Tag Archives: Re/Max

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The Power Seat – building industry CEOs call for government change

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The Power Seat – building industry CEOs call for government change

The Power Seat is a new feature series in which we put one pointed question to a select, specific audience.

We asked CEO level executives among the homebuilding community:

“You have been invited to a meeting with representatives of municipal, provincial and federal governments, and it’s your turn to speak. What do you say to them?”

Joe Vaccaro
CEO, Ontario Home Builders’ Association

This year is one of continual growth, which presents the opportunity to respond to the current and future challenges Ontarians face. All levels of government project an increase in Ontario’s population of 2.6 million #homebelievers by 2031. Change is where need meets opportunity.

We need more housing supply and choice across Ontario, and that means housing can be a cornerstone solution to climate change, the employment skills gap and the economy. Instead of viewing growth as a problem, let’s view it as the change opportunity for the type of future, communities and neighbourhoods that Ontarians want to call home.

*****  *****
 

Dave Wilkes
President and CEO, BILD

All three levels of government need to work collaboratively, rather than in silos, and with one agenda, rather than competing ones. With a housing affordability and supply problem impacting the GTA, we need solutions-oriented collaboration.

We need to make it simpler to bring new homes to market by streamlining the process, faster to build new homes by reducing approval times, and fairer by making sure fees and taxes are equitable

 *****  *****
 

Gary Switzer
Chief Executive Officer MOD Developments, Toronto

Help us do our job to create new housing. We have a shortage of housing because of the lack of supply. Don’t look at new housing as a golden goose that you can keep laying on more and more municipal charges. Right now, about 24 per cent of the cost of all new housing is going to some level of government in the form of taxes, levies, charges and fees.

 *****  *****
 

Daniel Berholz
President, The Rose Corporation

The three levels of government, as well as builders and developers, may all have different constituencies, but our objectives are remarkably similar.

Affordable housing works for all of us. Good planning works for all of us. Good design works for all of us. Building Green buildings works for all of us. Governments working together with developers works for all of us and can help facilitate all of this.

At The Rose Corporation, we accomplished exactly this, working with York Region, the Town of Newmarket and the federal government (CMHC). Together, we are now building a sustainable, complete and better overall community for having worked in close consultation with each other.

 *****  *****
 

Johnathan Schickedanz
General Manager, FarSight Homes, President, Durham Region Home Builders’ Association

The largest issue surrounds climate change, GHG emissions and resilience in new housing. Over the next decade, these may be some of the biggest changes our industry will face. Our building code is about to be changed to begin steering the industry towards net-zero homes.

Government needs to support the R&D side of the construction industry so that new and better products can be developed. Net-zero homes are achievable. There are a number of builders that have already constructed a discovery home and are looking at the ability to market this in a production capacity. Although from a technical perspective this is achievable, it will come at a significant cost. Net-zero homes will not be cheap.

The bigger question, then, is, will such initiatives be affordable? This is what governments will have to balance. When they regulate such a high minimum standard, our industry will be forced to meet the requirements. This is where R&D pays back. We need materials and products that are approved and available at the best price points possible to adopt into our building program.

Government should keep a close eye on the timing for mandating high standards of construction, and be mindful that affordability must be a top priority in the implementation.

 *****  *****
 

John DiMichele
CEO, Toronto Real Estate Board

Housing affordability is one of the most important issues facing Canadians today. TREB remains diligent, along with other real estate boards and associations across Canada, in urging all levels of government to remove barriers and reduce the cost of homeownership.

With all levels of government in Canada, plus reputable international bodies acknowledging that we have a housing supply problem, and specifically the affordability pressures facing the GTA, it’s imperative for the growth of our city and region that we have flexible housing market policies that will help sustain balanced market conditions over the long term.

The time is now and policymakers need to translate their acknowledgment of supply issues into concrete solutions in 2020 to bring a greater array of ownership and rental housing online. As always, TREB will be there to help policymakers have the right impact on the market and Canadians.

 *****  *****
 cl_feb2020_the_power_seat_bob_finniganBob Finnigan
Principal and COO of Acquisition & Housing, Herity, Toronto

 The bottom line is this: Unless we can shorten the time it takes to bring developments through the approval process and to market faster, demand is going to continue to outstrip supply.

There have been some very positive enhancements the provincial government has put through to try and reduce these timeframes, by reducing red tape and other changes, and we’re grateful for that.

But in many cases the Province and the municipalities do not see eye to eye on how policies should be applied, and this constant fighting continuously thwarts the positive efforts and mires the process.

We have to work together – the politicians, building industry and public – to accept growth, have growth pay for growth, and not for unrelated municipal spending as well. We need to plan to have adequate supply of all types of housing, but especially what is missing in our urban areas today – the two- and three-bedroom midrise condos – the “missing middle.”

 *****  *****
 

Niall Collins
President, Great Gulf Residential, Toronto

It’s vital that all three levels of government work together to address the housing affordability issue by increasing the supply of housing to meet demands of growth in the GTA for decades to come.

Sustained infrastructure growth requires multi-level government support partnering with private enterprise to foster innovation in procurement and delivery and that the planning approval process is streamlined to avoid increased costs which impact housing affordability.

The cities in the Greater Golden Horseshoe need to actually adopt and implement provincial policies on development densities near transport nodes. Ultimately, the homeowners carry the burden of the increased costs from a lack of land supply, approval delays and development charge increases.

