Excerpted from The Globe and Mail
October 24, 2012
Carney on rates: no 'imminent' changes
By KEVIN CARMICHAEL
Central bank's latest quarterly economic outlook projects steady, if unspectacular, growth through 2014
Bank of Canada Governor Mark Carney Wednesday laid out his plans for interest rates in the clearest possible terms, saying he foresees no "imminent" changes, but that "over time, rates are more likely to go up than not."
Mr. Carney made the comments after releasing the central bank's latest quarterly economic outlook, which projects steady, if unspectacular, growth through 2014 at a pace that's a bit faster than that which policy makers believe the economy can sustain without stoking inflation.
However, Canada's economy has grown slower this year than the central bank was expecting, putting downward pressure on inflation and negating the need for higher interest rates immediately.
"The case for the adjustment of interest rates has become less imminent," Mr. Carney said at a press conference in Ottawa.
Still, the Bank of Canada chief was unusually clear in stating that the borrowing costs are headed higher. He said it is "important" for the general public and investors to realize that Canada is pushing up against its non-inflationary production capacity; its economy is in an expansion phase, not a recovery; and that elevated household debt levels represent a significant threat to the financial system.
"Over time, rates are more likely to go up than not," Mr. Carney said.
Every October, policy makers revise their estimate of how fast Canada's economy can grow without stoking inflation. The Bank of Canada left its estimate of "potential growth" unchanged, pegging potential growth in 2012 at 2 per cent, in 2013 at 2.1 per cent, in 2014 at 2.2 per cent and in 2015 at 2.1 per cent.
The central bank's estimate of the economy's speed limit explains why policy makers remain inclined to lift interest rates. They predict Canada's gross domestic product will grow at an annual rate of 1.8 per cent in the fourth quarter, and speed up to 2 per cent in the first quarter of 2013.
By the second half of next year, the Bank of Canada predicts that economy will be growing at a pace of 2.5 per cent, a forecast that will reinforce predictions that the central bank finally will boost borrowing toward the end of 2013.
"We are in an expansion, not a recovery, which is unique in advanced economies," Mr. Carney said, The risk posed by household debt might be dissipating. The Bank of Canada says that its repeated warnings about the perils of elevated household debt could be sinking in.
Noting that consumer spending has been "moderate" of late, the central bank is cautiously suggesting that Canada's credit binge could be ebbing.
"It is possible that the elevated level of household debt is beginning to induce a more cautious attitude among Canadian households," the Bank of Canada says in its third-quarter Monetary Policy Report.
The more sanguine take on the trajectory of household debt was the biggest surprise in a document that was largely previewed in Tuesday's policy statement, which the central bank used to harden its resolve to raise interest rates within the next couple of years.
For the better part of two years, Bank of Canada Governor Mark Carney and other officials have been warning Canadians to go easy on credit, reminding audience that borrowing costs eventually will rise. As well as custodian of the economy, the central bank also sees itself as the guardian of financial stability, and a wave of personal bankruptcies and foreclosures could cripple the banking system.
Canadians have every incentive to borrow. Policy makers left the benchmark rate at an ultra-low setting of 1 per cent for a 25th consecutive month on Tuesday. Banks appear willing to lend, especially government-backed mortgages, and higher commodity prices are boosting national wealth.
However, the ratio of household debt to income has climbed above 160 per cent, a level that the central bank considers a threat to the financial system – and by extension, the biggest domestic risk facing the country's economic prospects. The central bank said for the first time on Tuesday that household debt could prompt an interest-rate increase if Canadians fail to curb their appetites for credit on their own.
The Bank of Canada notes in its report that household credit growth has stabilized at a rate of around 5.5 per cent since the start of the year, a slower pace than the historical average of about 8 per cent.
A more cautious consumer comes at a price: slower economic growth. The central bank sees little change in household spending over the rest of the year and into 2013, "despite the supportive impact of improved financial conditions and higher terms of trade in recent months." The central bank now expects consumption to grow "slightly" slower than incomes.
That will rob Canada of its primary source of economic propulsion since the recession, putting more pressure on businesses to boost investment. The central bank says it will be 2014 before exports return to pre-recession levels, as global demand remains diminished because of a recession in Europe, tepid growth in the U.S. and weaker demand in China.
Wednesday, October 24, 2012
Tuesday, October 16, 2012
GTA Condo Sales Plunge, Prices Stagnate
Excerpted from The Globe and Mail
October 16, 2012
Toronto condo sales plunge, prices stagnate
By Michael Babad
Third-quarter numbers not encouraging
These are stories Report on Business is following Tuesday, Oct. 16, 2012.
Follow Michael Babad and the Globe's top business stories on Twitter. [http://https://twitter.com/#!/michaelbabad]
Toronto condo sales plunge
The latest numbers from the Toronto Real Estate Board are not encouraging, particularly where the city's condo market is concerned.
According to new statistics released today, condo sales plunged 20.5 per cent in the third quarter of the year, to 4,541, from a year earlier.
New listings climbed more than 6.5 per cent, to 11,456, while average prices were flat at $334,204.
"With more listings to choose from and fewer sales, condo buyers have not been as aggressive with regard to offers, and sellers have had to price their units competitively," Jason Mercer, the group's senior manager of market analysis, said in the report.
