demand and supply is creating pent-up demand for ownership housing increase as well. This is largely the result of GTA residents continuing to see homeownership as both a goal and a sound long-term investment on the one hand, and need for GTA housing supply sitting at 40,000 to 50,000 each year due to strong population growth on the other hand.

As more buyers come back to the market in the coming months and years, we could end up with a marketplace that is chronically undersupplied and price growth reaching unsustainable levels. It is encouraging that both the City of Toronto and the provincial government are working on ways to address our housing supply issue and meet pent-up demand head-on.

For instance, a recent motion by Mayor John Tory has given City staff a strong mandate to report back on how to develop a greater diversity of housing options in traditional single-family neighbourhoods, including timelines. Similarly, the provincial government has launched consultations to spur on and speed up the development of different forms of housing in conjunction with its More Homes, More Choice Plan.

A focus on different forms of housing is key; we’re seeing price growth become increasingly driven by higher density lowrise home types, yet these are not the types of houses that have been commonly constructed over the past two decades.

With consumer preferences changing, in part due to the impact of the mortgage stress test, we need to see the development of a greater diversity of mid-density housing. With the recent announcements from the City of Toronto and Province of Ontario in mind, it seems that government policy is heading in the right direction.

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

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Stress test should be reviewed

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Stress test should be reviewed

Greater Toronto Area realtors reported 7,187 residential sales through TREB’s MLS System in March 2019. This result was inline with 7,188 sales reported in March 2018. For the first quarter of 2019, sales were down by one per cent compared to Q1 2018.

While March and Q1 sales remained relatively flat compared to last year, new listings have declined moreso than sales. March new listings were down by 5.1 per cent year-over-year and Q1 new listings were down by 1.5 per cent.

The OSFI stress test continues to impact home buyers’ ability to qualify for a mortgage. TREB is still arguing that the stress test provisions and mortgage lending guidelines generally, including allowable amortization periods for insured mortgages, should be reviewed. The supply of listings in the GTA also remains a problem. Bringing a greater diversity of ownership and rental housing online, including “missing middle” home types, should be a priority of all levels of government.

I asked TREB’s CEO John DiMichele to share his thoughts regarding the City’s Action Plan.

“While the City of Toronto’s recently announced Housing TO – 2020- 2030 Action Plan is exciting and commendable, and we look forward to contributing solutions as a member of the External Advisory Committee, the recently proposed increase to the Municipal Land Transfer Tax on higher priced properties is problematic. As the recent city budget process showed, the MLTT is not a sustainable revenue source from which to fund municipal programs. On top of this, additional MLTT on higher priced homes could have a trickle-down effect on the supply of homes throughout the housing price continuum,” said DiMichele.

As for the MLS Home Price Index Composite Benchmark, it was up by 2.6 per cent year-over-year in March, while the average price for March sales was up by a lesser annual rate of 0.5 per cent to $788,335. The average selling price for Q1 2019 was up by 1.1 per cent yearover- year.

To summarize, market conditions have remained tight enough to support a moderate pace of price growth. Despite sales being markedly lower than the record levels of 2016 and early 2017, the supply of listings has also receded. You can stay up to date on the GTA real estate market by following us on social media, or visit trebhome.com for GTA listings updated in real time.

Garry Bhaura is president of the Toronto Real Estate Board. 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.

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Breaking down the GTA housing market in 2019

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Breaking down the GTA housing market in 2019

This year has gotten off to a good start with sales, listings and price all up on a year-over-year basis. This is encouraging, especially when the inclement weather experienced in the GTA on the last week of the month is considered.

There were 4,009 home sales in January 2019, up 0.6 per cent and listings were up 10.5 per cent with 9,456 homes listed on TREB’s MLS system in January. While the average selling price was up by 1.7 per cent on a year-over-year basis, after preliminary seasonal adjustment the average selling price edged lower when compared to the previous month.

One trend to keep an eye on as we move through 2019 is stronger price growth for higher-density lowrise (such as condo townhomes, duplexes) and condominium apartment home types.

As the market experiences increasing affordability pressures, it is likely that many of those looking to buy a home will prefer to purchase these often lower-priced home types. Much of the affordability pressure we are seeing in the GTA has been driven by the OSFI mandated two percentage point mortgage stress test, a provision TREB is urging the government to revisit with an eye toward more flexibility.

A BROADER LOOK AT THE GTA HOUSING MARKET THROUGH TREB’S MARKET YEAR IN REVIEW & OUTLOOK REPORT 2019

On Feb. 6, TREB released its Market Year in Review & Outlook Report. While you can download a copy of the report from trebhome.com, I want to highlight some of the exciting contents and ground-breaking research contained in this year’s issue.