 *****  *****
 

Christopher Alexander
Executive Vice-President and Regional Director, ReMax of Ontario- Atlantic Canada

Canadian economists and politicians have spent the better part of the last decade sighing with relief and sharing kudos for having skirted the U.S. housing crisis. Meanwhile, north of the border, Canadians are on a rollercoaster ride, as a result of government intervention and other factors. We’ve experienced record-high housing prices, record-low interest rates, economic downturns, and domestic speculators and foreign investors pushing people out of their homes because they can’t afford to live there anymore. We’ve seen housing inventory drop, and new development hindered by red tape and mounting development fees.

We need to keep up with housing demand to maintain sustainable housing values. It’s a complex issue with many moving parts.

To Mayor John Tory: Eliminate the municipal Land Transfer Tax, or at the very least, cap it. With Toronto’s ever-increasing property values, this tax is prohibitive in an already unaffordable market. The prospect of having to pay double LTT is deterring some move-up buyers from listing their homes, further straining the already low housing supply. How do you intend to stimulate housing market activity?

To Premier Doug Ford: Domestic and foreign immigration to Ontario is critical to a healthy economy, but as you work to continue attracting the biggest and best businesses to the province, where will you house the employees and their families? Housing supply is critically low, with developers stuck behind red tape and buried under development fees, preventing them from building the homes Ontarians so desperately need.

To Prime Minister Justin Trudeau: Canada needs a National Housing Strategy that addresses inventory and affordability in our cities. Many Canadians, especially Millennials, new immigrants and those employed in the so-called “gig economy” feel homeownership is becoming less tangible by the day. While politicians of all stripes acknowledge the mounting urgency of affordable housing, few are offering any timely or compelling solutions. Focus on creating supply and affordability in a sustainable way, instead of continuing to support corrective measures that have constrained Canadians from participating in the economically beneficial practice of homeownership.

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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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Cannabis industry a boon to local economies

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Cannabis industry a boon to local economies

Canada’s largest cannabis producers are being credited with micro-booms in some local economies, and the trickle-down effects are visible in nearby housing sales and price increases, according to realty firm ReMax. The trend is more pronounced in eastern Canada, where there’s a greater number of large-scale cannabis producers.

Smiths Falls, Ont. is one such market transformed by Canopy Growth, the largest cannabis producer in the world. After taking over the abandoned Hershey factory, the Ottawa-area production facility now employs 1,300 people and has a market value of more than $11 billion.

“The impact of Canopy Growth on Smiths Falls cannot be understated, and it’s growing,” says Christopher Alexander, executive vice-president and regional director, ReMax of Ontario-Atlantic Canada. “The economy in the Rideau-St. Lawrence area is experiencing a boom, which is triggering home sales, which rose by 27.1 per cent year-over-year, and average prices increased 10.5 per cent. Demand is up and there’s a housing shortage in the region. We expect to see similar cannabis industry-related growth in other regions, as well.”

Markets to watch include Windsor-Essex, where Aphria has set up shop in nearby Leamington and employs 1,000 people. The region saw September 2019 home sales increase 7.82 per cent and average prices rise 9.10 per cent year-over-year. In Atlantic Canada, the area surrounding Wentworth, NS will be of interest, where Breathing Green Solutions operates. Similarly, Atholville, NB is also experiencing a renaissance, thanks to Zenabis Global Inc., employing more than 420 people from the town and neighbouring communities ReMax says.

“The legal cannabis industry is already being credited with invigorating some lagging economies and as a result, those housing markets could soon see a flurry of activity,” Alexander adds.

While eastern Canada appears to be a hot spot for cannabis producers, and western Canada has some large-scale facilities, the west is seeing a much heavier influx of cannabis retailers compared to Ontario and Atlantic Canada. Calgary alone has more than 50 retail locations and Greater Vancouver has 23, whereas Toronto has only six. None of these markets have seen a meaningful impact on real estate activity or values. This is despite the results of a ReMax consumer survey, which found that 65 per cent of Canadians would not like to live near cannabis retail stores.

“It appears that there were a lot of anticipated reservations surrounding cannabis retail and the negative impacts on local property values that did not come to pass,” says Alexander. “We have not seen a decrease in home sales or prices that can be attributed to legal cannabis. In fact, the opposite may be true. As the retail footprint grows and diversifies into edibles and other formats, buyers and sellers may start to feel less resigned.”

A ReMax consumer survey found that two in 10 Canadians already live in proximity to a cannabis retailer, and 72 per cent of respondents say living near one is not a factor in their decision to move.

“The increasing number of retail cannabis stores in Calgary shows no signs of stopping, with city officials having approved more than 200 since legalization,” says Elton Ash, regional executive vice-president, ReMax of Western Canada. “The presence of more stores may influence how home buyers approach certain neighbourhoods.”

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GTA new home sales

GTA new home sales in July remain strong

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GTA new home sales in July remain strong

GTA new home sales

It was a busy month by July standards, as sales for both condos and single-family homes were up year-over-year, according to the latest statistics from the Building Industry and Land Development Association (BILD).

There were 566 new single-family homes, including detached, linked and semi-detached houses and townhouses, sold in July, according to Altus Group, BILD’s official source for new home market intelligence. Although sales increased 136 per cent from last July, they were 29 per cent below the 10-year average.