"The result was little upward pressure on the average selling price compared to last year. Given the supply of listings currently in the market place, the average rate of price growth for condo apartments should continue to lag price growth for low-rise home types over the next year."
The real estate board also reported over all home sales in the first half of the month, highlighting again how Toronto's housing market is softening.
Sales in those 14 days fell by 10.5 per cent from a year earlier, to 2,961, while new listings rose 5.5 per cent, to 6,505.
Average prices, though, climbed by almost 6 per cent to $501,146.
"Some households have put their home purchase plans on hold in response to the higher cost of home ownership brought about by the recent changes to mortgage lending guidelines," said the group's president, Ann Hannah, referring to the latest restrictions unveiled by the government, which took effect in July.
"Both first-time buyers and existing home owners have been affected, given that sales were down across house types and geography," said Toronto Real Estate Board (TREB) President Ann Hannah.
The Toronto report comes just a day after the Canadian Real Estate Association's over all look at the market in September. That, The Globe and Mail's Tara Perkins reports, showed home sales in Canada plunging by 15.1 per cent last month from a year earlier, though on a seasonally-adjusted basis gaining 2.5 per cent from August.
Amid the angst over the country's slumping housing market, economist Robert Kavic of BMO Nesbitt Burns takes an interesting look today at who's winning and who's losing
Not surprisingly, Vancouver and Toronto lead the pack of losers, in terms of sales, while Calgary is the runaway winner.
Mr. Kavcic tracked 23 markets, using three-month averages compared to a year earlier, rather than just comparing September 2012 to September 2011.
Of those 23, he found, 13 are experienced "balanced conditions," though that may well change going forward.
"With sales generally falling relative to new listings, the number of buyers' markets could be on the rise in the months ahead," he said.
"Vancouver continues to show the weakest metrics," Mr. Kavcic added. "Winnipeg, however, remains tight despite a recent drop in sales, while Calgary is on the verge of a return to sellers' market territory."
Using the three-month average, Mr. Kavcic found Vancouver sales down 27 per cent, and prices down 7.7 per cent, in a buyers' market. Toronto sales were down 14 per cent and prices were up 6.1 per cent, in a balanced market.
In Calgary, prices climbed 19.1 per cent and prices 1.2 per cent in a balanced market, while Winnipeg saw a sales decline of 7 per cent and a price gain of 4.8 per cent in a sellers' market.
For a look at other cities and Mr. Kavcic's findings in general, see the accompanying graphic or click here [http://www.theglobeandmail.com/report-on-business/top-business-stories/bmos-housing-market-scorecard/article4615031].
•Year-over-year home sales plunged 15.1 per cent in September [http://www.theglobeandmail.com/report-on-business/economy/housing/year-over-year-home-sales-plunge-151-per-cent-in-september/article4612858]
October 16, 2012
Toronto condo sales plunge, prices stagnate
By Michael Babad
Third-quarter numbers not encouraging
These are stories Report on Business is following Tuesday, Oct. 16, 2012.
Follow Michael Babad and the Globe's top business stories on Twitter. [http://https://twitter.com/#!/michaelbabad]
Toronto condo sales plunge
The latest numbers from the Toronto Real Estate Board are not encouraging, particularly where the city's condo market is concerned.
According to new statistics released today, condo sales plunged 20.5 per cent in the third quarter of the year, to 4,541, from a year earlier.
New listings climbed more than 6.5 per cent, to 11,456, while average prices were flat at $334,204.
"With more listings to choose from and fewer sales, condo buyers have not been as aggressive with regard to offers, and sellers have had to price their units competitively," Jason Mercer, the group's senior manager of market analysis, said in the report.
"The result was little upward pressure on the average selling price compared to last year. Given the supply of listings currently in the market place, the average rate of price growth for condo apartments should continue to lag price growth for low-rise home types over the next year."
The real estate board also reported over all home sales in the first half of the month, highlighting again how Toronto's housing market is softening.
Sales in those 14 days fell by 10.5 per cent from a year earlier, to 2,961, while new listings rose 5.5 per cent, to 6,505.
Average prices, though, climbed by almost 6 per cent to $501,146.
"Some households have put their home purchase plans on hold in response to the higher cost of home ownership brought about by the recent changes to mortgage lending guidelines," said the group's president, Ann Hannah, referring to the latest restrictions unveiled by the government, which took effect in July.
"Both first-time buyers and existing home owners have been affected, given that sales were down across house types and geography," said Toronto Real Estate Board (TREB) President Ann Hannah.
The Toronto report comes just a day after the Canadian Real Estate Association's over all look at the market in September. That, The Globe and Mail's Tara Perkins reports, showed home sales in Canada plunging by 15.1 per cent last month from a year earlier, though on a seasonally-adjusted basis gaining 2.5 per cent from August.
Amid the angst over the country's slumping housing market, economist Robert Kavic of BMO Nesbitt Burns takes an interesting look today at who's winning and who's losing
Not surprisingly, Vancouver and Toronto lead the pack of losers, in terms of sales, while Calgary is the runaway winner.
Mr. Kavcic tracked 23 markets, using three-month averages compared to a year earlier, rather than just comparing September 2012 to September 2011.
Of those 23, he found, 13 are experienced "balanced conditions," though that may well change going forward.