The report takes an in-depth look at the market in 2018 and provides a forecast for 2019. The analysis is punctuated by TREB-commissioned Ipsos surveys of existing homeowners and intending buyers, and helps to predict what 2019 will look like in terms of sales and price. It also shines the spotlight on issues ranging from preferred home types to the impact of the new mortgage qualification guidelines on buying intentions. The report also breaks down the rental market, the commercial market, and the new homes and residential land sectors.

This year’s report focused on envisioning housing options and supply for livable communities and features TREB-commissioned research on transit supportive development from the Pembina Institute and a study on missing middle housing from Ryerson University’s Centre for Urban Policy and Land Development.

The effects of transit-supportive development are highlighted by two real-life case studies – at Long Branch and Pickering GO Stations – and show that housing built within a 10-minute walk of a transit station, and in areas that feature a balanced mix of housing, jobs, shopping and services, can result in potential housing and transportation savings ranging from 10 to 56 per cent for individuals, families and retirees.

The Ryerson University Centre’s research offers some workable ideas on how to create more missing middle housing, which could fill the gaps in the types of homes needed and positively impact affordability. The study shows that there is plenty of opportunity to build this type of housing and that doing so could result in savings of between 20 to 49 per cent.

Garry Bhaura is president of the Toronto Real Estate Board. 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.

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Real Insight: Investing In Yourself

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Real Insight: Investing In Yourself

Owning your own home is one the key determinants of economic and social well being

Owning a home is a sound long-term investment financially and emotionally, from building your wealth to giving you a sense of community. If your home investment is your principle residence, price gains are exempt from capital gains tax. Furthermore, it can also be part of your retirement investment and help grow your nest egg.

Homeownership and housing affordability are two of the key determinants of economic and social wellbeing.

Stable housing provides a foundation for parents’ employment stability and income, children’s educational attainment and a family’s health and civic engagement. Access to homeownership can help families build equity over time, which allows them to save for future life investment goals such as education, health, etc.

And owning your home goes beyond your front door — it means contributing to and becoming part of a vibrant community. TREB supports more than 60 shelter-based initiatives throughout the GTA through contributions and fundraising events. In fact, TREB members recently volunteered and raised $150,000 to help build a new home for a local family at Habitat for Humanity GTA’s build at 140 Pinery Trail in Scarborough.

Your home is also an emotional investment; it provides you with the backdrop for all of life’s most important events, where you gather with friends and family to make lasting memories.

Homeownership is one of the largest financial decisions you will make and, in today’s market, homebuyers and sellers need an advantage. Look to a TREB member realtor, who will use their expertise and knowledge to provide the edge you need while moving through the buying or selling process.

Tim Syrianos 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.

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Real Insight: Treb Working With Province To Ensure Greater Efficiency

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Real Insight: Treb Working With Province To Ensure Greater Efficiency

TREB is demonstrating its commitment to consumer protection and efficiency for real estate transactions in meetings with the Ministry of Government and Consumer Services.

TREB has met multiple times with Ministry officials to provide input on their ongoing consultations regarding potential changes to the Real Estate and Business Brokers Act, 2002.

We are happy to work with the Province to ensure that the rules governing the real estate industry are modernized and adjusted to ensure consumer protection and an efficient marketplace for real estate professionals and the public. We also believe that consumers deserve to be treated with fairness, honesty, and integrity when purchasing a home, often the biggest financial decision in most people’s lives.

Phase One of the current provincial review is focusing on issues associated with multiple representation situations, consumer understanding of real estate transaction agreements, and penalties for unethical behaviour.

TREB supports, in principle, the proposal to move towards a mandatory designated representation model. This approach is consistent with numerous other Canadian jurisdictions, and we believe that it will allow for the efficient operation of the marketplace, while ensuring consumer protection.

Under Mandatory Designated Representation (MDR) that the government is proposing, where a circumstance arises that a buyer and seller are represented by the same real estate brokerage, the brokerage would be required to designate different representatives from that brokerage to represent each client. A salesperson/broker within a brokerage would be prohibited from representing both the buyer and the seller, or more than one buyer, in the same trade with limited exceptions such as a private arrangement between family members or there are a small number of registrants in areas serving a small market or community.

However, TREB is advocating that there should also be provisions (transactional representation) to allow for consumer choice in how and by whom they are represented when working with their brokerage and licensed representative. Transactional Representation will be an option when a representative is representing both a buyer and seller in the same potential transaction with their consent. Three options will be presented to the consumer: unrepresented; represented by another representative for that transaction; or Transactional Representation.

Transactional representation eliminates the ability for a representative to represent both clients by restricting the services they can offer to both a buyer and seller. If they consent, the representative becomes an impartial facilitator.

The vast majority of TREB Members are ethical and comply with the Real Estate and Business Brokers Act. There should be a review for consistency in enforcement and disclosure of fines and penalties. Any actions in this area should be evidence-based. With this in mind, we look forward to continuing to work with the Province on all aspects of this and other important issues such as raising educational standards and requirements.