Sales of new condominium apartments in low-, medium- and highrise buildings, stacked townhouses and loft units, with 2,297 units sold, were up 22 per cent from July 2018 and 42 per cent above the 10-year average.

Brisk openings

“Typically, buyers take a bit of a vacation from the new condo apartment market in July” says Patricia Arsenault, Altus Group’s executive vice-president, Data Solutions. “This year was no different, although the decline in sales was less pronounced than usual, resulting in the second strongest July on record. While few new projects launched in July, sales at projects opened in June were brisk.”

The benchmark price of new condominium apartments increased from last month, to $838,824, up 8.3 per cent over the last 12 months. The benchmark price of new single-family homes decreased slightly from last month, to $1.09 million, down 4.5 per cent over the last 12 months, continuing its moderating trend in 2019.

ALSO READ: Detached home sales and prices roar back to life in first half of 2019 – ReMax

Strong July sales, paired with traditional fewer summer openings, saw inventory decrease in July to 12,873 condominium units and 4,409 single-family homes. Remaining inventory includes units in preconstruction projects, in projects currently under construction and in completed buildings.

Total new home sales in the first seven months of 2019, at 20,268 units sold, are up 45 per cent from the same period in 2018 and nine per cent below the 10-year average.

Price gap narrows

“The price gap between single-family homes and condos continues to shrink, leaving new-home buyers with a lack of choice,” says David Wilkes, BILD president and CEO. “We must provide more ‘missing middle’ type development that can support transit in established neighbourhoods. More ‘gentle density’ housing in the form of midrise buildings, condos with street level retail, and stacked townhouses is needed to give consumers more choice.”

 

New home sales by municipality, July 2019

Municipality Condominium units Single-family homes Total
Region 2019 2018 2017 2019 2018 2017 2019 2018 2017
Durham 29 6 27 118 44 60 147 50 87
Halton 59 46 18 82 25 18 141 71 36
Peel 415 150 148 142 87 0 557 237 148
Toronto 1,522 1,557 1,118 46 8 6 1,568 1,565 1,124
York 272 120 461 178 76 34 450 196 495
GTA 2,297 1,879 1,772 566 240 118 2,863 2,119 1,890

Source: Altus Group

RELATED READING

What Bill 108 means for housing affordability in the GTA

Behind the numbers : The GTA housing market in June 2019

Examining the GTA affordable homeownership crisis

 

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Detached home sales and prices roar back to life in first half of 2019 – ReMax

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Detached home sales and prices roar back to life in first half of 2019 – ReMax

The bounce-back in single-detached home sales is contributing to an uptick in average price, with more than 50 per cent of neighbourhoods in the Greater Toronto Area reporting an increase in detached housing values the first half of 2019, according to a new report from Re/Max of Ontario-Atlantic Canada.

Re/Max examined trends and developments in 65 Toronto Real Estate Board (TREB) districts, finding that detached home sales were up in almost 88 per cent of markets, while prices were up in 51 per cent of markets between January and June 2019, compared to the same period one year ago. The 905 area saw the greatest increase in homebuying activity, with all 30 areas reporting rising detached home sales, and 43 per cent of 905 communities experiencing price appreciation. Meanwhile, in the 416, just 20 of the 35 districts experienced an uptick in sales, while detached home prices increased in 57 per cent of neighbourhoods.

“Detached housing is finally back on track, with year-to-date sales almost 17 per cent ahead of last year’s levels, signaling a return to more normal levels of home-buying activity,” says Christopher Alexander, executive vice-president and regional director, ReMax of Ontario-Atlantic Canada. “Market share is also climbing, with detached homes now representing 45.7 per cent of all home sales in the Greater Toronto Area, up from 43.1 per cent one year ago.”

While improving affordability is the catalyst in the uptick in detached home sales, Re/Max says location is equally important, as first-time and trade-up buyers move to secure prime real estate before values are on the move again.

Top 5 detached home markets in 416 by price growth, first half of 2019

Neighbourhoods

Average price

% increase

1. (E01)
North Riverdale
South Riverdale
Blake-Jones
Greenwood-Coxwell

$1.38M

15.2

2. (C01)
Trinity-Bellwoods
Palmerston-Little Italy
Niagara
Little Portugal
Kensington-Chinatown
Dufferin Grove

$1.95M

12.8

3. (C11)
Leaside
Thorncliffe Park

$2.19M

11.2

4. (E04)
Dorset Park
Wexford-Maryvale
Clairlea-Birchmount
Ionview
Kennedy Park

$836,585

7.8

5. (W02)
Junction
High Park North
Runnymede-Bloor,
West Village
Lambton-Baby Point
Dovercourt-Wallace
Emerson-Junction

$1.41M

7.1

Source: Re/Max of Ontario-Atlantic Canada; E01, C01, C11, E04, W02
are TREB market districts (trebhome.com)

Top 5 detached home markets in 905 by price growth first half of 2019

Neighbourhoods Average price % increase
1. Uxbridge
2. Milton
3. Halton Hills
4. Brampton
5. Ajax
$895,490
$903,359
$842,864
$835,435
$728,923
6
4.3
3.6
2.8
2.5

Source: Re/Max of Ontario-Atlantic Canada

Despite strong demand in these hot-pocket areas, approximately 45 per cent of districts within the 416 are in a technical buyers’ market, with a good selection of homes listed for sale. ReMax says select neighbourhoods north of Bloor offered greater flexibility in terms of negotiation – this is especially true when average price topped $2 million – while market conditions were tightest south of Bloor Street.