"With sales generally falling relative to new listings, the number of buyers' markets could be on the rise in the months ahead," he said.
"Vancouver continues to show the weakest metrics," Mr. Kavcic added. "Winnipeg, however, remains tight despite a recent drop in sales, while Calgary is on the verge of a return to sellers' market territory."
Using the three-month average, Mr. Kavcic found Vancouver sales down 27 per cent, and prices down 7.7 per cent, in a buyers' market. Toronto sales were down 14 per cent and prices were up 6.1 per cent, in a balanced market.
In Calgary, prices climbed 19.1 per cent and prices 1.2 per cent in a balanced market, while Winnipeg saw a sales decline of 7 per cent and a price gain of 4.8 per cent in a sellers' market.
For a look at other cities and Mr. Kavcic's findings in general, see the accompanying graphic or click here [http://www.theglobeandmail.com/report-on-business/top-business-stories/bmos-housing-market-scorecard/article4615031].
•Year-over-year home sales plunged 15.1 per cent in September [http://www.theglobeandmail.com/report-on-business/economy/housing/year-over-year-home-sales-plunge-151-per-cent-in-september/article4612858]
Home Sales Fall 15% In a Year
Excerpted from The Toronto Star
Home sales fall 15% in a year
October 15, 2012
Susan Pigg
The number of homes sold in Canada has dropped more than 15 per cent in the last year.
AARON HARRIS/TORONTO STAR
Veteran Mississauga realtor Mike Donia has been through two housing downturns and he’s been seeing the same telltale signs across the GTA since May.
Inquiries to his office from buyers are down at least 65 per cent, bidding wars are going bust and he’s seeing a growing number of power of sale properties — including a $13.9 million Bridle Path mansion — popping up on the MLS.
At the same time, he’s got over a dozen clients trying to get out of pre-construction condo deals penned more than a year ago because they now find themselves overextended and fearful the condo boom is about to go bust.
“My geiger counter has been going off for four or five months now,” says the 25-year veteran of the GTA real estate business. “I can’t tell you when the epicentre of the earthquake is going to hit, but the picture on my wall is shaking.”
Despite a slight recovery over August, home sales fell 15.1 per cent across the country in September compared to a year earlier, according to figures from the Canadian Real Estate Association released Monday.
Sales were down considerably more — 23.2 and 33.2 per cent respectively — in Toronto and Vancouver. While prices were up 8.2 per cent in Toronto year-over-year, compared to a 3.8 per cent decline in Vancouver, condo prices are already starting to soften here and many housing watchers expect house prices could follow in the new year.
“We’re seeing more standoffs between buyers and sellers and properties are taking a little longer to sell,” says Coldwell Banker realtor Farrell Macdonald.
Just recently, Donia was incredulous as a homeowner sent back four offers, expecting to see the bidding war for his $800,000 Mississauga home escalate. All four prospective buyers walked away.
“Buyers today are like sharks — they may not see the food but they smell the blood in the water. They are looking for those fish that are floundering,” says Donia.
CREA has cited tough new mortgage rules imposed by Ottawa for much of the slowdown in sales, saying that the fourth round tighter regulations which took effect July 9, reducing maximum amortizations from 30 to 25 years, knocked a lot of first-time buyers out of the market.
But Donia, as well as housing analyst Ben Rabidoux, say the slowdown started back in the spring, especially in the overheated Vancouver market where investor speculation and low interest rates had helped push house prices out of reach.
Even Montreal is now being hit by flagging sales and a 12-month inventory of properties for sale, twice the six months’ worth across the GTA, says Rabidoux.
“We’re seeing from Vancouver and Montreal that that price pressure can hit — that supply and demand imbalance can hit — almost overnight. I’m not seeing that as being imminent in Toronto right now,” Rabidoux added.
But prices will inevitably take a hit — especially in the condo sector where tens of thousands more units are now under construction and prices are already starting to soften — if sales continue to slow into the spring market, said Rabidoux.
While the 2.5 per cent increase in sales in September over August was the first month-to-month gain since March, sales were down sharply over a year earlier, largely due to the slowdown in Vancouver.
“National activity is likely to remain down from year-ago levels over the fourth quarter of 2012,” said Gregory Klump, CREA’s chief economist.
“While some first time home buyers may no longer qualify for mortgage financing under the new rules, it is likely that many others are stepping back and reassessing how much house they can realistically afford, which is one of the things new mortgage rules were designed to do.”
TD Bank economist Francis Fong predicted a “gradual unwinding of the imbalance in both sales and prices over the next few years,” rather than a “preciptious decline in housing activity in the near term.”
Home sales fall 15% in a year
October 15, 2012
Susan Pigg
The number of homes sold in Canada has dropped more than 15 per cent in the last year.
AARON HARRIS/TORONTO STAR
Veteran Mississauga realtor Mike Donia has been through two housing downturns and he’s been seeing the same telltale signs across the GTA since May.
Inquiries to his office from buyers are down at least 65 per cent, bidding wars are going bust and he’s seeing a growing number of power of sale properties — including a $13.9 million Bridle Path mansion — popping up on the MLS.
At the same time, he’s got over a dozen clients trying to get out of pre-construction condo deals penned more than a year ago because they now find themselves overextended and fearful the condo boom is about to go bust.