TIM SYRIANOS 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.

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Real Insight – Downsizing May Upsize Your Bank Account

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Real Insight – Downsizing May Upsize Your Bank Account

But weigh the pros and cons before making the big move

Downsizing is on the minds of many these days. Maybe it’s the changing demographics as baby boomers become empty nesters and look for a smaller home; or maybe it’s the market as supply continues to dwindle for detached and semidetached home types. Whatever it is, downsizing is a delicate balancing act and it’s important to consider the tradeoffs before you choose to relocate.

Perhaps the most obvious benefit of downsizing is the financial one. In today’s GTA housing market, there may be a good chance that you’ll be able to sell your home at a premium, freeing up cash for retirement, travel, etc. Downsizing may even afford you the luxury of buying your next home mortgage-free, giving you financial breathing room through your golden years.

Aside from the financial payout downsizing may afford, there are also potential positive lifestyle changes in store. Perhaps you’ll relocate to a condo in a convenient, walkable area. With groceries, restaurants and theatres at your doorstep, condo living in the heart of a city can be quite attractive. Plus, living in a condo can afford you a simpler life, with security in the building and less home maintenance being some of the attractive pros. Or, maybe you’ve always dreamed of a simpler life far outside the city and can’t wait to indulge in a vacation lifestyle year-round.

Downsizing is good for the GTA housing market as a whole as well. Selling your home could help offset the supply/demand imbalance we’re currently seeing in the marketplace.

Of course, financial gain and a more convenient and relaxing lifestyle seem like great reasons to downsize, but many people rush into the decision motivated by these factors without considering the trade-offs. I believe it’s critical to understand what it is you may be giving up before you take the plunge.

Downsizing can be a real culture shock. After so many years living in a big home that’s in a familiar area and close to all your friends, family and favourite shops and services, changing your location can be a bit unnerving. While it could be the right decision for you, it’s important to understand how it may impact your life when making such a decision.

For instance, when you downsize you may have to face a decision to part with some of your valuables, collections and treasures. If you’re considering moving outside of your current neighbourhood, how much distance will you and your family/friends have to travel when getting together, and will you have the space to house and entertain them when they come to visit?

So, before you take the next step in your downsizing adventure, think about what it means to adapt to a new lifestyle. Weigh the positive and negatives and be open and realistic about your expectations. A professional TREB member realtor has helped many with this type of decision and may offer you the insight and advice you need to help you make that decision.

For updates on the real estate market, visit TREBHome.com. If commercial property is what interests you, contact a TREB commercial realtor by visiting TREBCommercial.com.

Larry Cerqua is president of the Toronto Real Estate Board, a professional association that represents 45,000 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.

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Real Insight : What To Expect When You’re A New Homeowner

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Real Insight : What To Expect When You’re A New Homeowner

Becoming a homeowner can sometimes feel overwhelming and the process may cause you to overlook some key chores. These recommendations come from the experiences that I’ve encountered with my clients over the years, and I hope they help you in the moving process. Good luck!

CHECK IN WITH THE SELLER

Before the moving process begins, you may have questions about your new home and the sellers are most likely the best people to fill you in on some of the questions I’ve posed below. They’ll also be able to leave behind important information and documents, including manuals and service records for appliances and utilities.

UPDATE YOUR INFORMATION

One of the first things you might want to do is to go to notify everyone of your change of address. That way you will avoid missing any bills or important pieces of mail.

Book an installation appointment with your cable, phone and internet providers to avoid any interruptions in your service. Once you inherit the keys, don’t forget to ask that they be labelled; it will help with not having to guess which key is for what. You also may want to change the locks for added peace of mind.

GET TO KNOW YOUR HOME

Learn where to locate the shut-off valve, hoses, window screens, etc. Inherited an alarm system? Learn the code and how to arm and disarm it. Find out how to maintain a pool or hot tub, and don’t forget to check when garbage day is. After all, you’re going to have a lot of stuff you’ll need to get rid of. If you have pets, check the fence lines at your new home to make sure they’re secure.

CAPITALIZE ON AN EMPTY SPACE

After the sellers move out, you have an empty space to capitalize on. You may want to take advantage and give the place a thorough cleaning, or measure all rooms to ensure that your furniture can fit (don’t forget to measure the doorways). This might also be the perfect time to undergo any renovation projects you had in mind. From applying a fresh coat of paint, to installing hardwood, or undergoing a full kitchen makeover, you may not find a better time to accomplish these tasks.

I hope these tips help you in your transition to your new home. If you have further questions about the moving process, talk to your Toronto Real Estate Board member realtor.

Larry Cerqua is president of the Toronto Real Estate Board, a professional association that represents 45,000 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.

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