“Heated demand clearly exists for single-detached housing south of Bloor Street, but there are pockets throughout the 416 that are scorching hot,” says Alexander. “The Oakwood-Vaughan area in C03, where homes can still be had for just over the $1-million price point, is one of those neighbourhoods, while C10, comprised of Sherwood Park, Mount Pleasant West, Mount Pleasant East, is another. The Junction Area, High Park North, and Runnymede-Bloor West Village (W02) in the west end, and Leslieville (E01) and the Beach (E02) in the east, are also highly sought-after, with proximity to transportation and vibrant shopping avenues the common denominators drawing younger buyers.”

Top performers in terms of unit sales were markets offering single-detached homes at less than the $1-million price point. Scarborough’s L’Amoreaux, Tam O’Shanter-Sullivan, Steeles neighbourhood (E05) saw the most significant upswing in terms of percentage increase in sales, with the number of homes sold up 76.2 per cent to 148 units.

“With recovery well underway in the detached housing segment, the residential real estate market is starting to fire on all cylinders,” says Alexander. “The possibility of more relaxed mortgage rules down the road – in conjunction with today’s low interest rate environment – may serve to spark up the GTA housing market yet again.”

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GTA buyers head west ReMax

GTA homebuyers continue to look west in search of affordability

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GTA homebuyers continue to look west in search of affordability

GTA buyers head west ReMax

Homebuying patterns in the GTA have increasingly shifted west over the last five years, particularly to Halton Region and west Toronto, according to a new report from ReMax of Ontario-Atlantic Canada.

“Growing demand for affordable housing buoyed new construction and contributed to rising market share in Halton Region (from 2013 to 2018),” says Christopher Alexander, executive vice-president, ReMax of Ontario-Atlantic Canada. “Product was coming on-stream at a time when the GTA reported its lowest inventory in years and skyrocketing housing values were raising red flags. Freehold properties in the suburbs farther afield spoke to affordability.”

In analyzing sales trends in nine Toronto Real Estate Board (TREB) districts over the past five years, ReMax notes that Halton Region – comprising Burlington, Oakville, Halton Hills and Milton – captured 10.1 per cent of total market share in 2018, leading with a 2.3-per-cent increase over 2013. Toronto West, meanwhile, climbed almost one per cent to 10.5 per cent. Toronto Central rose close to two per cent to 18.7 per cent of total market share, while Simcoe County jumped 0.6 per cent to 3.1 per cent. The gains came at the expense of perennial favourites such as York Region (down 3.2 per cent to 15.3 per cent); East Toronto (down 1.7 per cent to 9.3 per cent); Peel Region (down 0.5 per cent to 20.6 per cent); and Durham Region (down 0.3 per cent to 11.5 per cent). Dufferin County remained stable over the five-year period.

The quest for single-detached housing at an affordable price point has sent throngs of Toronto buyers into the Hamilton housing market over the past decade, ReMax says. The spillover effect has stimulated homebuying activity in most areas flanked by Toronto’s core and Hamilton. Burlington, in particular, soared between 2013 and 2018, with home sales almost doubling and average price climbing 50 per cent to $769,142.

Window of opportunity

But with such strong growth in Burlington, how long will this market remain an affordable option?

“The communities in the west will still be affordable compared to Toronto proper, but what we are going to see is a continued uptick in demand for more of the outlying communities like Brantford, Waterdown, Kitchener-Waterloo, Cambridge and even as far-reaching as London and Niagara,” Alexander told HOMES Publishing. “What will really impact the growth of these markets, outside of availability and affordability, will be the underlying transit systems and investments in local economies, as people still have a need to be connected to the GTA core.”

The upswing in new construction has contributed to the changing landscape. New housing starts in Halton Region averaged 3,100 annually between 2013 and 2016. In Simcoe County, just north of Toronto, new residential builds averaged close to 1,860 annually from 2013 to 2017.  During the same period, almost 39,000 residential units came on-stream in Toronto’s downtown-central waterfront area, while another 56,855 were active (approved with building permits applied for or issued and those under construction). Another 6,000 units came on the market in North York and Yonge-Eglinton.

 

GTA home sales ReMax

 

In Toronto’s west end, affordability has been a strong influence in helping Millennials redefine mature neighbourhoods such as The Junction, South Parkdale, Bloorcourt and Dovercourt Park through gentrification. Average price for the 8,000 plus homes sold in 2018 hovered at $755,658 – although the 10 districts within Toronto West range in price from $557,000 in Downsview-Roding, Black Creek and Humbermede to $1.2 million in Stonegate-Queensway.

“Freehold properties remain the choice of most purchasers in Halton Region and Toronto West,” says Alexander. “The same is true to a lesser extent in Toronto Central, but condominiums continue to gain ground. Just over one in three properties sold in the GTA was a condominium in 2018, and that figure is higher in the core. As prices climb in both the city and suburbs, the shift toward higher-density housing will continue, with fewer single-detached developments coming to pass.”