“My geiger counter has been going off for four or five months now,” says the 25-year veteran of the GTA real estate business. “I can’t tell you when the epicentre of the earthquake is going to hit, but the picture on my wall is shaking.”
Despite a slight recovery over August, home sales fell 15.1 per cent across the country in September compared to a year earlier, according to figures from the Canadian Real Estate Association released Monday.
Sales were down considerably more — 23.2 and 33.2 per cent respectively — in Toronto and Vancouver. While prices were up 8.2 per cent in Toronto year-over-year, compared to a 3.8 per cent decline in Vancouver, condo prices are already starting to soften here and many housing watchers expect house prices could follow in the new year.
“We’re seeing more standoffs between buyers and sellers and properties are taking a little longer to sell,” says Coldwell Banker realtor Farrell Macdonald.
Just recently, Donia was incredulous as a homeowner sent back four offers, expecting to see the bidding war for his $800,000 Mississauga home escalate. All four prospective buyers walked away.
“Buyers today are like sharks — they may not see the food but they smell the blood in the water. They are looking for those fish that are floundering,” says Donia.
CREA has cited tough new mortgage rules imposed by Ottawa for much of the slowdown in sales, saying that the fourth round tighter regulations which took effect July 9, reducing maximum amortizations from 30 to 25 years, knocked a lot of first-time buyers out of the market.
But Donia, as well as housing analyst Ben Rabidoux, say the slowdown started back in the spring, especially in the overheated Vancouver market where investor speculation and low interest rates had helped push house prices out of reach.
Even Montreal is now being hit by flagging sales and a 12-month inventory of properties for sale, twice the six months’ worth across the GTA, says Rabidoux.
“We’re seeing from Vancouver and Montreal that that price pressure can hit — that supply and demand imbalance can hit — almost overnight. I’m not seeing that as being imminent in Toronto right now,” Rabidoux added.
But prices will inevitably take a hit — especially in the condo sector where tens of thousands more units are now under construction and prices are already starting to soften — if sales continue to slow into the spring market, said Rabidoux.
While the 2.5 per cent increase in sales in September over August was the first month-to-month gain since March, sales were down sharply over a year earlier, largely due to the slowdown in Vancouver.
“National activity is likely to remain down from year-ago levels over the fourth quarter of 2012,” said Gregory Klump, CREA’s chief economist.
“While some first time home buyers may no longer qualify for mortgage financing under the new rules, it is likely that many others are stepping back and reassessing how much house they can realistically afford, which is one of the things new mortgage rules were designed to do.”
TD Bank economist Francis Fong predicted a “gradual unwinding of the imbalance in both sales and prices over the next few years,” rather than a “preciptious decline in housing activity in the near term.”
Friday, October 12, 2012
York Region Property Values Up 27.2% Since 2008
Excerpted from The Toronto Star
York Region property values up 27.2% since 2008
Published on Thursday October 11, 2012
Tim Alamenciak
Staff Reporter
New construction and desirable affordable homes have sent average property values up as much as 31 per cent in some cities across York Region and 17 per cent in Durham, according to the latest property value assessment.
Assessment notices started arriving last week in the mailboxes of residents of York and Durham, with the remainder in the GTA to follow at the end of October. The Municipal Property Assessment Corporation (MPAC) conducts assessments every four years in Ontario to help determine the level of property tax each homeowner should pay.
“It makes sense, just based on the market conditions we’ve seen over the past few years, certainly as we’ve come out of the recession and definitely through the end of 2011,” said Jason Mercer, senior manager of market analysis with the Toronto Real Estate Board.
The assessment provides a snapshot of the presumed value of your property as of Jan. 1, 2012.
Generally speaking, if your new assessment is in line with the average increase in your municipality or region, your taxes will stay the same (subject, of course, to political decisions to raise the general tax rate). If your home’s value has risen more than the average, your taxes will increase. Similarly, if it has risen less than the average, your taxes will decrease.
The average increase in York Region is 27.2 per cent; in Durham Region, 13.8 per cent. Both numbers represent the increase in value since the last assessment, in 2008.
The increases will be applied incrementally over the next four years, meaning those facing a boost in property taxes won’t see a huge jump all at once in 2013.
Within York Region, homeowners in Markham, Richmond Hill and Vaughan saw the most significant boost in their property values. That means residents in those areas will bear a greater burden of the regional tax.
“The rate of change is greater in the Markham-Vaughan area than it is in places like Georgina, further out. That’s reasonable from the perspective that the demand is coming or emanating from Toronto itself,” said Larry Hummel, chief assessor at MPAC.
The highest rise in property values within Durham Region was in Pickering, where assessments rose by an average of 17.2 per cent.
“If you look at single-detached home prices in Durham versus a lot of other parts of the Greater Toronto Area, you’d be able to get a good-sized house on a good-sized lot for a relatively cheaper price than some other parts of the GTA,” Mercer said.
“Durham Region didn’t go up as strongly as York, but still did relatively well. The increase across Ontario was 18 per cent on average,” Hummel said.
Assessments will be mailed out to Halton and Peel Region homeowners starting Oct. 22. Toronto property assessments will hit the mail Oct. 29.
How is your home assessed?