Toronto Central has seen rapid growth over the past five years, with Millennials fuelling demand for condos and townhomes in developments such as City Place, King West Village and Liberty Village. This cohort has also been instrumental in the gentrification of Toronto Central neighbourhoods such as Oakwood-Vaughan and Dufferin Grove as they snap up smaller freehold properties at more affordable price points, ReMax says.

ALSO READ: 2018 GTA new home sales drop to lowest mark in nearly 20 years

ALSO READ: GTA resale condo listings and sales dip to end 2018, but prices rise

ALSO READ: GTA among the most promising new home outlooks for 2019, Altus Group says

Baby Boomers have also been a major influence in Toronto Central, selling larger homes throughout the GTA and making lateral moves or downsizing to neighbourhoods close to shops, restaurants and amenities. Close to 15,000 properties were sold in 2018, with average price of $932,416, up almost 40 per cent since 2013. Properties within Toronto Central averaged 20 days on market and ranged in price from $709,660 in Bayview Village to $2.5 million in York Mills, Hogg’s Hollow, Bridle Path and Sunnybrook.

With an affordable average price point of $611,628 – and a range of $528,942 to $746,332 – younger buyers, empty nesters and retirees have flocked to Simcoe County in recent years. New construction in Adjala-Tosorontio, Bradford West, Essa, Innisfil and New Tecumseth has allowed the area to capture a greater percentage of the overall market between 2013 to 2018.

“As the Millennials move into their homebuying years, they will displace Baby Boomers as the dominant force in the GTA’s real estate market,” says Alexander. “Their impact on housing will have a serious ripple effect on infrastructure in the coming years, placing pressure on transit systems, roadways, local economies and their abilities to attract investors and new businesses, parks and greenspace development.”

The upswing in demand over the next decade is expected to re-ignite homebuying activity in Toronto East, York, Peel and Durham Regions. These areas still carry significant weight, despite the factors that have impacted softer performance in recent years, such as affordability, lack of available housing and fewer transit options.

GTA west vs east

As the west end of the GTA continues to see growth and price appreciation, a leveling effect will likely come into play (with the east region),” Alexander told HOMES. “Toronto’s GDP and the thriving economy will continue to attract people, so while affordability may continue to decrease, desire is unlikely to waver. That said, the current and next generation of homebuyers are taking this factor into account when they are making their decision to purchase – sacrificing space for lifestyle and convenience.  As they look to the greater GTA, if affordability becomes more leveled out between the west and the east, it’s likely that we will see more dispersion across the entire region as people’s desire to be connected to the GTA core remains strong.

GTA east areas such as Durham region currently don’t have the same appeal as the west. “The West end of the GTA has a greater diversity of communities that are attracting a diverse range of buyers.  In the past 10 years, there has been significant focus on the growth and development of these regions, whereas historically, Durham has not traditionally been viewed in this same regard. With the boom in areas towards the east, like Prince Edward County, and the affordability leveling out, we will likely see the tide begin to turn.”

RELATED READING

Delays in approval process contributing to housing affordability issue in GTA

GTA condo sales and prices hit record levels

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

 

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2019 web

Forecast 2019 – where are Canada’s hottest housing markets?

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Forecast 2019 – where are Canada’s hottest housing markets?

2019 web

Wondering where Canada’s hottest housing markets are, as 2018 comes to a close and 2019 is just around the corner? Well, that all depends on who you ask.

Two of Canada’s large realty firms – Royal LePage and ReMax – both issued their 2019 housing market outlooks on Dec. 11.

Yes, the very same day.

Rather than produce two stories on the exact same topic, just from different sources, we thought it would be interesting to compare them. And while there are some commonalities in their forecasts, there are also some interesting discrepancies.

There is no ‘Canadian’ market

Let’s begin with the headline of ReMax’s 2019 Housing Market Outlook: “Canadian home prices expected to increase by 1.7 per cent in 2019.”

Yeah, about that. Forget that headline. As we recently wrote, those national numbers are pretty meaningless. It’s like trying to summarize the weather, temperature or traffic as “Canadian.”

But, just for comparison purposes, ReMax estimates Canadian home prices will grow 1.7 per cent in 2019; Royal LePage, 1.2 per cent.

National numbers that do matter are interest rates, GDP growth and employment. Then there’s immigration, which affects some markets more than others, mortgage regulations and housing supply. All of these factors are the key drivers of real estate. But more on that later.

Now let’s take a look at some of the regional highlights.

GTA

ReMax says:

  • Toronto average prices down 4% in 2018 to $789,181
  • Toronto average prices forecast to rise 2% in 2019 to $804,964

In Toronto, rising interest rates and the mortgage stress test were the two major factors affecting market activity in 2018, with average sale prices dropping by four per cent from $822,572 in 2017 to $789,181 in 2018, and unit sales down by 16 per cent. Lack of affordability in the single-detached segment will make it difficult for buyers wanting to enter this market. Resale condos, on the other hand, now represent almost 37 per cent of total sales, fueled by affordability.

ReMax Housing Market Outlook, select major markets

Region 2018

 Average Home Price

 

2019

Average Home Price

(Forecast)

Year-over-Year

(%)

Vancouver $1.05M $1.01M -3.0%
Edmonton $379,539 $360,562 -5.0%
Calgary $487,399 $487,399 0.0%
Saskatoon $333,187 $343,182 0.6%
Regina $322,500 $322,500 0.0%
Winnipeg $323,001 $335,921 4.0%
Windsor $299,750 $329,725 10.0%
London $379,654 $398,636 5.0%
Kitchener-Waterloo $473,275 $487,473 3.0%
Hamilton-Burlington $707,949 $849,538 2.0%
Barrie $477,839 $492,174 3.0%
Oakville $1.08M $1.13M 5.0%
Mississauga $705,406 $733,622 4.0%
Brampton $577,846 $600,959 4.0%
Durham $594,585 $612,422 3.0%
Toronto $789,181 $804,964 2.0%
Ottawa $678,670 $705,816 4.0%
Halifax $299,982 $308,981 3.0%
St. John’s $265,523 $265,523 0.0%

 

Elsewhere in Ontario

Rising interest rates and the stress test continue to make it difficult for prospective buyers in Barrie, Oakville and Durham regions.

“This is particularly true for first-time buyers and single Millennials, as evident in cities like Brampton, Kingston and Durham,” says Christopher Alexander, executive vice-president and regional director, ReMax of Ontario-Atlantic Canada.

Hottest in the province

The hottest market in Ontario? Windsor, which showed price growth of 13 per cent in 2018, to $299,750, with another 10 per cent increase forecast for 2019. London is also expected to be strong, with prices to increase another five per cent next year, after rising 17 per cent this year to reach $379,654.

 

Royal LePage says:

  • GTA average price in 2018 $844,000
  • GTA average price forecast to rise 1.3% to $854,552

“Compared to the record pace of home appreciation seen in 2016 and 2017, the GTA housing market is now positioned for much healthier and sustainable growth in future years,” says Chris Slightham, broker and owner, Royal LePage Signature Realty.

Many regions outside of Toronto’s core saw price declines in 2018, a result of overshooting in previous years. The continued population growth should cause the suburbs to stabilize and reignite price growth. In addition, the potential subway expansion into the suburbs should stabilize and increase home prices in close proximity to new transit infrastructure.

Elsewhere in Ontario

The median price in Ottawa is expected to increase 2.5 per cent in 2019 to $487,910, benefitting from the city’s healthy economy and high income per household, driven by the public and technology sectors.

Interestingly, Royal LePage also notes that neither the new mortgage rules nor recent interest rate hikes have notably affected Ottawa’s housing market.

 

Highlights from other Canadian markets

The star performer of all major Canadian markets in 2019? Montreal, according to Royal LePage.

“Quebec will out-perform the nation in 2019,” says President and CEO Phil Soper. “Like other regions of the country, the economy is strong and people are working. What is different is affordability. We have to remember that Montreal sat out the rapid home price inflation we saw in Vancouver and Toronto this decade, and in Calgary the decade before.”

As for the ReMax outlook for Montreal, Quebec did not participate in this year’s forecast.

 

 

Royal LePage Market Survey Forecast

Region  

2018 Aggregate Home Price
(Year End Estimate)


2019 
Aggregate
Home Price 
(Forecast)
Year-over-Year (%)
Canada $631,000 $638,257 1.2%
Greater Toronto Area $844,000 $854,552 1.3%
Greater Montreal Area $409,000 $421,306 3.0%
Greater Vancouver $1.28M $1.29M 0.6%
Ottawa $476,000 $487,910 2.5%
Calgary $484,000 $473,104 -2.3%
Edmonton $386,000 $378,691 -1.9%
Winnipeg $306,000 $309,829 1.3%
Halifax $321,000 $326,096 1.6%
Regina $327,000 $311,505 -4.7%

 

Influential factors

Now for more on those national factors that do influence real estate.

“I would call attention to two factors influencing our forecast that deserve special consideration,” says Soper. “Firstly, home prices are appreciating, albeit at a snail’s pace. Secondly, the Canadian market is supported by strong economic fundamentals, including a robust rate of new household formation and excellent employment growth.

“The future for Canadian housing remains bright, perhaps too bright. With an increasing number of gainfully employed people looking to put a roof over their heads, and the scarce availability of rental accommodation, policy makers in our major markets will once again be struggling with housing shortages. More than an affordable housing problem, we will once again be facing an overall housing supply crisis.”

As for interest rates, the Bank of Canada held its benchmark interest rate of 1.75 per cent on Dec. 5, citing a weaker than expected energy sector. Further rate increases are expected in 2019, making it more difficult for Canadians to buy a home in 2019.

The Bank forecasts GDP will increase 2.1 per cent in 2019, a modest increase over 2018, while Canada’s unemployment rate fell to 5.6 per cent in November, the lowest on record since 1976.

RELATED READING

5 things we can learn from real estate in 2018

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

GTA moving into balanced market for 2019

GTA new home market gains further momentum in October

Delays in approval process contributing to housing affordability issue in GTA

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

 

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House web

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

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

House web

In one fell swoop, General Motors Canada’s announcement on Nov. 25 that it plans to close all assembly operations in Oshawa, Ont. effectively has pushed housing there into a buyers’ market.

“The announced General Motors plant closure will certainly impact Oshawa, and the trickle-down effect will be felt across the province,” Christopher Alexander, executive vice-president and regional director, ReMax Integra of Ontario-Atlantic Region, told Homes Publishing.

“However, it’s important to remember that GM isn’t the economic driver that it used to be in Durham Region. The area boasts a growing education sector and a new casino is slated to open in 2019, which will boost new condo development and housing demand. With the rise of remote work and no relief expected for Toronto house prices in 2019, Oshawa will continue to be a popular choice with first-time and move-up buyers who have been priced out of the 416.”