MPAC looks at numerous factors when making its assessment, including local home sales, property size, outdoor improvements, fireplaces and the age of the house.
The assessment informs property tax calculations, though how much you actually end up paying next year will also depend on whether elected officials decide on a blanket increase for everybody.
Enid Slack, director of the Institute on Municipal Finance and Governance at the University of Toronto explains that the municipality will adjust the base tax rate so that homeowners whose property value has risen by exactly the average amount — 27.4 per cent in York Region, for example — won’t see any change in their tax bill.
Those whose assessment has risen less or more than the average, however, will see a change in their property tax proportional to the difference in value.
“The property tax is a way to pay for local government services in as fair a way as possible,” Slack explained. “What the assessment base provides is a way to distribute those taxes among taxpayers.”
York Region property values up 27.2% since 2008
Published on Thursday October 11, 2012
Tim Alamenciak
Staff Reporter
New construction and desirable affordable homes have sent average property values up as much as 31 per cent in some cities across York Region and 17 per cent in Durham, according to the latest property value assessment.
Assessment notices started arriving last week in the mailboxes of residents of York and Durham, with the remainder in the GTA to follow at the end of October. The Municipal Property Assessment Corporation (MPAC) conducts assessments every four years in Ontario to help determine the level of property tax each homeowner should pay.
“It makes sense, just based on the market conditions we’ve seen over the past few years, certainly as we’ve come out of the recession and definitely through the end of 2011,” said Jason Mercer, senior manager of market analysis with the Toronto Real Estate Board.
The assessment provides a snapshot of the presumed value of your property as of Jan. 1, 2012.
Generally speaking, if your new assessment is in line with the average increase in your municipality or region, your taxes will stay the same (subject, of course, to political decisions to raise the general tax rate). If your home’s value has risen more than the average, your taxes will increase. Similarly, if it has risen less than the average, your taxes will decrease.
The average increase in York Region is 27.2 per cent; in Durham Region, 13.8 per cent. Both numbers represent the increase in value since the last assessment, in 2008.
The increases will be applied incrementally over the next four years, meaning those facing a boost in property taxes won’t see a huge jump all at once in 2013.
Within York Region, homeowners in Markham, Richmond Hill and Vaughan saw the most significant boost in their property values. That means residents in those areas will bear a greater burden of the regional tax.
“The rate of change is greater in the Markham-Vaughan area than it is in places like Georgina, further out. That’s reasonable from the perspective that the demand is coming or emanating from Toronto itself,” said Larry Hummel, chief assessor at MPAC.
The highest rise in property values within Durham Region was in Pickering, where assessments rose by an average of 17.2 per cent.
“If you look at single-detached home prices in Durham versus a lot of other parts of the Greater Toronto Area, you’d be able to get a good-sized house on a good-sized lot for a relatively cheaper price than some other parts of the GTA,” Mercer said.
“Durham Region didn’t go up as strongly as York, but still did relatively well. The increase across Ontario was 18 per cent on average,” Hummel said.
Assessments will be mailed out to Halton and Peel Region homeowners starting Oct. 22. Toronto property assessments will hit the mail Oct. 29.
How is your home assessed?
MPAC looks at numerous factors when making its assessment, including local home sales, property size, outdoor improvements, fireplaces and the age of the house.
The assessment informs property tax calculations, though how much you actually end up paying next year will also depend on whether elected officials decide on a blanket increase for everybody.
Enid Slack, director of the Institute on Municipal Finance and Governance at the University of Toronto explains that the municipality will adjust the base tax rate so that homeowners whose property value has risen by exactly the average amount — 27.4 per cent in York Region, for example — won’t see any change in their tax bill.
Those whose assessment has risen less or more than the average, however, will see a change in their property tax proportional to the difference in value.
“The property tax is a way to pay for local government services in as fair a way as possible,” Slack explained. “What the assessment base provides is a way to distribute those taxes among taxpayers.”
Thursday, October 4, 2012
Toronto Housing Heads for Buyers' Market
Excerpted from The Globe and Mail
October 4, 2012
Toronto housing heads for buyers' market, first time since slump: BMO
By Michael Babad
Oct. 4, 2012.
Follow Michael Babad and the Globe's top business stories on Twitter. [http://https://twitter.com/#!/michaelbabad]
Toronto heads for buyers' market
Here's the bottom line on Toronto's housing market from Robert Kavcic at BMO Nesbitt Burns: Toronto is on its way to becoming a buyers' market for the first time since the slump.
The BMO economist was referring today to the Toronto Real Estate Board's latest numbers, released yesterday and which showed residential real estate sales plunging 21 per cent in September from a year earlier, though you've got to factor in two more business days a year ago.
Still, the signs are clear, particularly in the condo market, which has been a major area of concern and where sales lost 27 per cent. Standard detached homes sank by 19 per cent.
Prices climbed, by 8.6 per cent on average, but that's bound to change.
"With new listings up 4 per cent year over year against a backdrop of falling sales, and with plenty of potential resale condo supply coming over the next year, Toronto is quickly heading for buyers' market territory for the first time (depending on your definition) since the recession," Mr. Kavcic said.
Canada's housing market has been slowing in general, though some cities, such as Calgary, are still seeing sales increases.