There you have it, prospective home buyers.

Opportunity knocks

While such a major employment hit is hardly an occasion to celebrate, these developments could mean opportunity for those looking to buy a home.

“The fact is that more than 2,500 GM workers will be left in the lurch come 2020, and the looming loss of income will likely prompt a softening of the market at a local level, as existing residents and prospective homebuyers digest the news and what it might mean for them,” says Alexander. “This coming closure, coupled with further interest rate increases in 2019, is likely to trigger a market shift from the current balanced territory, as homebuyers delay purchases, scale down lower-priced properties or move away in search of employment.”

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

Also read: Focus on Whitby and Oshawa

Also read: 5 affordable neighbourhoods for detached homes in 416 and 905

Another real estate expert, Don R. Campbell, says the impact of the closure could take 18 to 24 months to play out fully in the region.

Diversified economy

Thankfully, there is more going for Oshawa and the Durham Region than just General Motors. Though it was once described as the “Automotive Capital of Canada,” in recent years the economy has diversified into education and health sciences. The University of Ontario Institute of Technology, Durham College and Trent University Durham and all have campuses in the city, among other economy-boosting facilities.

Indeed, in its latest Metropolitan Outlook, the Conference Board of Canada pegged Oshawa to be one of the strongest economies in the province for 2018. The Board forecast real GDP growth of 2.6 per cent this year, following 3.2 per cent in the last two years, citing strength in the non-residential construction, education, health care, finance and insurance sectors.

In addition, Statistics Canada figures show that Oshawa was one of the fastest growing cities in Ontario from 2011 to 2016, with 6.6 per cent population growth, second only to Guelph at 7.7 per cent. This, after growing 7.7 per cent from 2006 to 2011.

Importantly, for prospective home buyers, transportation improvements such as expanded GO Transit and the Hwy. 407 extension make it easier for people to live in Oshawa – at cheaper home prices – and commute to work in other areas such as Toronto. Another extension of the 407 eastward to neighbouring Clarington is due for 2020, further easing transportation options.

New home opportunities

Tomorrow, we’ll explore some of the opportunities to buy new homes in the Durham Region.

 

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Condo TO web

GTA condo sales and prices hit record levels

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GTA condo sales and prices hit record levels

Condo TO web

With home prices seemingly forever on the rise, there is only one way for many GTA homebuyers to go – up, as in into highrise condos and other multi-family housing options.

Fueled largely by affordability – and the lack thereof in lowrise homes – resale condominium apartments and townhomes in the GTA now represents almost 37 per cent of total residential sales by the Toronto Real Estate Board (TREB), up from 30 per cent in 2013, according to a new report by ReMax of Ontario-Atlantic Canada Region.

ReMax report

Momentum has also been reflected in resale condominium values, which is the only property segment that held up against the 2017 market correction, ReMax says.

The average price of a condominium unit increased almost eight per cent to $551,761 between January and October 2018, up from $512,552 during the same period in 2017.

Townhomes were slightly ahead of last year’s pace, with values hovering at $571,058, compared to $568,165 in 2017. Prices of freehold properties, including single-detached, semi-detached, attached/row/townhouse and linked townhomes are all down year-over-year.

AFFORDABILITY KEY ATTRACTION

“The condominium lifestyle continues to resonate with buyers in the Greater Toronto Area for a number of reasons,” says Christopher Alexander, executive vice-president and regional director, ReMax of Ontario-Atlantic Canada Region. “While the affordability aspect is first and foremost, we’ve also a seen strong investor presence in recent years.”

Alexander cites a recent report by Urbanation and CIBC, which found that investors who bought condominiums for the purpose of renting accounted for 48 per cent of all newly completed units in the GTA in 2017. “The income potential, given today’s tight rental market, in addition to the overall return on investment, has been a serious draw for real estate investors.”

Immigration, population growth and lifestyle choices have also contributed to the uptick in demand for condo apartments and townhomes. Aging infrastructure, combined with a lack of transportation alternatives, longer commute times and the environmental component – with efforts to reduce carbon footprint – have all played a role in buyers choosing condominiums in Toronto proper that are close to both work and play, Alexander says.

DOWNTOWN THE CHOICE LOCATION

The most popular area for condominium sales remains the downtown core, with one in every five condominiums (21.9 per cent) sold in the area bordered by Bloor Street to the north, the lakeshore to the south, the Don Valley Parkway to the east and just past Dovercourt Road in the west.

“In spite of a proliferation of condominium developments over the past decade, supply and demand issues continue to persist in the core,” says Alexander. “Limited inventory continues to place substantial upward pressure on prices, with fewer affordable housing options available– and that includes condominium rentals.”

Average resale prices hover at $700,000 for condo units, with new construction closing in on $1,000 per sq. ft.

PROXIMITY TO TRANSIT

“Higher prices in the core are prompting buyers to consider condominium communities farther afield,” says Alexander. “New construction along subway lines to the north, east and west are exceptionally popular, especially with first-time buyers. Yonge Street north of Hwy. 401 comes to mind, as well as the Sheppard line between Bayview Avenue and Leslie Street. Combined, these two areas represent approximately 10 per cent of total resale condominium sales to date and continue to experience growth.”

Mississauga is the GTA’s second most popular destination for condominium living, accounting for 14 per cent of condominium sales so far this year.

Almost 51 per cent of condominium sales in the GTA occur under the $500,000 price point, but affordability is being threatened as builders and developers face skyrocketing construction costs and a land crunch within the GTA, and struggle to maintain the status quo, ReMax says.

“The necessity to ‘build up’ has never been more prevalent in a city that has seen its population climb from one census to the next,” says Alexander. “To prevent the run-up we’ve seen in housing values in the past, all levels of government must work together with developers to streamline the building process. We need to create more affordable GTA housing options that can accommodate buyers and renters at every price point.”

THE TOWNHOME OPTION

These trends generally align with the findings of another report, from Altus Group. Lack of affordability and availability of single-family new homes has buyers increasingly looking to townhomes as a lowrise home option. But supply issues in this category have seen new townhouse sales plummet in the past two years, in both absolute terms and as a percentage of total new home sales – just seven per cent of the total in the first half of 2018.

RELATED READING

New condos in Toronto hit record high in prices

Vast majority of GTA Millennials fear buying a home is out of reach, poll says

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

5 steps to solving the housing affordability issue in Ontario

 

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Detached homes

5 affordable neighbourhoods for detached homes in 416 and 905

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5 affordable neighbourhoods for detached homes in 416 and 905

Detached homes

by Wayne Karl

Looking for a detached home in the GTA and not sure where to look? Despite what recent reports would have you believe,  there are still some affordable neighbourhoods for single-family homes in the 416 and 905 areas.

Affordable being a relative word, of course, as compared to average prices. As of Sept. 30, 2018, the average price of a detached home in the GTA is $1.01 million – $1.34 million in the 416, and $905,722 in the 905.

Indeed, there’s been no shortage of stories recently about the challenges of the housing market – namely supply, pricing and affordability – on both the resale and new homes sides of the market.

The most recent, in fact, coming this morning.

“While higher borrowing costs and tougher mortgage qualification rules have kept sales levels off the record pace set in 2016, many households remain positive about home ownership as a quality long-term investment,” Toronto Real Estate Board President Garry Bhaura said Oct. 3 in releasing TREB’s Market Watch Report for September. “As the GTA population continues to grow, the real challenge in the housing market will be supply rather than demand. The Toronto Real Estate Board is especially concerned with issues affecting housing supply as we move towards municipal elections across the region.”

For the purposes of this story, let’s focus on resale homes. (We’ll prepare a follow-up focusing on new detached homes in a subsequent report in the coming days.

First, let’s look at some of the hottest areas of the GTA in terms of price growth.

Top five GTA neighbourhoods for price appreciation

Detached homes in 2018
NEIGHBOURHOOD Q1 Q2 % Change
Palmerston-Little Italy,
Trinity-Bellwoods $1.60M $1.87M 17
Brock $498,966 $573,951 15
The Beaches $1.32M $1.50M 13
Edenbridge, Humber Valley, Islington $1.43M $1.57M 10
Georgina $538,817 $590,255 10
Source: ReMax Integra Ontario-Atlantic Region, TREB

 

Double-digit price growth in one quarter is fantastic if you currently own in any of these areas. But if you were hoping to buy there, your purchase price just got a lot more expensive in a matter of months.

Now, let’s take a look at some of the comparatively more affordable areas for detached homes in the GTA.

 

MOST AFFORDABLE NEIGHBOURHOODS IN THE 416

Detached homes, Q2 2018
NEIGHBOURHOOD Average Price
West Humber, Claireville, Rexdale-Kipling,
and Thistletown-Beaumond Heights $732,854
Bendale, Woburn and Morningside $742,670
Malvern, Rouge $752,292
Rockcliffe-Smythe, Keelesdale-Eglinton West, Weston $783,141
Downsview-Roding, Glenfield-Jane Heights, Black Creek $859,215
Source:  ReMax Integra Ontario-Atlantic Region, TREB

 

MOST AFFORDABLE NEIGHBOURHOODS IN THE 905

Detached homes, Q2 2018
NEIGHBOURHOOD Average Price
Essa $547,970
Oshawa $556,309
Brock $573,951
Clarington $585,562
Georgina $590,255
Source: ReMax Integra Ontario-Atlantic Region, TREB

 

As you can see, some of the still-affordable areas for detached homes in the GTA – such as Brock (Durham Region) and Georgina – are also performing well in terms of price growth.

Durham Region, Simcoe County and Dufferin County, in short, are hot.

In particular, Brock  and Essa (Simcoe County), Burlington, Halton Hills, Brampton, Orangeville and Scugog are all showing promise in detached home price growth, according to ReMax Integra, Ontario-Atlantic Canada Region.

“After an extended period of housing market inertia, the floodgates are breaking open,” says Christopher Alexander, executive vice-president and regional director, ReMax Integra. “Upward movement in detached housing values and the threat of additional interest rate hikes in the future are prompting homebuyers to get off the fence and into the market. Rising consumer confidence, job security and an economy firing on all cylinders should continue to support healthy home-buying activity in the GTA for the remainder of the year and into 2019.”

Next in this series, we’ll explore some of the new home developments and buying opportunities in some of these areas, as well as those for multi-family homes and condos.

Wayne Karl is Senior Digital Editor at Homes Publishing. wayne.karl@homesmag.com

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