The markets in Toronto and Vancouver, in particular, have worried observers.
•Home prices rise in third quarter, but slowdown seen coming [http://www.theglobeandmail.com/report-on-business/economy/housing/home-prices-rise-in-third-quarter-but-slowdown-seen-coming/article4584606]
•Tighter mortgage rules start to take toll on high-end homes [http://www.theglobeandmail.com/report-on-business/economy/housing/tighter-mortgage-rules-start-to-take-toll-on-high-end-homes/article4583509]
•Rob Carrick: Why Gen Y should tough it out in the rental market [http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/why-gen-y-should-tough-it-out-in-the-rental-market/article4580877]
October 4, 2012
Toronto housing heads for buyers' market, first time since slump: BMO
By Michael Babad
Oct. 4, 2012.
Follow Michael Babad and the Globe's top business stories on Twitter. [http://https://twitter.com/#!/michaelbabad]
Toronto heads for buyers' market
Here's the bottom line on Toronto's housing market from Robert Kavcic at BMO Nesbitt Burns: Toronto is on its way to becoming a buyers' market for the first time since the slump.
The BMO economist was referring today to the Toronto Real Estate Board's latest numbers, released yesterday and which showed residential real estate sales plunging 21 per cent in September from a year earlier, though you've got to factor in two more business days a year ago.
Still, the signs are clear, particularly in the condo market, which has been a major area of concern and where sales lost 27 per cent. Standard detached homes sank by 19 per cent.
Prices climbed, by 8.6 per cent on average, but that's bound to change.
"With new listings up 4 per cent year over year against a backdrop of falling sales, and with plenty of potential resale condo supply coming over the next year, Toronto is quickly heading for buyers' market territory for the first time (depending on your definition) since the recession," Mr. Kavcic said.
Canada's housing market has been slowing in general, though some cities, such as Calgary, are still seeing sales increases.
The markets in Toronto and Vancouver, in particular, have worried observers.
•Home prices rise in third quarter, but slowdown seen coming [http://www.theglobeandmail.com/report-on-business/economy/housing/home-prices-rise-in-third-quarter-but-slowdown-seen-coming/article4584606]
•Tighter mortgage rules start to take toll on high-end homes [http://www.theglobeandmail.com/report-on-business/economy/housing/tighter-mortgage-rules-start-to-take-toll-on-high-end-homes/article4583509]
•Rob Carrick: Why Gen Y should tough it out in the rental market [http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/why-gen-y-should-tough-it-out-in-the-rental-market/article4580877]
Wednesday, October 3, 2012
Toronto Real Estate: Sales Down But Prices Up From Last Year
Excerpted from The Toronto Star
Toronto real estate: Sales down but prices up from last year
October 03, 2012
Susan Pigg
The average price of a GTA home was up more than 8.5 per cent in September over last year to $503,662, according to TREB.
VINCE TALOTTA/TORONTO STAR FILE PHOTO
The impact of Ottawa’s tighter lending rules really hit home in September with sales down 21 per cent year-over-year across the GTA, according to figures released Wednesday by the Toronto Real Estate Board.
Unlike Vancouver where house prices are starting to slip in the face of a 33 per cent downturn in sales in September, Toronto continues to record strong price gains despite the significant downturn in demand.
The average price of a GTA home was up more than 8.5 per cent in September over last year to $503,662, according to TREB.
Even the fast-growing condo sector, which has cooled considerably over the summer, saw price gains of 6 per cent over September of 2011. That’s despite the fourth round of tighter mortgage lending rules implemented by Ottawa in July which cut maximum amortizations from 30 to 25 years, boosting monthly carrying costs enough to shut many first-time buyers out of that entry-level market.
The biggest price gains were in the City of Toronto where the average condo sold for $377,422 in September, up 8 per cent from a year earlier. In the 905 regions, prices were up just 1 per cent to an average of $283,321.
Some 5,879 homes changed hands last month, down from 7,422 in September 2011.
Semi-detached homes saw the biggest price gains with the average price hitting $604,963 in the City of Toronto and $394,265 in the 905 regions, year-over-year increases of 16 per cent and 12 per cent respectively.
That may reflect the fact that detached homes — which now average $627,111 across the GTA, $781,826 in Toronto — are becoming priced out of reach.
The fall sales numbers are considered key to understanding whether the GTA housing market is heading for a crash or just a cool down as September and October are traditionally strong months for sales as buyers start flocking to open houses again after summer vacations.
TREB went to great pains to point out that this September had two fewer business days than last September, making the actual decline in sales about 12.5 per cent year over year.
“Barring a major change to the consensus economic outlook, home price growth is expected to continue through 2013. Based on inventory levels, price growth will be strongest for low-rise home types, including single-detached and semi-detached houses and town homes,” says Jason Mercer, TREB’s senior manager of market analysis.
Those gains are unlikely to continue in the condo sector, however, given slowing demand and the growing inventory of condos for sale, especially in the downtown core, with tens of thousands more in the planning or building stages across the GTA (most of them pre-sold) in the wake of last year’s record year for condo sales.
While sales of detached homes were down 19 per cent across the GTA — 27 per cent just in the City of Toronto — prices were up 8 per cent across the GTA and 10 per cent in the city.
That means bidding wars have eased but far from disappeared as condos outpace the construction of high-demand family homes, homeowners opt for renovations instead of costly moves, and the inventory of quality homes for sale remains below historic levels. That’s driving up demand — and prices — on anything that doesn’t reach for the skies.
“I’m not seeing first-time buyers pulling out, but I hear people asking a lot more questions,” says realtor John Pasalis of Realosophy who’s still seeing lots of bidding wars and bully bids for homes. “The second the market does moderate a bit, everybody thinks it’s crashing. We’re just moving a lot closer to a more balanced market.
“It’s still a seller’s market for houses, but condos have slowed down a lot.” Condo realtor Mark Savel said he’s seeing “insane” demand for condo rentals downtown fuelled, he believes, by the fact more people who might have been able to buy a year ago are now opting to rent longer.
That’s lead to bidding wars even on rental units he said, citing one client who lost out on three different units, even though he offered $250 per month more than asking on one.
He’s also finding that potential condo buyers who decided to put purchases on hold in the spring and see where the market was going are jumping back in, hoping to find deals as the inventory of condos for sale continues to climb.
“There’s definitely more of a sense of balance in the market. You don’t have to be the first one in to see a place. Chances are it will still be there a week from now.”
Toronto real estate: Sales down but prices up from last year
October 03, 2012
Susan Pigg
The average price of a GTA home was up more than 8.5 per cent in September over last year to $503,662, according to TREB.
VINCE TALOTTA/TORONTO STAR FILE PHOTO
The impact of Ottawa’s tighter lending rules really hit home in September with sales down 21 per cent year-over-year across the GTA, according to figures released Wednesday by the Toronto Real Estate Board.
Unlike Vancouver where house prices are starting to slip in the face of a 33 per cent downturn in sales in September, Toronto continues to record strong price gains despite the significant downturn in demand.
The average price of a GTA home was up more than 8.5 per cent in September over last year to $503,662, according to TREB.
Even the fast-growing condo sector, which has cooled considerably over the summer, saw price gains of 6 per cent over September of 2011. That’s despite the fourth round of tighter mortgage lending rules implemented by Ottawa in July which cut maximum amortizations from 30 to 25 years, boosting monthly carrying costs enough to shut many first-time buyers out of that entry-level market.
The biggest price gains were in the City of Toronto where the average condo sold for $377,422 in September, up 8 per cent from a year earlier. In the 905 regions, prices were up just 1 per cent to an average of $283,321.
Some 5,879 homes changed hands last month, down from 7,422 in September 2011.
Semi-detached homes saw the biggest price gains with the average price hitting $604,963 in the City of Toronto and $394,265 in the 905 regions, year-over-year increases of 16 per cent and 12 per cent respectively.
That may reflect the fact that detached homes — which now average $627,111 across the GTA, $781,826 in Toronto — are becoming priced out of reach.
The fall sales numbers are considered key to understanding whether the GTA housing market is heading for a crash or just a cool down as September and October are traditionally strong months for sales as buyers start flocking to open houses again after summer vacations.
TREB went to great pains to point out that this September had two fewer business days than last September, making the actual decline in sales about 12.5 per cent year over year.
“Barring a major change to the consensus economic outlook, home price growth is expected to continue through 2013. Based on inventory levels, price growth will be strongest for low-rise home types, including single-detached and semi-detached houses and town homes,” says Jason Mercer, TREB’s senior manager of market analysis.
Those gains are unlikely to continue in the condo sector, however, given slowing demand and the growing inventory of condos for sale, especially in the downtown core, with tens of thousands more in the planning or building stages across the GTA (most of them pre-sold) in the wake of last year’s record year for condo sales.
While sales of detached homes were down 19 per cent across the GTA — 27 per cent just in the City of Toronto — prices were up 8 per cent across the GTA and 10 per cent in the city.
That means bidding wars have eased but far from disappeared as condos outpace the construction of high-demand family homes, homeowners opt for renovations instead of costly moves, and the inventory of quality homes for sale remains below historic levels. That’s driving up demand — and prices — on anything that doesn’t reach for the skies.
“I’m not seeing first-time buyers pulling out, but I hear people asking a lot more questions,” says realtor John Pasalis of Realosophy who’s still seeing lots of bidding wars and bully bids for homes. “The second the market does moderate a bit, everybody thinks it’s crashing. We’re just moving a lot closer to a more balanced market.
“It’s still a seller’s market for houses, but condos have slowed down a lot.” Condo realtor Mark Savel said he’s seeing “insane” demand for condo rentals downtown fuelled, he believes, by the fact more people who might have been able to buy a year ago are now opting to rent longer.
That’s lead to bidding wars even on rental units he said, citing one client who lost out on three different units, even though he offered $250 per month more than asking on one.
He’s also finding that potential condo buyers who decided to put purchases on hold in the spring and see where the market was going are jumping back in, hoping to find deals as the inventory of condos for sale continues to climb.
“There’s definitely more of a sense of balance in the market. You don’t have to be the first one in to see a place. Chances are it will still be there a week from now.”
Home Prices Rise in Third Quarter, But Slowdown Seen Coming
Excerpted from The Globe and Mail
October 3, 2012
Home prices rise in third quarter, but slowdown seen coming
By TARA PERKINS
Price of average two-storey home in Canada rose 4%, condo prices advanced 1.8%; separate report says existing home sales in Toronto fell 21% in September
The average price of a two-storey home in Canada was 4 per cent higher than a year ago in the third-quarter, at $403,747, while condos saw prices rise 1.8 per cent to $243,607, according to Royal LePage's house price survey.
But sales are slowing and prices are likely to follow suit, Royal LePage CEO Phil Soper suggested, while adding that because of low interest rates the downward pressure on prices should be "minimal."
"A drop in the number of homes trading hands typically precedes a period of softening house prices," he said in a press release. "During the third quarter, unit home sales were positive in July, fell 9 per cent year-over-year in August and we are expecting September to show a decline as well."
He added that the changes that Finance Minister Jim Flaherty made to the mortgage insurance rules effective July 9, including cutting the maximum length of insured mortgages to 25 years from 30 years, have accelerated the correction.
First-time buyers have been impacted the most. "They may remain renters for some time as they save; some will opt for less desirable neighbourhoods and some will purchase smaller homes," Mr. Soper said. "In the meanwhile, we will feel their absence in national sales statistics."
Behind the national averages there were wide disparities in how different regions of the country are faring. Vancouver saw price declines in the third quarter (1.5 per cent for two-storey homes and 3 per cent for condos), while St. John's saw large increases (8.2 per cent and 9.2 per cent).
Royal LePage is hoping that September's increase in consumer confidence will lend a hand to sales this fall.
Meanwhile, sales of existing homes in the Greater Toronto Area were down 21 per cent from a year ago in September, while prices were up 8.5 per cent, the Toronto Real Estate Board [http://www.torontorealestateboard.com/index.htm] said in a separate report.
Stricter mortgage insurance rules have dented sales, but the board also emphasized that there were fewer working days this September than last September and suggested that adjusting for that factor the decline in sales would have been smaller.
Sales of detached homes in the downtown Toronto area covered by the 416 area code fell 27 per cent from a year earlier, while prices were up 10 per cent. Sales of condos in the same area were down 29 per cent, while prices were up 8 per cent.
The board's data is based on transactions over the MLS system, and therefore captures mostly resales of existing properties as opposed to sales of newly-built condos or houses.
Across all housing types, the average selling price was $503,662, up more than 8.5 per cent.
Toronto Real Estate Board manager of market analysis Jason Mercer is expecting prices to continue to rise through 2013, driven by low-rise homes, unless there is a major change to the economic outlook.
The average resale price of a detached home in downtown Toronto is now up to $781,826, while the average resale condo cost $377,422 in September.
October 3, 2012
Home prices rise in third quarter, but slowdown seen coming
By TARA PERKINS
Price of average two-storey home in Canada rose 4%, condo prices advanced 1.8%; separate report says existing home sales in Toronto fell 21% in September
The average price of a two-storey home in Canada was 4 per cent higher than a year ago in the third-quarter, at $403,747, while condos saw prices rise 1.8 per cent to $243,607, according to Royal LePage's house price survey.
But sales are slowing and prices are likely to follow suit, Royal LePage CEO Phil Soper suggested, while adding that because of low interest rates the downward pressure on prices should be "minimal."
"A drop in the number of homes trading hands typically precedes a period of softening house prices," he said in a press release. "During the third quarter, unit home sales were positive in July, fell 9 per cent year-over-year in August and we are expecting September to show a decline as well."
He added that the changes that Finance Minister Jim Flaherty made to the mortgage insurance rules effective July 9, including cutting the maximum length of insured mortgages to 25 years from 30 years, have accelerated the correction.
First-time buyers have been impacted the most. "They may remain renters for some time as they save; some will opt for less desirable neighbourhoods and some will purchase smaller homes," Mr. Soper said. "In the meanwhile, we will feel their absence in national sales statistics."
Behind the national averages there were wide disparities in how different regions of the country are faring. Vancouver saw price declines in the third quarter (1.5 per cent for two-storey homes and 3 per cent for condos), while St. John's saw large increases (8.2 per cent and 9.2 per cent).
Royal LePage is hoping that September's increase in consumer confidence will lend a hand to sales this fall.
Meanwhile, sales of existing homes in the Greater Toronto Area were down 21 per cent from a year ago in September, while prices were up 8.5 per cent, the Toronto Real Estate Board [http://www.torontorealestateboard.com/index.htm] said in a separate report.
Stricter mortgage insurance rules have dented sales, but the board also emphasized that there were fewer working days this September than last September and suggested that adjusting for that factor the decline in sales would have been smaller.
Sales of detached homes in the downtown Toronto area covered by the 416 area code fell 27 per cent from a year earlier, while prices were up 10 per cent. Sales of condos in the same area were down 29 per cent, while prices were up 8 per cent.
The board's data is based on transactions over the MLS system, and therefore captures mostly resales of existing properties as opposed to sales of newly-built condos or houses.
Across all housing types, the average selling price was $503,662, up more than 8.5 per cent.
Toronto Real Estate Board manager of market analysis Jason Mercer is expecting prices to continue to rise through 2013, driven by low-rise homes, unless there is a major change to the economic outlook.
The average resale price of a detached home in downtown Toronto is now up to $781,826, while the average resale condo cost $377,422 in September.
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